Using the Scholes and Wolfson Framework to Compare an Income Tax and a Form of Consumption Taxation: A Teaching Note

Abstract

This article uses the Scholes and Wolfson (S&W) framework to describe the fundamental aspects of an income tax and a consumption tax and provides a means to compare these two tax regimes. It thereby gives instructors a structured means to discuss these concepts in a tax policy course and provides an application of the S&W models other than investment decision making. The article also employs the S&W models to compare C corporations and flow-through entities under income tax and consumption tax systems.

Citation

Anderson, K.E. (2006), "Using the Scholes and Wolfson Framework to Compare an Income Tax and a Form of Consumption Taxation: A Teaching Note", Luttman, S. (Ed.) Advances in Taxation (Advances in Taxation, Vol. 17), Emerald Group Publishing Limited, Leeds, pp. 169-192. https://doi.org/10.1016/S1058-7497(06)17007-6