Publication:
Raising Revenue with Transaction Taxes in Latin America - Or Is It Better to Tax with the Devil You Know?

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dc.contributor.authorSuescún, Rodrigo
dc.date.accessioned2013-08-02T14:08:17Z
dc.date.available2013-08-02T14:08:17Z
dc.date.issued2004-04
dc.description.abstractIn recent years, various Latin American governments have resorted to taxes on bank debits and financial transactions as alternative ways of raising revenue. Considerable interest has developed in understanding the consequences of such reforms. The author constructs a dynamic general equilibrium model to assess the size of distortions and other quantitative implications associated with a transaction tax. The distinctive feature of the model is the non-neutrality property of the tax in the sense that it distorts the structure of relative prices of intermediate transactions, giving rise to tax "pyramidation." The effective tax rate ultimately borne by the economy is shown to depend on the complexity of the transaction structure. Calibrated for Latin America, the model finds that, contrary to existing evidence and conventional wisdom, a transaction tax is not a particularly burdensome levy in terms of economic growth and efficiency costs. The model also shows that if a government can credibly commit itself to an announced two-step reform in which it first uses a transaction tax temporarily and then replaces it with any other conventional tax, this policy will improve economic welfare relative to a tax reform where a consumption tax (or a labor income tax or a capital earnings tax) is exclusively used from the start to raise the required additional revenue.en
dc.identifierhttp://documents.worldbank.org/curated/en/2004/04/3401982/raising-revenue-transaction-taxes-latin-america-or-better-tax-devil-know
dc.identifier.doi10.1596/1813-9450-3279
dc.identifier.urihttps://hdl.handle.net/10986/14773
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, D.C.
dc.relation.ispartofseriesPolicy Research Working Paper;No.3279
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectALTERNATIVE TAX REFORMS
dc.subjectAVERAGE TAX RATES
dc.subjectBENCHMARK
dc.subjectBUDGET CONSTRAINTS
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITAL GAINS
dc.subjectCAPITAL INCOME
dc.subjectCAPITAL STOCK
dc.subjectCAPITAL-LABOR
dc.subjectCAPITAL-LABOR RATIO
dc.subjectCAPITAL-LABOR RATIOS
dc.subjectCENTRAL BANK
dc.subjectCONSUMPTION EXPENDITURES
dc.subjectCONSUMPTION TAXES
dc.subjectCONVENTIONAL WISDOM
dc.subjectDISTORTIONARY EFFECTS
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC RESOURCES
dc.subjectECONOMIC THEORY
dc.subjectECONOMIC WELFARE
dc.subjectEMPIRICAL STUDIES
dc.subjectEQUATIONS
dc.subjectEQUILIBRIUM
dc.subjectEXPENDITURES
dc.subjectEXTERNALITY
dc.subjectFACTOR PRICING
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL INTERMEDIARIES
dc.subjectFINANCIAL INTERMEDIATION
dc.subjectFINANCIAL TRANSACTIONS
dc.subjectFISCAL POLICIES
dc.subjectFISCAL POLICY
dc.subjectFOREIGN EXCHANGE
dc.subjectGDP
dc.subjectGENERAL EQUILIBRIUM MODEL
dc.subjectGENERAL EQUILIBRIUM SYSTEM
dc.subjectGOVERNMENT BONDS
dc.subjectGOVERNMENT FINANCE
dc.subjectGROSS OUTPUT
dc.subjectGROWTH MODEL
dc.subjectGROWTH MODELS
dc.subjectGROWTH PATH
dc.subjectGROWTH RATE
dc.subjectHUMAN CAPITAL
dc.subjectINCOME
dc.subjectINCOME TAXES
dc.subjectINEFFICIENCY
dc.subjectINPUT PRICES
dc.subjectINTERMEDIATE GOODS
dc.subjectINTERMEDIATE INPUT
dc.subjectINTERMEDIATE INPUTS
dc.subjectLABOR INPUT
dc.subjectLABOR SUPPLY
dc.subjectLAWS
dc.subjectLEISURE
dc.subjectLEVEL PLAYING FIELD
dc.subjectMARGINAL COST
dc.subjectMARGINAL PRODUCT
dc.subjectOIL
dc.subjectOIL PRICES
dc.subjectOUTPUT RATIO
dc.subjectPOLICY MAKERS
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTION PROCESS
dc.subjectPRODUCTION TECHNOLOGY
dc.subjectPRODUCTIVITY
dc.subjectRATE OF RETURN
dc.subjectREAL INTEREST RATE
dc.subjectRELATIVE PRICES
dc.subjectRENTAL PRICE OF CAPITAL
dc.subjectRESOURCE ALLOCATION
dc.subjectSTREAMS
dc.subjectTAX
dc.subjectTAX COLLECTION
dc.subjectTAX RATES
dc.subjectTAX REFORM
dc.subjectTAX REFORMS
dc.subjectTAX REVENUE
dc.subjectTAXATION
dc.subjectTECHNICAL CHANGE
dc.subjectTIME SERIES
dc.subjectTRANSFER PAYMENTS
dc.subjectTREASURY
dc.subjectTURNOVER TAXES
dc.subjectUTILITY FUNCTION
dc.subjectVALUE ADDED REVENUE SOURCES
dc.subjectREVENUE MOBILIZATION
dc.subjectTAXATION
dc.subjectBANK DEBIT CARDS
dc.subjectFINANCIAL OPTIONS
dc.subjectTRANSACTIONS
dc.subjectTAX REFORMS
dc.subjectTAX RATES
dc.subjectECONOMIC GROWTH
dc.subjectINCOME TAXES
dc.subjectCAPITAL GAINS TAXES
dc.titleRaising Revenue with Transaction Taxes in Latin America - Or Is It Better to Tax with the Devil You Know?en
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crossref.titleRaising Revenue with Transaction Taxes in Latin America: Or is it Better to Tax with the Devil You Know?
okr.date.doiregistration2025-04-10T09:14:49.828115Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2004/04/3401982/raising-revenue-transaction-taxes-latin-america-or-better-tax-devil-know
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeSocial Protection and Labor
okr.globalpracticeFinance and Markets
okr.guid378241468753000512
okr.identifier.doi10.1596/1813-9450-3279
okr.identifier.externaldocumentum000012009_20040511163335
okr.identifier.internaldocumentum3401982
okr.identifier.reportWPS3279
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/05/11/000012009_20040511163335/Rendered/PDF/WPS3279.pdfen
okr.region.administrativeLatin America & Caribbean
okr.topicEconomic Theory and Research
okr.topicBanks and Banking Reform
okr.topicEnvironmental Economics and Policies
okr.topicSocial Protections and Labor::Labor Policies
okr.topicPublic Sector Economics and Finance
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicFinance and Financial Sector Development
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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