Draft Indirect Taxation in Russia: Value Added Taxation and Sales Taxation by Robert F. Conrad* (April 2006) *Associate Professor of Public Policy Studies and Economics Duke University, Durham, North Carolina I wish to thank Ms. Gina Brosius, Ms. Anca Grozav and Ms. Shana Levin for valuable assistance. Any errors are the author s.
I. Introduction The Russian value added tax (VAT) was enacted at the end of 1991 as the Soviet Union was disbanded. At that time, the law was a two-page document, and simply stated that a tax would be imposed on value added at a rate of 28%, without defining how value added would be measured or how the tax would be administered. The State Tax Service (STS) was reorganized during the same time period. The STS had been essentially a local organization within the Soviet space; thus, staff had to adapt to both a change in the structure and function of the agency. A difficult transition to a market-based tax system was expected and the VAT s evolution reflects that expectation. Proposals have been made to replace the VAT with a retail sales tax (RST) at various stages during Russia s transition. RST proponents argue that while there are costs and benefits to either method, the RST, on balance, would be superior to the VAT for a number of reasons, including: 1. The RST is easier to administer, 2. The RST will have a different tax burden relative to the VAT, 3. Rates could be lowered or revenue could be increased, and 4. Compliance could increase. The purpose of this paper is to examine the validity of these claims. It is shown below that none of these claims are true as a matter of substance because the VAT and RST are simply different methods of collecting the same tax (a tax on domestic consumption). There could be particularities of administration in Russia that might make the VAT less efficient. It is argued below, however, that improvements in the VAT have been made and remaining issues could be resolved with less cost than developing a new administrative apparatus. To achieve my objectives, I believe we must again step back to the basics and describe the economic and administrative functions of the VAT and RST, found in Sections II and III. Section IV contains a discussion of applications to Russia in particular and in Section V overall tax policy considerations are discussed. Section VI contains a summary. II. Economics: VAT and Retail Sales Tax (RST) are the Same I believe it is beneficial to review the basic economic concepts before proceeding to a discussion about problems with both taxes. In general, there are four methods of 2
imposing a tax on some measure of market consumption. VAT and an RST are two such measures. 1 The equivalence of these methods is illustrated in Tables 1 and 2 for domestic consumption and Tables 3 and 4 for an exported good. The basic structure of the transaction is: 1. A miller imports wheat and grinds it into flour. 2. A baker buys the flour and bakes bread. 3. The baker either sells the bread to a final domestic consumer (Tables 1 and 2), or exports the bread to a consumer in another country (Tables 3 and 4). A. The VAT A VAT is collected at each stage of production. Thus, on a domestic transaction, VAT is imposed on the imported wheat, the flour sold to the baker, and the baker s sale to the domestic consumer. The taxpayer is allowed a credit for the VAT paid, which implies that the taxpayer pays only the amount of tax corresponding to the value added at that stage of the production process. For instance, consider Table 1, where a VAT of 10% applies. The baker charges the consumer a VAT of 42.5; however, since the baker previously paid VAT of 25 (on the purchase of the flour), he now pays only 17.5 in additional tax to the government. If the objective of the VAT is to tax domestic consumption (a destination-based tax), then a refund is necessary when the bread is exported. A refund or, more correctly, a refundable credit eliminates the indirect tax component from the cost of exports (without the refund, exports would be double taxed if goods and services are exported to countries that employ destination-based consumption taxes and would be accordingly less competitive). 2 B. The Retail Sales Tax When an RST is levied on domestic consumption, tax is imposed only at the 1 In broad terms, there are four methods to tax some measure of domestic market consumption: a VAT, an RST, a personal consumption tax, or a tax on wages plus the initial value of the physical capital stock at the time the tax is imposed. The tax on wages plus the value of the initial capital stock is a tax on market consumption in a dynamic sense because the present value of consumption must equal the value of the initial capital stock plus the present value of wages. Timing of the tax collections under a wage tax would be different relative to a VAT, RST, or personal consumption tax due to timing differences between consumption and wages (saving). The present value, however, would be the same. For a discussion of these equivalences, see Ebrill, et. al (2001). Note the fact that capital goods (investment goods) should be exempt from any consumption tax. There are special problems with real estate. See Conrad (1990) for a discussion. 2 This method is called a destination-based consumption tax. One alternative is a source-based consumption tax, where goods and services are taxed at the location of production (as opposed to the location of consumption), implying that exports are taxed and imports are exempt. 3
