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COVID-19 Information and Guidance


This report examines the macroeconomic and transitional effects of implementing a specific type of consumption tax reform -- the national retail sales tax known as the FairTax, as specified in H.R. 25 -- with a focus on the effects of such a reform on the housing sector, including reform-induced reductions in the prices of existing housing. The analysis is conducted within the context of a dynamic overlapping generations computable general equilibrium model that includes a corporate sector that produces a nonresidential composite good as well as noncorporate rental housing and owner-occupied housing production sectors and allows for the costs of adjusting all capital stocks in response to the enactment of the reform.


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