PREFERENCES, TAX STRUCTURE AND TAX REFORM: THEORY AND EVIDENCE

8 When the structure of tax revenues-the proportion ofrevenues earned byADstract income, consumption and wealth taxes-is treated as a pure public good, auseful framework emerges for analyzing interrelationships among tax-payers ' preferences, tax structure and tax reform. The "optimal " tax structure is defined and used to outline several conjectures about the current shift from direct to indirect taxation, evident particularly in Europe. Attention is then focused on the U.S. tax system. The structure of the tax system is shown to have changed very little in the past two decades. In contrast, interview surveys carried out over the past thirty years indicated a long-standing shift in taxpayers ' preferences toward indirect taxes. Implications are drawn regarding tax reform