retail stage (when the good or service is transferred out of the manufacturing sector). Note the taxable transaction under the RST is identical to the last taxable transaction under the VAT, and also note tax revenues are identical, establishing the methodological equivalence of the VAT and the RST (see Tables 1 and 2). This equivalence is further demonstrated in the case of an export. A tax is not imposed under an RST and thus the good or service is treated the same under both collection methods. In addition, note that the incidence of the RST and VAT are identical. That is, the fact that the VAT is collected at various production stages is immaterial to the incidence of the tax. (Alternatively, the fact that RST is not collected at each production stage is immaterial to the incidence of the consumption tax.) C. Conclusion The VAT and RST are two collection methods that can be implemented to achieve the policy objective of imposing tax on some measure of domestic market consumption. From the perspective of economic methodology, there is no basis to favor one collection method over the other. Both collection methods will result in an increase in relative prices of final consumer goods and services by the amount of the tax and the incidence pattern will be the same for either tax. Furthermore, either tax can be employed, as a matter of method, to accommodate exemptions (food, medical supplies, and other appropriate items), small businesses, and other special situations. Thus, whether one collection method is deemed superior to any other depends on administration and compliance issues. III. Administration in Theory: VAT and RST are not the Same For the purposes of this section, I will assume that some country is considering whether to implement a new consumption tax system. It is clear from Tables 1-4 that there is no methodological advantage to the VAT or RST because either economic result is independent of the collection methodology. It might appear from the examples that the number of taxpayers and overall tax administration costs for an RST are lower than a VAT. This is not the case, however, and it is not clear which tax has an administrative advantage. A. VAT: Administrative Considerations 3 It is true that the VAT must be collected and credited at each stage of the production and distribution process. It is also true that a VAT requires export refunds and refunds on domestic sales to the extent that tax accrued at the time of supply is less than tax accrued on purchases. These two factors are clear costs for the VAT. In addition, if refunds are not prompt, the latter factor can be particularly costly to the 3 It is important to note that the VAT, while perceived as a modern tax, was developed for a noncomputer world where procedures needed to be as simple as possible and records were maintained on paper. 4
private sector because of the time value of money. 4 The former cost, however, should not be too burdensome on the private sector if the VAT is well designed. The VAT process is generally in accord with the accounting process. Thus, the computation and record keeping requirements should not be a significant burden if the VAT is levied on an accrual basis and most (or all) intermediate inputs and all outputs are subject to tax. The VAT base is then equal to sales less taxable purchases. The invoice-credit system further simplifies the process because the invoice can mimic standard invoicing procedures. In many cases, the VAT invoice can be identical to the standard invoice system employed by VAT taxpayers. In effect, the true administrative advantage of the VAT is that it is a transactionsbased tax. This is one reason why many analysts recommend the VAT base be as broad as possible. While economic neutrality might or might not be enhanced with a broader base, it is clear that administrative costs are reduced for both the taxpayer and the tax administrator when the tax is imposed on broad categories. Other costs of the VAT include compliance and evasion costs. Fly-by-night firms are one example of such schemes. A fly-by-night firm can be established to steal the VAT revenue if other parties to the transaction are complicit. For instance, a fly-by-night firm might buy inputs from one person at a low price (paying little or no VAT) and sell at high prices, thus collecting significant VAT revenue. The fly-by-night then keeps the revenue to itself and ceases operations. While potentially significant, such schemes are also common in income tax systems and are not unique to VAT. For instance, individuals can establish businesses and sell their labor services as contractors instead of becoming employees to avoid withholding tax. In effect, the scheme is a method to steal the tax that would have been withheld on their wages. In fact, this last point may be an indicator of significant administrative gains from the VAT. The VAT and income tax have many common features; thus, for the tax administration, common audit techniques and enforcement procedures might be used for both types of tax. For the taxpayer, compliance costs might be lower for both taxes due to coordination of accounting books with accrual income concepts. 4 This cost to the private sector is equal to the interest on the amount of tax the exporter pays for inputs during the period of time between the payment of the tax on inputs and receipt of the refund. The time period between accrual of the expense and payment of the export refund could be long. For instance, Bulgaria, among other countries, would not allow a credit for VAT on inputs until it was demonstrated that the VAT was paid at every prior stage of production in the chain of value added. (Note such administrative rules are a problem for both purely domestic sales and exports.) In general, this rule cannot be administered by taxpayers; taxpayers have no control over sales and purchases further upstream, and it is impossible for the tax administration to audit. 5
