What is ‘Tax And Price Index – TPI’
A measure of the percentage that a consumer’s income would have to adjust by in order to maintain the same level of purchasing power. The tax and price index (TPI) takes into account changes in retail prices due to inflation, as well as changes to direct taxes that reduce a consumer’s disposable income. The index uses data collected in the United Kingdom.
Explaining ‘Tax And Price Index – TPI’
Unlike the retail price index (RPI), which uses changes in retail prices only, the TPI also takes into account other factors that affect real disposable income, namely taxes. An increase in both direct taxes and the price of retail goods would require a consumer’s income to increase by more than an increase in retail prices alone. If direct taxes, such as income taxes, are reduced while the price of retail goods increases, the RPI will show a greater increase than the TPI.
Further Reading
- Forecasting construction tender price index in Hong Kong using vector error correction model – www.tandfonline.com [PDF]
- Identifying key economic indicators influencing tender price index prediction in the building industry: a case study of Ghana – www.tandfonline.com [PDF]
- Indexing the Federal Tax System: a cost-of-living approach – www.tandfonline.com [PDF]
- A trade based view on casino taxation: Market conditions – link.springer.com [PDF]
- Tax havens and transfer pricing intensity: Evidence from the French CAC-40 listed firms – www.tandfonline.com [PDF]
- The lodging index: an economic indicator for the hotel/motel industry – journals.sagepub.com [PDF]
- Treasury I and the tax reform act of 1986: The economics and politics of tax reform – www.aeaweb.org [PDF]
- The Impact of Tax Policy on the Economic Growth of Greece – link.springer.com [PDF]
- Adjusting price indices for tax changes – www.jstor.org [PDF]
