Schwager, RobertRobertSchwagerGaube, ThomasThomasGaube2021-06-292021-06-292004https://resolver.sub.uni-goettingen.de/purl?gro-2/87389The proposal to replace income taxes by consumption taxes is a recurrent theme in the political debate. Such a reform has two effects. First, both taxes induce different static distortions. The consumption tax does not affect the consumption-savings margin, but with a given revenue requirement, it must distort the labor supply decision more severely than the income tax does. Second, in a dynamic environment, a switch to the consumption tax induces an implicit lump-sum levy on existing wealth. The resulting efficiency gain, however, implies an intergenerational redistribution at the expense of older individuals.enGoescholarhttps://goescholar.uni-goettingen.de/licensejournal_article10.1177/109114210326167721781https://resolver.sub.uni-goettingen.de/purl?gs-1/8306