B. RST: Administrative Considerations 5 It is clear the RST is supposed to be collected only once at the time a good or service is supplied for private domestic consumption. This can be both a benefit and a cost. First, export refunds are clearly not necessary, which is a benefit. Second, suppliers must be able to determine when a purchaser should be allowed to purchase goods and services tax-free, which is a cost. That is, a retail sale does not occur only at the retail level, however defined. For instance, it is common for wholesalers to sell goods and services to both final consumers and to other businesses. In addition, it is possible in most countries for a consumer to buy a car or other expensive manufactured product directly from the manufacturer. In the age of the Internet, it is possible to purchase domestic goods and services or imports from entities that operate at all stages of production and distribution. Thus, it is imperative that the seller be required to identify himself or herself and whether he or she qualifies to purchase the good or service tax-free. In most situations, identification is determined by establishing what is called a ring-system. A ring is essentially a club where trade among members of the ring is tax-free and tax is charged only on sales to persons who cannot demonstrate membership in the ring. The net effect of establishing a ring is that the government must register all suppliers and issue taxpayer numbers that identify the members of the ring. Thus, the number of taxpayers in a sales tax system will be identical other things equal, as a matter of method, to the number of registered taxpayers for the VAT. The difference is that, in an RST, legitimate suppliers will need proof of eligibility, otherwise tax will be imposed and cascading will result. Third, the need for identification complicates the administration of an RST for both the taxpayer and the tax collector. The taxpayer (supplier) must determine whether each sale is taxable. If the purchaser is a member of the ring, then no RST is imposed; if the purchaser is not a member, RST will be imposed. Under a VAT, all taxable supplies would be subject to VAT, eliminating the need for the supplier to decide whether to impose the tax. From the tax administration s perspective, all suppliers, including customs, must be audited under either system. To facilitate audits, the supplier must maintain records, including invoices with taxpayer numbers of ring members, invoices of sales to non-ring members (including exports as a separate category), and receipts for payments. Thus, the record keeping requirements are generally similar to those of the VAT, and there is no clear administrative gain to either the taxpayer or the tax administrator. In addition, the RST must be on an accrual basis (not cash) as under the VAT because the system is an accounts-based tax system. It might be argued that audits on operations further upstream are wasteful because no revenue will be collected if all sales are made to other ring members. For 5 See Gale and Holtzblatt (2000) and Ebrill et. al (2001) for a more detailed discussion of administrative considerations for the RST. 6
instance, a steel mill will generally not sell trusses to persons outside the ring and thus it makes little sense for the steel mill owner to maintain such records or the tax administration to engage in audits. Three arguments can be made against this claim. First, many enterprises engage in manufacturing, distribution, and marketing. Therefore, it can be common for such enterprises to sell to non-ring members. Second, manufacturers, wholesalers, and distributors have a clear incentive to sell directly to the public (non-ring members) if they are not required to register and comply. A significant RST, in excess of 7%-8%, increases this incentive. Non-ring members will have an incentive to seek non-taxable outlets in order to arbitrage the tax, and profit-maximizing suppliers will oblige. Third, absent registration and compliance activities, ring-members will have an additional incentive to use the ring to buy goods and services for their own consumption. Finally, evasion can be a significant issue for the RST. Some types of evasion are similar to evasion schemes under the VAT (e.g. cash transactions without receipts where tax is not collected). Other evasion schemes are different, such as the leakage arising from sales to non-ring members in which RST is not collected. In fact, a type of reverse fly-by-night firm can exist. A taxpayer can establish a firm, obtain a number, and then purchase goods and services on a tax-free basis. This firm can then disappear with the goods and either consume the goods or sell the goods on informal markets. The net theft is identical to the revenue loss with a fly-by-night firm under a