Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

The Effects of Income and Consumption Tax Regimes and Future Tax Rate Uncertainty on Proportional Savings and Risk-Taking

Janet A. Meade
The Accounting Review
Vol. 70, No. 4 (Oct., 1995), pp. 635-653
Stable URL: http://www.jstor.org/stable/248251
Page Count: 19
  • Subscribe ($19.50)
  • Cite this Item
The Effects of Income and Consumption Tax Regimes and Future Tax Rate Uncertainty on Proportional Savings and Risk-Taking
Preview not available

Abstract

This paper uses an experimental design to examine how income and consumption tax regimes and future tax rate uncertainty affect proportional savings and risk-taking. For the experiment, undergraduate subjects were given certificates redeemable for goods and services at two time periods. They were then asked to determine the time at which they wished to redeem the certificates and the manner in which they wished to allocate unredeemed certificates between safe and risky investment funds. The results indicate that when future tax rates are certain, an income tax regime reduces proportional savings and increases proportional risk-taking when compared to a consumption tax regime. When future tax rates are uncertain, the effects are more complex. They generally suggest, however, that future tax rate uncertainty adversely affects the savings and risk-taking neutrality of a consumption tax regime while diminishing the risk-taking incentive of an income tax regime.

Page Thumbnails

  • Thumbnail: Page 
635
    635
  • Thumbnail: Page 
636
    636
  • Thumbnail: Page 
637
    637
  • Thumbnail: Page 
638
    638
  • Thumbnail: Page 
639
    639
  • Thumbnail: Page 
640
    640
  • Thumbnail: Page 
641
    641
  • Thumbnail: Page 
642
    642
  • Thumbnail: Page 
643
    643
  • Thumbnail: Page 
644
    644
  • Thumbnail: Page 
645
    645
  • Thumbnail: Page 
646
    646
  • Thumbnail: Page 
647
    647
  • Thumbnail: Page 
648
    648
  • Thumbnail: Page 
649
    649
  • Thumbnail: Page 
650
    650
  • Thumbnail: Page 
651
    651
  • Thumbnail: Page 
652
    652
  • Thumbnail: Page 
653
    653