The purpose of this paper is to extend the analysis of built-in ‡exibilityto various forms of consumption taxation. This is useful in view of theextensive use of indirect taxes. Section 2 begins with basic de…nitions anda discussion of income taxation, concentrating on the multi-step case....

This paper derives analytical expressions for the revenue elasticity of consumption taxes and combined income-consumption tax systems, analogous to those familiar for income taxes. It provides measures of tax revenue elasticities which can readily be applied in practice. Analytical results...