On December 11, 2014, Senate Finance Committee member Benjamin L. Cardin, D-Md., introduced S. 3005, the Progressive Consumption Tax Act of 2014, which calls for the adoption of a 10 percent VAT. The adoption of a VAT would have far-reaching effects on the economy, including the Social Security...

It is well known that pay-as-you-go retirement programs reduce steady-state welfare and the capital stock in dynamically efficient overlapping generation (OLG) economies. The common two-period OLG model obscures, however, the relationship between the magnitude of these effects and the ages at...