John Creedy and Cath Sleeman

This book presents the results of new empirical analyses relating to indirect taxation in New Zealand. The authors examine in detail the equity and efficiency effects of the existing tax system, and of a range of policy reforms. These reforms include the abolition of excise taxes along with an increase in the Goods and Services Tax rate, an increase in petrol taxation, and the imposition of a carbon tax. The analyses use economic models which allow for the fact that households change their consumption patterns when indirect taxes and prices change. Policy debates are inevitably influenced by value judgements, which are seldom made explicit either by governments or those engaging in public discussion. By concentrating on the empirical orders of magnitude, and by examining the implpications of adopting alternative value judgements, it is hoped that the findings of this book can contribute towards rational policy debate on the subject, rather than relying on guesswork and rhetoric.