RESEARCH PAPER NO. 784
THE GST AND VERTICAL, HORIZONTAL AND RERANKING EFFECTS OF INDIRECT TAXATION IN AUSTRALIA
by
JOHN CREEDY
MAY 2001
Department of Economics. University of Melbourne. Melbourne Victoria 3010 Australia
ABSTRACT
This paper decomposes the redistributive effect of indirect taxation into vertical, horizontal inequity and reranking effects. The latter two effects arise because households with the same total expenditure have different patterns. The pre-and post-GST structures in Australia are examined. The results show that an important role is played, in particular, by reranking.
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