Raising Revenue with TransactionTaxes in Latin America - Or Is It Better to Tax with theDevil You Know?

Suescú ; n, Rodrigo

World Bank, Washington, D.C.

关键词: ACCOUNTING;    ALTERNATIVE TAX REFORMS;    AVERAGE TAX RATES;    BENCHMARK;    BUDGET CONSTRAINTS;   

DOI  :  10.1596/1813-9450-3279
RP-ID  :  WPS3279

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

In recent years, various Latin Americangovernments have resorted to taxes on bank debits andfinancial transactions as alternative ways of raisingrevenue. Considerable interest has developed inunderstanding the consequences of such reforms. The authorconstructs a dynamic general equilibrium model to assess thesize of distortions and other quantitative implicationsassociated with a transaction tax. The distinctive featureof the model is the non-neutrality property of the tax inthe sense that it distorts the structure of relative pricesof intermediate transactions, giving rise to tax"pyramidation." The effective tax rate ultimatelyborne by the economy is shown to depend on the complexity ofthe transaction structure. Calibrated for Latin America, themodel finds that, contrary to existing evidence andconventional wisdom, a transaction tax is not a particularlyburdensome levy in terms of economic growth and efficiencycosts. The model also shows that if a government cancredibly commit itself to an announced two-step reform inwhich it first uses a transaction tax temporarily and thenreplaces it with any other conventional tax, this policywill improve economic welfare relative to a tax reform wherea consumption tax (or a labor income tax or a capitalearnings tax) is exclusively used from the start to raisethe required additional revenue.