The Historical Aspects of the Meade Report

Abstract

  This paper revisits the expenditure tax theory by examining the reform proposals of the Meade Report. By considering the Meade Report not as a theoretical book but as a practical reform plan, and by taking James Meade’s fiscal philosophy into account, it reveals that the reform proposals in the report are a combination of three elements and that the rationale for the expenditure tax is not based on tax principles but on the specific aim of overcoming economic stagnation. On the other hand, the Meade Report was frequently mentioned in studies on public finance in Japan, and expenditure tax drew attention as a potential tax reform plan. However, the tax was researched mainly in terms of abstract tax principles and the report’s expenditure tax proposal was evaluated from the viewpoint of equity. These differences between the formation of the actual reform proposals in the Meade Report and their subsequent interpretation in Japan indicate that the theoretical superiority of expenditure tax is not uniquely determined but depends highly on historical contexts.