Which tax structure — sales or income — is most preferred by the typical Missourian? Because both types of taxes are distortionary, it is difficult to tell whether welfare is higher under the system relying more heavily on the income tax or under the system relying more heavily on the sales tax. This essay uses quantitative methods built on logically consistent economic theory to compare welfare under the two alternative tax structures.
Income Taxes vs. Sales Taxes: A Welfare Comparison
Economy |
About the Author
Grant Casteel
Contributing writer at the Show-Me Institute.
About the Author
Joseph Haslag
Joseph Haslag is the Donald R. Street Endowed Professor and Department Head of Economics at Auburn University. Until the end of 2018, Professor Haslag was the Institute's chief economist. An expert in monetary policy, Haslag has done research at the Federal Reserve Banks of Saint Louis, Dallas, and...
