This paper re-examines the issues involved in the design of a direct tax on consumption, an idea that has received a fair degree of acceptance in the transition countries over the past decade (e.g., tax reforms in Croatia and Moldova). First we argue that on the subject of equivalence among a...

This paper focuses on the design of a consumption tax in a world of capital risk. The certainty literature discusses two standard options, namely the cash flow method and the pre-payment method (i.e., the wage tax), and finds the two approaches to be equivalent. Models that consider capital risk...

The importance of capital loss offset provisions in a world of risk is well documented in the tax literature. However, the potential deadweight losses (DWLs) owing to imperfect offset has not been fully explored. This paper develops a framework whereby that investigation can be carried out, and...