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.
John W. Diamond , George Zodrow
Sep 15 2020 | Center for Public Finance
Quianta Moore , Christopher F. Kulesza
Sep 11 2020 | Child Health Policy