The Case for Taxing Services

Background John Due made the following economic argument for taxing services: "The distinction between a service and a commodity is not a very significant one, since both satisfy personal wants. A haircut, an opera concert or a plane ride satisfy persons' desires in the same manner as a loaf of bread, a piano, or an automobile.... Persons making relatively high expenditures for services are favored compared to those concentrating their purchases on tangible goods, resource allocation may be distorted, and in some cases administrative complications are created." CO CDOR

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