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on Public Economics |
| By: | Conefrey, Thomas; FitzGerald, John |
| Keywords: | taxes |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2011/2/1&r=pbe |
| By: | Maria-Grazia Attinasi (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt, Germany.); Cristina Checherita-Westphal (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt, Germany.); Malte Rieth (TU Dortmund University, Applied Economics Vogelpothsweg 87, D-44227 Dortmund, Germany.) |
| Abstract: | This paper investigates empirically the effect of personal income tax progressivity on output volatility in a sample of OECD countries over the period 1982-2009. Our measure of tax progressivity is based on the difference between the marginal and the average income tax rate for the average production worker. We find supportive empirical evidence for the hypothesis that higher personal income tax progressivity leads to lower output volatility. All other factors constant, countries with more progressive personal income tax systems seem to benefit from stronger automatic stabilisers. JEL Classification: E63, E32, H10. |
| Keywords: | Progressivity, personal income taxes, output volatility, automatic stabilisers. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20111380&r=pbe |
| By: | Adam, Antonis; Kammas, Pantelis; Lagou, Athina |
| Abstract: | Abstract: This paper applies meta- regression analysis to the empirical literature that examines the impact of international market integration on capital taxation. The main objective is to explore whether particular data, model specification and estimation procedures exert systematic impact on the reported findings. Our results provide empirical evidence that differences across studies can be attributed to differences in the measurement of globalization. Moreover, in contrast to the conventional wisdom, study characteristics related to the measurement of the tax burden on capital appear to have an insignificant effect on the above mentioned relationship. Finally the meta- analysis fails to confirm a negative effect of globalization on the taxation of capital. |
| Keywords: | capital mobility; tax competition; Meta analysis |
| JEL: | H4 F2 H2 |
| Date: | 2011–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33382&r=pbe |
| By: | David Rosnick; Dean Baker |
| Abstract: | There are many economists who argue that temporary tax cuts, like those in the 2009 stimulus and the ones proposed by President Obama last week, have no impact on the economy. They argue that people will save a temporary tax credit rather than spend it. Stanford Economics Professor John Taylor, who served as Under Secretary of the Treasury for International Affairs under President Bush, is one of the economists making this argument. He purports to show that there was no statistically significant increase in private consumption of goods and services as a result of certain types of government transfers made over the last decade. According to his analysis, it is unclear whether an additional dollar of government transfers led to any additional spending, or, alternatively, whether it raised personal savings by more than one dollar. This paper shows that there is very little indication that – based on Taylor’s work – personal transfers from the government fail to stimulate private spending. |
| Keywords: | stimulus, recession, tax cuts |
| JEL: | E E6 E64 E65 H H2 H3 H31 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2011-18&r=pbe |
| By: | Michael Keen |
| Abstract: | The financial crisis has prompted a reconsideration of the taxation of financial institutions, with practice outstripping principle: France, Germany, the United Kingdom and several other European countries have now introduced some form of bank tax, and the U.S. administration has revived its own proposal for such a charge. This paper considers the structure, appropriate rate, and revenue yield of corrective taxation of financial institutions addressed to two externalities, consequent on excessive risk-taking, prominent in the crisis: those that arise when such institutions are simply allowed to collapse, and those that arise when, to avoid the harm this would cause, their creditors are bailed out. It also asks whether corrective taxation or a regulatory capital requirement is the better way to address these concerns. The results suggest a potential role for taxing bank borrowing, perhaps as an adjunct to minimum capital requirements, at marginal rates that rise quite sharply at low capital ratios (but are likely lower when the government cannot commit to its bailout policy), reaching levels higher than those of the bank taxes so far adopted or proposed. |
| Date: | 2011–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/206&r=pbe |
| By: | Guner, Nezih (MOVE, Barcelona); Kaygusuz, Remzi (Sabanci University); Ventura, Gustavo (Arizona State University) |
