TY  - JOUR
AU  - Gordon,Roger H.
AU  - Kalambokidis,Laura
AU  - Slemrod,Joel
TI  - Do We Now Collect Any Revenue From Taxing Capital Income?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9477
PY  - 2003
Y2  - February 2003
UR  - http://www.nber.org/papers/w9477
L1  - http://www.nber.org/papers/w9477.pdf
N1  - Author contact info:
Roger H. Gordon
Department of Economics 0508
University of California, San Diego
9500 Gilman Drive, Dept. 0508
La Jolla, CA 92093
Tel: 858/534-4828
Fax: 858/534-7040
E-Mail: rogordon@ucsd.edu

Joel B. Slemrod
University of Michigan Business School
Wyly Hall, Room 7719
Ann Arbor, MI  48109-1234
Tel: 734/936-3914
Fax: 734-615-4323
E-Mail: jslemrod@umich.edu
M1  - published as Gordon, Roger, Laura Kalambokidis and Joel Slemrod. "Do We Now Collect Any Revenue From Taxing Capital Income?," Journal of Public Economics, 2004, v88(5,Apr), 981-1009.
AB  - The U.S. income tax has long been recognized as a hybrid of an income and consumption tax, with elements that do not fit naturally into either pure system.  The precise nature of this hybrid has important policy implications for, among other things, understanding the impact of moving closer to a pure consumption tax regime. In this paper, we examine the nature of the U.S. income tax by calculating the revenue and distributional implications of switching from the current system to one form of consumption tax, a modified cash flow tax.  Although earlier work had suggested that in 1983 such a switch would have cost little or no revenue at all, we calculate that in 1995 this switch would have cost $108.1 billion in tax revenues, suggesting that the U.S. income tax does impose some positive tax on capital income.  The net gains from such a switch have a U-shaped pattern, with those in the lowest and highest deciles of labor income receiving the largest proportional gains, although those in the highest decile would have by far the largest absolute gains.
ER  -