Digital Consumption Tax (D-CT)


Digital Consumption Tax (D-CT)


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Modern technology is dramatically changing the way consumption taxes are collected, but it is also changing the way policymakers assess the operation and impact of these taxes. Whether the design is a standard credit-invoice value added tax (VAT) of European design, or a retail sales tax (RST) of American design, or the credit subtraction VAT without invoices type of consumption tax (CT) of Japanese design, technology is having a profound impact. This book begins and ends with a tax reform. It starts with a proposal to the President's (George W. Bush's) Advisory Panel on Federal Tax Reform, and ends with a proposal for the consideration of Prime Minister Junichiro Koizumi's Tax Commission. Neither tax reform commission appears at the moment to be considering technological solutions, although both are critically interested in consumption taxes. In the U.S. case both of the identified structural barriers to a federal level VAT (federal-state coordination and regressivity) can be answered technologically. In the Japanese case a wholesale transformation of the CT is under consideration; one that would move the Japanese CT to an invoice system with multiple rates and a standard rate of 10 percent or higher. The structural departure that this proposal makes from the traditional Japanese CT need not be taken if technological solutions are applied, although the double digit rate increase seems to be a given for revenue reasons.



Publication Date



Kansai University Press


Suita, Osaka, Japan



Digital Consumption Tax (D-CT)