Working Paper: NBER ID: w17214
Authors: Louis Kaplow
Abstract: A notable feature and principal virtue of Tax by Design is its system-wide perspective on different elements of the tax system. This review essay builds on this trait and offers a more explicit foundation for the report's general approach, drawing on a distribution-neutral methodology that is developed in other work. This technique is then employed to illuminate and extend Tax by Design's analysis regarding the VAT, environmental taxation, wealth transfer taxation, and income transfers.
Keywords: No keywords provided
JEL Codes: H20; H21; H23; H24; H53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| distribution-neutral approach to tax reform (H29) | Pareto improvements (D61) |
| adjustment of income tax and transfer system (H29) | overall utility maintenance (L97) |
| eliminating tax exemptions (e.g., for food under VAT) (H25) | efficiency gains (D61) |
| adjustment of income tax (H26) | offset adverse utility effects (D11) |
| environmental taxes under distribution-neutral framework (H23) | correct externalities (D62) |
| optimal commodity taxation (H21) | achieve efficiency (D61) |
| distribution-neutral reform (D39) | eliminate distortions in donor behavior (H31) |