Sarah Daway: The introduction is still not well-structured/well-motivated and has to be reorganized. It is still unclear why introducing a RST would be more advantageous to China. Is it in terms of ultimately lower administrative costs (after the transitional phase), its anti-consumption bias, something else? This should be more clearly spelled out.

Related to the previous comment: The paper should explain more clearly why raising the RST and reducing the VAT results in more capital accumulation.

The paper mentions in several places that VAT and RST are equivalent—in what sense, though? VAT and RST can be made equivalent only in terms of the revenues they raise. Otherwise, the RST is essentially a tax on consumption and VAT is a tax on (value-added) production. It is in this sense that raising the RST, which makes consumption relatively more expensive to saving and, ultimately, accumulating capital, would result in higher capital accumulation....

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