VAT. 6 C. Conclusion I do not want to imply the RST is easier or more difficult to administer as a matter of method. I am ambiguous about the administrative superiority of either tax. What is striking, however, are the similarities of administrative procedures that are necessary under each system. In particular, both the VAT and RST will: Include the same number of taxpayers; Require invoices stating sales and identifying purchasers and sellers (with identification numbers); Depend on tax administrators to audit all firms; Rely on the customs administration to determine the identity of the purchaser (except for de minimus amounts); 6 It might be argued that there is a greater incentive to evade a sales tax because all the tax is collected at the final stage. I am not convinced by this argument. Both sales tax and VAT taxpayers have an incentive to evade the final sale in order to keep prices low (or to steal the tax revenue) because the value of the tax is the same. It might be easier to identify evasion with a VAT relative to a sales tax because taxpayers under a VAT will try to get credits for their inputs. These input credits will be an indicator of sales. Such administrative benefits are not present with an RST. 7
Function on an accrual basis; and Need reasonable enforcement to combat evasion. In effect, both methods are accrual-based systems dependent upon accounts of all persons subject to (or exempt from) the tax. The crux of the administrative benefits then depend to a significant degree on the nature of the export rebate system under the VAT relative to the cost of identifying all traders in a ring system. The rest of the world has decided about the relative advantages of the VAT. The VAT would not be used so widely unless countries (developed and emerging) were convinced the VAT is a more cost-effective revenue collection method. IV. Application (in Russia in particular): VAT and RST are not the Same In practice, neither VAT nor RST is imposed on the broadest possible base and the environment for compliance is generally more difficult than theoretical analysis suggests. Most consumption tax systems contain exemptions and exempt particular persons, in addition to small business laws and minimum turnover levels, making cascading a potential part of any system. A. Exempt Goods and Services Suppliers of mixed or exempt goods and services will have to maintain similar records under either tax regime. Administration for either tax is made more cumbersome, particularly for suppliers of goods and services that are exempt. B. Exempt Taxpayers Under RST, exempt taxpayers would have to be classified differently than ring members. Since exempt generally means neither sales nor purchases are subject to RST, the tax administration will have to ensure that exempt taxpayers comply with the conditions for maintaining the benefit. Under a VAT, on the other hand, an exempt taxpayer is generally exempt on taxable supplies but not purchases. This result is not desirable because exempt suppliers must pay tax on their purchases. In effect, exempt suppliers are treated like final consumers who pay VAT at the time of purchase. Cascading may result. The alternative is to develop a credit refund system (in effect zero rating), but this option is considered too cumbersome to be worth it. C. Services The ability to tax services under an RST has been subject to significant debate. 7 Many services, such as legal services, delivery services, agriculture, education, and 7 See Financing the Future (2006). 8
others, are provided to both taxpayers and consumers. Given the administrative difficulties of dealing with mixed sales, services are either fully exempt or fully taxed under an RST. For instance, delivery services are taxed in many US states but legal services are exempt. 8 As a result of this differential treatment, the tax on services either cascades or services escape taxation altogether. The former situation can be significant. For instance, it is estimated that at least 40% of RST revenue in the US results from cascading on business-to-business transactions (Ring 1989). The latter situation can result in higher prices on goods (other things equal) and a deterioration of the base through time due to the increased share of services in the growing economy. Thus, many states in the US are now grappling with growth in the demand for public services while experiencing a reduction in the relative effective tax base. 9 D. Small Business Exemptions Small businesses, however defined, are exempt from collecting domestic consumption taxes, except excises. In effect, small businesses are treated as other exempt organizations such as non-governmental organizations. The incentives for small business created by the VAT and RST depend on the nature of the exemption. For instance, small businesses generally pay VAT on their inputs and are exempt from collecting output tax. Thus, concerns about cascading under the VAT are greater, because small businesses may be engaged in activities other than retail sales. The incentive to split large firms into smaller firms may be stronger under an RST than a VAT if small business is exempt on both inputs (being effectively a member of the ring) and outputs. This type of abuse is generally attributed to the special income tax treatment of small businesses because sales are exempt from RST. Thus, large businesses can create small retailers to sell exempt output and thus arbitrage the RST. On the other hand, the income tax incentive to split firms is mitigated a bit by the VAT because the small business taxpayer must pay VAT on inputs, resulting in increased costs and cascading. 