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on Public Finance |
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Issue of 2012‒02‒20
five papers chosen by |
| By: | Konstantinos Angelopoulos; James Malley; Apostolis Philippopoulos |
| Abstract: | The stylized facts suggest a negative relationship between tax progres- sivity and the skill premium from the early 1960s until the early 1990s, and a positive one thereafter. They also generally imply rising tax progressivity, except for the 1980s. In this paper, we ask whether optimal tax policy is consistent with these observations, taking into account the demographic and technological factors that have also affected the skill premium. To this end, we construct a dynamic general equilibrium model in which the skill premium and the progressivity of the tax system are endogenously determined, with the latter being optimally chosen by a benevolent government. We find that optimal policy delivers both a progressive tax system and model predictions which are generally consistent, except for the 1980s, with the stylized facts relating to the skill premium and progressivity. To capture the patterns in the data over the 1980s requires that we adopt a government policy which is biased towards the interests of skilled agents. Thus, in addition to demo- graphic and technological factors, changes in the preferences of policy-makers appear to be a potentially important factor in determining the evolution of the observed skill premium. |
| Keywords: | skill premium, optimal tax policy, government preferences |
| JEL: | E62 E65 J31 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2012_01&r=pub |
| By: | Andre C. Silva |
| Abstract: | I relate hours worked with taxes on consumption and labor for Portugal, France, Spain, United Kingdom and United States. From 1986 to 2001, hours per worker in Portugal decreased from 35.1 to 32.6. With the parameters for Portugal, the model predicts hours worked in 2001 with an error of only 12 minutes from the actual hours. Across countries, most predictions differ from the data by one hour or less. The model is not sensible to special assumptions on the parameters. I calculate the long run effects of taxes on consumption, hours, capital and welfare for Portugal. I extend the model to discuss implications for Social Security. I discuss the steady state and the transition from a pay-as-yougo to a fully funded system. JEL codes:E6, H3 |
| Keywords: | labor supply, consumption tax, labor income tax |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp561&r=pub |
| By: | Stevenson, Adam |
| Abstract: | The issue of same-sex marriage legalization is increasingly part of the national political dialogue. This legalization would have a number of economic impacts, one of the most direct being a change in income tax payments, through the so-called marriage penalty. I estimate the effects of same-sex marriage legalization on federal income tax revenue. These estimates rely critically on the responsiveness of labor supply and marital choice to changes in the tax code. I present new evidence on both topics using changes in taxation generated from the 2003 Jobs and Growth Tax Relief Reconciliation Act. In addition, I propose a novel measure of the marriage penalty that incorporates the fact that agents will respond optimally to changes in marginal tax rates within the household. |
| Keywords: | labor supply; marriage penalty; sexual orientation; DOMA |
| JEL: | H24 J22 J12 D10 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36532&r=pub |
| By: | Ivanyna, Maksym; von Haldenwang, Christian |
| Abstract: | Some countries fail to ensure that their citizens and businesses make an appropriate contribution to the financing of public tasks. But not all countries with a low tax ratio automatically fall into this cat-egory. This paper presents an approach to bridge the gap between probabilistic statements based on statistical analyses, and country-specific information. Rather than defining general across-the-board criteria, the approach accounts for different development levels and other influencing factors, such as regional patterns, non-tax revenue and governance. Findings on individual countries or groups of countries should put governments, donors and international organisations in a better position to decide on tax reform programmes and aid modalities. -- |
| Keywords: | tax system,tax ratio,governance,developing countries |
| JEL: | H20 H60 H27 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201210&r=pub |
| By: | Halvor Briseid Storrøsten (Statistics Norway) |
| Abstract: | This paper shows that tradable emissions permits and an emissions tax affect the firms' technology choice differently under uncertainty. A tax encourages the most flexible technology if and only if stochastic costs and the equilibrium permit price have sufficiently strong positive covariance, compared with the variance in consumer demand for the good produced. Moreover, the firms' technology choices are socially optimal under tradable emissions permits, but not under an emissions tax. Hence, modeling endogenous technology choice provides an argument in favor of tradable emissions permits as compared with emissions taxes. |
| Keywords: | Regulation; Technology choice; Welfare; Uncertainty; Investment. |
| JEL: | H23 Q55 Q58 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:677&r=pub |