@techreport{NBERw5290,
 title = "Consumption Taxes: Some Fundamental Transition Issues",
 author = "David F. Bradford",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "5290",
 year = "1996",
 month = "December",
 URL = "http://www.nber.org/papers/w5290",
 abstract = {A number of tax reform plans under discussion in the United States would replace the existing hybrid income-based system with a consumption-based system.  In this paper I use uniform (single-rate) consumption and income taxes: (a) to explain how the problem of taxing 'old savings' or 'old capital' manifests itself in the shift from an income to a consumption base; (b) to indicate the tradeoffs that must be confronted in dealing with this phenomenon; (c) to show how price level changes that may or may not accompany a transition affect the distribution of gains and losses; (d) to sketch out how a transition might affect interest rates and asset prices (including owner-occupied housing); (e) to explore the case in equity for protecting the tax- free recovery of old savings; and (f) to emphasize the incentive problems that arise if savers and investors anticipate a change in the tax rate in a consumption-based system.},
}