10 E. Multiple Rates Administration of both the VAT and RST is more complex with multiple rates. Excess credits may be generated with the VAT if the rate on sales is greater than the tax rate on inputs. Administrators of an RST, as those of the VAT, will have to contend with further definitional distinctions. In effect, the exemption problems described above are increased with multiple rates. Instead of two rates (the statutory rate and zero rate for exempt goods and services), there will be at least three rates. 8 See Financing the Future (2006). 9 See Financing the Future (2006). 10 The number of taxpayers under an RST might be larger if small businesses are required to register for the RST. 9
V. Overall Tax Policy Considerations: Transactions-Based Taxation It can be misleading and, perhaps, inappropriate to compare the VAT and RST in isolation from the rest of the tax system. The public sector operates in a competitive environment and I believe the most important, perhaps only, comparative advantage the public sector has is its ability to legally withhold tax before the taxpayer gets any funds. This comparative advantage exists in both developed and emerging economies. It is particularly important in the latter, where institutions are relatively weak and accounting standards and tax concepts are emerging. This comparative advantage leads to what might be called collection-driven tax systems, which I have advocated for in Russia, among other countries. The system includes a combination of income, consumption, and property taxation, which depends almost exclusively on withholding taxes (effectively a VAT is a withholding tax because the tax is collected by the taxpayer on behalf of the purchaser). In its pure form, taxation depends on one criterion that must be determined with respect to every transaction: 1. Is this payment or supply a capital supply? 2. If the payment or supply is a capital supply, then there is no taxation. If the payment or supply is not a capital supply, then purchases and supplies need to be tax inclusive. Note there are no distinctions for wage, interest, dividends, food, automobiles, televisions, legal services, or other commodities. Everything but capital transactions is taxed on a transaction-by-transaction basis. These distinctions matter only with respect to which party collects the withholding tax. Thus, the VAT and income tax withholding work in tandem. For instance, if labor is supplied to a firm, the firm should withhold on wages. If the firm purchases raw materials, then VAT is withheld by the supplier. In effect, every supply of goods and services is taxed and withholding is imposed on every payment to primary factors of production (capital and labor). In summary, two distinctions are necessary in order to operate a transaction-based tax system: capital versus non-capital transactions, and intermediate versus primary inputs. There are a number of advantages to this system: 1. Administration is enhanced because definitions are kept to a minimum and both income and consumption taxation are based on one set of accounts. 2. The system has the potential to work because there are offsetting credits. For instance, the purchaser of an intermediate input is able to offset VAT against VAT collected from sales. A labor or capital owner should be able to either take a credit for the amount withheld or be exempt from filing tax forms because the payment received is a net of tax payment. (The exact structure will depend on the rate system and the filing requirements.) 10
3. The parts of the system are coordinated. Businesses should be encouraged to develop one set of unified tax accounts, transaction records, and other materials consistent with both the income and consumption tax (for instance, tax invoices can be receipts for deductions and sales for both income tax and VAT). Tax administrators will rely on one set of integrated accounts and procedures to monitor compliance with both taxes. 4. The system encourages learning by doing. This experiential learning is particularly important for transition economies, where the need for unified accounting and tax concepts are apparent after almost fifteen years of reform. Learning by doing can have benefits beyond the tax system, as investors and lenders apply the same concepts and standards to invest in a particular activity. 5. Finally, transaction-based taxation may be easier to administer than exemption systems such as the RST. As noted above, VAT and income tax can share common accounts and methods. In addition, the complexity of a ring system is mitigated. In summary, taxes are a cost of doing business and should be perceived as such. Transaction-based taxation is one means to achieve this objective. The system can be simplified if taxes are integrated into the general transaction process a business process that must be developed if enterprises are to grow. These benefits are reduced, and perhaps lost, with an RST because there is less value to accounting for transactions below the retail level for both the tax administrator and the taxpayer, even though those records are necessary to perform both business and audit functions. The cost of adopting this system is