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Taxing Consumption - An Analysis of the Distribution of the VAT Burden in Switzerland

Kaderli, Tabea Anita LU (2015) NEKN01 20151
Department of Economics
Abstract
This paper investigates the distribution of the tax burden of the value added tax, VAT, in Switzerland. The current Swiss VAT system overall is slightly progressive, putting a higher tax burden on the high-income households. The analysis of different household types yields similar results. The results depend crucially on the measurement base adopted. It is however argued that the tax ratio as a proportion of expenditure pictures the tax burden of households from a lifetime perspective most realistically. A simulation is performed in order to evaluate the impact of a uniform consumption tax rate. While the VAT system would still be somewhat progressive, the reform is regressive, imposing a greater change in tax burden on low-income... (More)
This paper investigates the distribution of the tax burden of the value added tax, VAT, in Switzerland. The current Swiss VAT system overall is slightly progressive, putting a higher tax burden on the high-income households. The analysis of different household types yields similar results. The results depend crucially on the measurement base adopted. It is however argued that the tax ratio as a proportion of expenditure pictures the tax burden of households from a lifetime perspective most realistically. A simulation is performed in order to evaluate the impact of a uniform consumption tax rate. While the VAT system would still be somewhat progressive, the reform is regressive, imposing a greater change in tax burden on low-income households. (Less)
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author
Kaderli, Tabea Anita LU
supervisor
organization
course
NEKN01 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
consumption tax, VAT burden, income distribution, uniform VAT, Switzerland
language
English
id
5462592
date added to LUP
2015-06-30 10:55:09
date last changed
2015-06-30 10:55:09
@misc{5462592,
  abstract     = {This paper investigates the distribution of the tax burden of the value added tax, VAT, in Switzerland. The current Swiss VAT system overall is slightly progressive, putting a higher tax burden on the high-income households. The analysis of different household types yields similar results. The results depend crucially on the measurement base adopted. It is however argued that the tax ratio as a proportion of expenditure pictures the tax burden of households from a lifetime perspective most realistically. A simulation is performed in order to evaluate the impact of a uniform consumption tax rate. While the VAT system would still be somewhat progressive, the reform is regressive, imposing a greater change in tax burden on low-income households.},
  author       = {Kaderli, Tabea Anita},
  keyword      = {consumption tax,VAT burden,income distribution,uniform VAT,Switzerland},
  language     = {eng},
  note         = {Student Paper},
  title        = {Taxing Consumption - An Analysis of the Distribution of the VAT Burden in Switzerland},
  year         = {2015},
}