nep-acc 2006-08-26 papers

on Accounting and Auditing

Issue of 2006‒08‒26
two papers chosen by
Alexander Harin
Modern University for the Humanities

How Progressive is the U.S. Federal Tax System? A Historical and International Perspective By Thomas Piketty; Emmanuel Saez
TAXATION AND FINANCE CONSTRAINED FIRMS By Iris Claus

How Progressive is the U.S. Federal Tax System? A Historical and International Perspective

By:	Thomas Piketty; Emmanuel Saez
Abstract:	This paper provides estimates of federal tax rates by income groups in the United States since 1960, with special emphasis on very top income groups. We include individual and corporate income taxes, payroll taxes, and estate and gift taxes. The progressivity of the U.S. federal tax system at the top of the income distribution has declined dramatically since the 1960s. This dramatic drop in progressivity is due primarily to a drop in corporate taxes and in estate and gift taxes combined with a sharp change in the composition of top incomes away from capital income and toward labor income. The sharp drop in statutory top marginal individual income tax rates has contributed only moderately to the decline in tax progressivity. International comparisons confirm that is it critical to take into account other taxes than the individual income tax to properly assess the extent of overall tax progressivity, both for time trends and for cross-country comparisons. The pattern for the United Kingdom is similar to the US pattern. France had less progressive taxes than the US or UK in 1970 but has experienced an increase in tax progressivity and has now a more progressive tax system than the US or the UK.
JEL:	H2
Date:	2006–08
URL:	http://d.repec.org/n?u=RePEc:nbr:nberwo:12404&r=acc

TAXATION AND FINANCE CONSTRAINED FIRMS

By:	Iris Claus
Abstract:	This paper develops an open economy model to assess the long-run effects of taxation where firms are finance constrained. Finance constraints arise because of imperfect information between borrowers and lenders. Only borowers (firms) can costlessly observe actual returns from production. Imperfect information and finance constraints magnify the effects of taxation. A reduction (rise) in income taxation increases (lowers) firms' internal funds and their ability to assess external finance to expand production. The findings thus underline the importance of incorporating access to finance into models that assess the impact of taxation.
JEL:	H2 E44 F41
Date:	2006–08
URL:	http://d.repec.org/n?u=RePEc:pas:camaaa:2006-20&r=acc

This nep-acc issue is ©2006 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.

General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.

NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.