the credit system for the VAT. It was noted above, however, that both developed and emerging economies have demonstrated their perceptions about relative administrative costs by overwhelmingly adopting a VAT. VI. Summary: The VAT is the Best Option for Russia The transition of the VAT in Russia has been difficult and there has been much learning. In fact, I believe the Russian VAT was until recently a value added tax in name only. With the adoption of accrual accounting beginning in 2006, there is now an opportunity for the VAT to become a fully functional consumption tax. Both taxpayers and tax administrators have gained experience and there is clearly learning by doing. There is international evidence to suggest compliance and revenues benefit as the VAT evolves. Ebrill, et. al. (2001) report empirical results suggesting experience and literacy enhance the VAT. Although general literacy in Russia is not an issue, tax literacy has been a difficult problem as both businesses and the government have had to learn market-oriented tax and accounting concepts. This process will continue for several years and the VAT is a system that can accommodate this further transition. The costs of enhancing the VAT include ensuring a functional credit system, 11
ensuring that accrual standards are applied, and increasing compliance activities. I believe improvements in the credit system are political, not economic. The government needs to give a clear signal to the tax administration that the credit system, complete with refunds, is an essential element of tax modernization. The risks of noncompliance are small relative to the benefits of making the government, and the tax administration in particular, obey the law. The need for taxpayers to avoid and evade tax will be reduced if the government honors its legislative commitment. At a minimum, noncompliance will not increase. Finally, the benefits of maintaining the VAT are significant when matched with the fixed costs of changing the entire indirect consumption tax system. Revenues cannot be expected to be as great with the RST as with the VAT if problems with service taxation arise. This problem will become more acute through time as services become more important in Russia. Compliance will fall initially because of misunderstandings and procedural adjustments. Furthermore, economic integration with Europe will be more difficult with an RST, a cost that could reduce growth and overall economic activity. In the future, there may be cases when the RST is superior to the VAT, depending in part on the increased use of credit cards by consumers and the further development of information technology. For instance, if cash transactions were eliminated entirely and all payments were made electronically via secure accounts, tax would be withheld at the time of the electronic charge (or transfer), the taxpayer status would be known, and audits would be facilitated by non-cash records. Nevertheless, no country, including Russia, is at that stage of financial development. Thus, the VAT should be the standard in Russia for the foreseeable future. 12
Table 1 Value Added Tax (Imported Item - Domestic Sale) Imported Item Wheat Miller Baker Sale 150 250 425 Domestic Consumer Purchases of Intermediate Outputs 150 250 425 Value Added (Consumption 100 175 Base) Tax Collected 15 25 42.5 Tax Credited 15 25 Net Tax Paid 15 10 17.5 13
Table 2 Retail Sales Tax (Imported Item - Domestic Sale) Item Imported Wheat Miller Baker Sale 150 250 425 Domestic Consumer Purchases of Intermediate Outputs 150 250 425 Value Added (Consumption 100 175 Base) Tax Collected 42.5 Tax Credited 0 Net Tax Paid 42.5 14
Item Imported Wheat Table 3 Value Added Tax (Imported Item - Export) Miller Baker Export Sale 150 250 425 Purchases of Intermediate Outputs 150 250 425 Value Added (Consumption 100 175 Base) Tax Collected 15 25 0 Tax Credited 15 25 Net Tax Paid 15 10 (25) 15
Item Table 4 Retail Sales Tax (Imported Item - Domestic Sale) Imported Wheat Miller Baker Export Sale 150 250 425 Purchases of Intermediate Outputs 150 250 425 Value Added (Consumption 100 175 Base) Tax Collected 0 Tax Credited Net Tax Paid 0 VAT RST Costs Costs 1. Need export refund system 1. Ring system is needed 2. Tax on all transactions 2. Need to audit the entire chain of value added even if there is no revenue 3. Particular types of Abuse: Fly -by 3. Particular types of abuse: leakage, night false claims Benefits Benefits 1. Tax on all transactions 1. No export refund system is necessary 2. Procedures common to other income taxes 16
References Conrad, Robert. 1990. The VAT and Real Estate. In Malcolm Gillis, Carl S. Shoup, and Gerardo P. Sicat, eds., Value Added Taxation in Developing Countries. Washington, DC: The World Bank. Ebrill, Liam, Michael Keen, Jean-Paul Bodin and Victoria Summers. 2001. The Modern VAT. Washington, DC: The International Monetary Fund. Gale, William G. and Janet Holtzblatt. 2000. The Role of Administrative Factors in Tax Reform: Simplicity, Compliance, and Administration. In George R. Zodrow and Peter Mieszkowski, eds., United States Tax Reform in the Twenty-First Century. Cambridge: Cambridge University Press. Institute for Emerging Issues. 2006. Financing the Future. 21st Annual Emerging Issues Forum. Raleigh, North Carolina, February 6-7. Ring, Raymond R. 1989. Proportion of Consumers and Producers Goods in the General Sales Tax. National Tax Journal 42, 2: 167-79. 17