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A Lifetime Income Tax

dc.contributor.authorSchlunk, Herwig J.
dc.date.accessioned2014-04-16T20:55:22Z
dc.date.available2014-04-16T20:55:22Z
dc.date.issued2006
dc.identifier.citation25 Va. Tax Rev. 939 (2006)en_US
dc.identifier.urihttp://hdl.handle.net/1803/6300
dc.description.abstractUnder current tax law, there can be considerable period-by-period divergence between a taxpayer's after-tax income and her desired or actual consumption. This divergence will cause the taxpayer to borrow. One can view such borrowing either as being incurred to fund consumption, or as being incurred to fund the taxpayer's income tax payments. If one takes the latter view, one can ask whether a good income tax law should force a taxpayer to borrow to pay her taxes. I answer the question in the negative, and propose a lifetime income tax that would eliminate the need for typical taxpayers to borrow to pay their income tax liabilities. Under such a regime, a typical taxpayer would reap an affirmative benefit over her lifetime, because she would be able to transfer borrowing from herself (a relatively inefficient borrower) to the government (a relatively efficient borrower). My paper breaks new ground. Other scholars have, over the years, proposed a lifetime income tax structure, but they have done so exclusively to eliminate the "unfair" burden that annual income measurement imposes on taxpayers with volatile incomes. My paper differs in that it demonstrates that there can be great gains from a lifetime income tax - indeed, the proverbial free lunch - even for taxpayers without volatile incomes.en_US
dc.format.extent1 PDF (39 pages)en_US
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen_US
dc.publisherVirginia Tax Reviewen_US
dc.subject.lcshIncome tax -- Law and legislation -- United Statesen_US
dc.titleA Lifetime Income Taxen_US
dc.typeArticleen_US
dc.identifier.ssrn-urihttp://ssrn.com/abstract=668942


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