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The Distributional Effects of Consumption Taxes in New Zealand

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dc.contributor.author Thomas, Alastair
dc.date.accessioned 2015-08-05T20:33:54Z
dc.date.accessioned 2022-07-07T02:30:52Z
dc.date.available 2015-08-05T20:33:54Z
dc.date.available 2022-07-07T02:30:52Z
dc.date.copyright 2015
dc.date.issued 2015
dc.identifier.uri https://ir.wgtn.ac.nz/handle/123456789/19331
dc.description.abstract This paper investigates the distributional effects of the GST in New Zealand, and the case for the introduction of reduced rates to address distributional concerns. The analysis is based on a consumption tax micro-simulation model constructed using expenditure micro-data from the Household Economic Survey for 2012/13. The distributional effects of excise taxes on tobacco, alcohol and petrol are also considered. The paper finds that the lifetime distributional impact of the GST is either proportional or at worst slightly regressive. Excise taxes are also found to be roughly proportional or slightly regressive, though they are of far smaller magnitude than GST burdens. Simulation results show that the introduction of a European-style multi-rate GST system would have a progressive impact on overall GST burdens, but that such a reform would benefit richer households significantly more than poorer households in dollar terms. Given it is the overall progressivity of the tax system that matters, New Zealand’s current approach of providing targeted support to poorer households via the Working for Families tax credit package can be seen as a far more cost effective way of supporting poorer households than the introduction of reduced GST rates for specific expenditure items. en_NZ
dc.format pdf en_NZ
dc.language.iso en_NZ
dc.publisher Te Herenga Waka—Victoria University of Wellington en_NZ
dc.relation.ispartofseries Working Papers in Public Finance ; 08/2015 en_NZ
dc.subject GST en_NZ
dc.subject VAT en_NZ
dc.subject Excise taxes en_NZ
dc.subject Consumption taxes en_NZ
dc.subject Distributional effects en_NZ
dc.title The Distributional Effects of Consumption Taxes in New Zealand en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit School of Accounting and Commercial Law en_NZ
vuwschema.subject.anzsrcfor 140215 Public Economics - Taxation and Revenue en_NZ
vuwschema.type.vuw Working or Occasional Paper en_NZ
vuwschema.subject.anzsrcforV2 380115 Public economics - taxation and revenue en_NZ
dc.rights.rightsholder www.victoria.ac.nz/sacl/about/cpf en_NZ

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