TY  - JOUR
AU  - Auerbach,Alan A.
AU  - Bradford,David F.
TI  - Generalized Cash Flow Taxation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8122
PY  - 2001
Y2  - February 2001
UR  - http://www.nber.org/papers/w8122
L1  - http://www.nber.org/papers/w8122.pdf
N1  - Author contact info:
Alan J. Auerbach
Department of Economics
508-1 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0711
Fax: 510/643-0413
E-Mail: auerbach@econ.berkeley.edu

David F. Bradford
Woodrow Wilson School
Princeton University
Princeton, NJ 08544-1013
Tel: 609/258-1856
Fax: 609/258-2809
E-Mail: BRADFORD@PRINCETON.EDU
AB  - We show the unique form that must be taken by a tax system based entirely on realization accounting to implement a uniform capital income tax, or, equivalently, a uniform wealth tax.  This system combines elements of an accrual based capital income tax and a traditional cash flow tax, having many of the attributes of the latter while still imposing a tax burden on marginal capital income. Like the traditional cash flow tax, this system may be integrated with a tax on labor income.  We also show how such a tax can be supplemented with an optional accounting for a segregated subset of actively traded securities, subjected separately to mark-to-market taxation at the uniform capital income tax rate, to permit a fully graduated tax system applicable to labor income.
ER  -