| Abstract: | Based on well-known evidence on labor supply elasticities, several authors have concluded that women should be taxed at lower rates than men. We evaluate the quantitative implications of taxing women at a lower rate than men. Relative to the current system of taxation, setting a proportional tax rate on married females equal to 4% (8%) increases output and married female labor force participation by about 3.9% (3.4%) and 6.9% (4.0%), respectively. Gender-based taxes improve welfare and are preferred by a majority of households. Nevertheless, welfare gains are higher when the U.S. tax system is replaced by a proportional, gender-neutral income tax. |
| Keywords: | taxation, two-earner households, labor force participation |
| JEL: | E62 H31 J12 J22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5962&r=pbe |
| By: | Joshua Aizenman; Yothin Jinjarak |
| Abstract: | This paper studies the cross-country variation of the fiscal stimulus and the exchange rate adjustment propagated by the global crisis of 2008-9, identifying the role of economic structure in accounting for the heterogeneity of response. We find that greater de facto fiscal space prior to the global crisis and lower trade openness were associated with a higher fiscal stimulus/GDP during 2009-2010 (where the de facto fiscal space is the inverse of the average tax-years it would take to repay the public debt). Lowering the 2006 public debt/average tax base from the level of low-income countries (5.94) down to the average level of the Euro minus the Euro-area peripheral countries (1.97), was associated with a larger crisis stimulus in 2009-11 of 2.78 GDP percentage points. Joint estimation of fiscal stimuli and exchange rate depreciations indicates that higher trade openness was associated with a smaller fiscal stimulus and a higher depreciation rate during the crisis. Overall, the results are in line with the predictions of the neo-Keynesian open-economy model. |
| JEL: | E62 F42 O23 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17427&r=pbe |
| By: | Layte, Richard |
| Keywords: | income inequality/Inequality/Ireland |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2011/2/3&r=pbe |
| By: | Chen, Been-Lon; Chen, Hung-Ju; Wang, Ping |
| Abstract: | In a second-best optimal growth setup with only factor taxes as available instruments, is it optimal to fully replace capital by labor income taxation? The answer is generally positive based on Chamley, Judd, Lucas, and many follow-up studies. In the present paper, we revisit this important tax reform-related issue by developing a human capital-based endogenous growth framework with frictional labor search and matching. We allow each firm to create multiple vacancies and each worker to determine labor market participation endogenously. We consider a benevolent fiscal authority to finance direct transfers to households and unemployment compensation only by factor taxes. We then conduct dynamic tax incidence exercises using a model calibrated to the U.S. economy with a pre-existing 20% flat tax on both the capital and labor income. Our numerical results suggest that, due to a dominant channel via the interactions between the firm's vacancy creation and the worker's market participation, it is optimal to switch partly by a modest margin from capital to labor taxation in a benchmark economy where human capital formation depends on both the physical and human capital stocks. When the human capital accumulation process is independent of physical capital, the optimal tax mix features a slightly larger shift from capital to labor taxation; when we remove the extensive margin of the labor-leisure trade-off, such a shift is much larger. In either case, however, the optimal capital tax rate is far above zero. |
| Keywords: | Tax Incidence; Endogenous Human Capital Accumulation; Labor-Market Search and Matching Frictions |
| JEL: | E62 H22 O40 J20 |
| Date: | 2011–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33209&r=pbe |
| By: | Klênio de Souza Barbosa; Pierre C. Boyer |
| Abstract: | Many local governments allow competition between public and private rms for provision of local public services in order to reduce procurement cost. Competition is usually introduced through competitive tendering for concession contracts. We show that in a symmetric competition between public and private rms with learning-by-doing, private rm's ability to transfer learning among concessions may reduce consumer's welfare. The model provides testable implications which are consistent with the empirical evidence: little competition for concessions, retail prices higher under private operation than under public one, and subsidies and retail prices to service providers increased over time. In addition, consumers' gains from switching to private ownership are higher in industries where private rms have low-ability to transfer learning among dierent concessions. |
| Keywords: | Sequential Auction, Public versus Private Firms, Learning-by-doing, Transferability of Learning |
| JEL: | D44 H57 H70 H87 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:fea:wpaper:06-2011&r=pbe |