nep-pub New Economics Papers
on Public Finance
Issue of 2005‒01‒02
eight papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Energy Taxes as a Signaling Device: An Empirical Analysis of Consumer Preferences By Ghalwash, Tarek
  2. From Public Pension to Private Savings: The Current Pension Reform Process in Europe By Axel Börsch-Supan
  3. Mind the Gap: The Effectiveness of Incentives to boost Retirement Saving in Europe By Axel Börsch-Supan
  4. Pension Reform in Germany: The Impact on Retirement Decisions By Berkel, Barbara und Börsch-Supan, Axel
  5. Aging, Pension Reform, and Capital Flows: A Multi-Country Simulation Model By Börsch-Supan, Axel; Ludwig, Alexander; Winter, Joachim
  6. Vertical and horizontal tax competition in the transport sector By De Borger B.; Proost S.
  7. Estate and Capital Gains Taxation: Efficiency and Political Economy Considerations By Saku Aura
  8. Employment and Taxes By Stephen Nickell

  1. By: Ghalwash, Tarek (Department of Economics, Umeå University)
    Abstract: This paper presents an econometric study dealing with household demand in Sweden. The main objective is to empirically examine the differences in consumer reaction to the introduction of, or the change, in environmental taxes. Main focus is on environmental taxes as a signaling device. The hypothesis is that the introduction of an environmental tax provides new information about the properties of the directly taxed goods. This in turn may affect consumer preferences for these goods, hence altering the consumption choice. The result from the econometric analysis shows that all goods have negative own-price elasticities, and positive income elasticities. Concerning the signalling effect of environmental taxes the results are somewhat ambiguous. The tax elasticity for energy goods used for heating seems to be significantly higher than the traditional price elasticity, whereas the opposite seems to be the case for energy goods used for transportation.
    Keywords: Household demand; energy tax; tax elasticities; emissions
    JEL: D12 H31 Q41
    Date: 2004–12–22
  2. By: Axel Börsch-Supan (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: Reforms of the public pension systems are on top of the European policy agenda. Current costs are high, and the pressures will increase due to population aging and negative incentive effects. This paper describes the causes of the current pension problems and the cures required to make the pay-as-you-go public pension systems in Continental Europe sustainable. There is no single policy prescription that can solve all problems at once. Reform elements include a freeze in the contribution and tax rates, an indexation of benefits to the dependency ratio, measures to stop the current trend towards early retirement, an adaptation of the normal retirement age to increased life expectancy; and more reliance on private savings – elements of a sustainable but complex multipillar system of retirement income provision.
    Date: 2004–06–21
  3. By: Axel Börsch-Supan (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: Pension reforms all across Europe have a common theme: to reduce the generosity of the pay-as-yougo public pension pillar threatened by population aging, and to build up new pillars by private saving through occupational and individual pension plans. The extent of such retirement saving varies a great deal across Europe. This variation reflects, among other factors, the differences in public pension systems, taxation and capital market regulations. The first part of this paper looks at this variation in an attempt to learn about the effectiveness of the various incentives to boost retirement saving. While we find a strong correlation between the generosity of pay-as-you-go pensions and retirement saving, there is no straight correlation between the volume of retirement saving and the extent to which it is tax-favored. The second part of the paper uses the recent reforms in Germany as "experiments" that may shed light on which incentives might work and which might fail. We describe the introduction of the tax-favored "Riester pension plans" in 2001 and the 2004 tax reform, which changes the tax treatment of retirement savings in Germany from a conventional to a deferred taxation scheme. In spite of a deep subsidy and a generous tax treatment, "Riester pensions" have not found much attraction, while the originally heavily tax-favored whole life insurance is still wide spread. We conclude that boosting retirement saving requires more than simply tax relief.
    Date: 2004–06–23
  4. By: Berkel, Barbara und Börsch-Supan, Axel (Mannheim Research Institute for the Economics of Aging (MEA))
    Date: 2004–03–31
  5. By: Börsch-Supan, Axel; Ludwig, Alexander; Winter, Joachim (Mannheim Research Institute for the Economics of Aging (MEA))
    Date: 2004–08–25
  6. By: De Borger B.; Proost S.
    Abstract: The purpose of this paper is to review the literature dealing with horizontal and vertical tax competition in the transport sector, taking into account the role of transport externalities. Our emphasis throughout is on tax competition between welfare maximizing governments. For the various different settings (horizontal and vertical competition, parallel and serial networks), we discuss the relevance of tax competition and describe the type of results obtained in the scarce literature on the topic. We further point out the relevance of different types of tax competition for transport policy in a European setting. Finally, we discuss the losses of non-cooperative behaviour of governments.
    Date: 2004–10
  7. By: Saku Aura (Department of Economics, University of Missouri-Columbia)
    Abstract: In this paper a simple dynastic overlapping-generations model with homogeneous agents is used to analyze the optimal use of capital income tax, labor income tax and estate tax. The results of this analysis add to the conventional wisdom about capital income taxation: while it is true that in the long run the estate tax rate should be set to zero, it is also true that other capital income taxation is a usable policy tool even in the steady state. The other contribution of the paper is the building of a simple dynamic political economy model where the structure of capital taxes is determined. In a median-voter framework with no policy commitment, estate taxation is used too heavily as a capital-tax-revenue-collecting tool relative to the second-best optimum for the social planner.
    JEL: H21 H24
    Date: 2004–12–16
  8. By: Stephen Nickell
    Abstract: This paper considers the impact of taxation policy on market work. On the basis of theevidence, we find that a 10 percentage point rise in the tax wedge will reduce overall labourinput provided via the market by around 2 per cent of the population of working age. The taxwedge is the sum of the payroll, income and consumption tax rates.This only explains a minority of the market work differentials across count ries. Muchof the remainder is probably down to the differences in the social security systems supportingthe unemployed, the sick and disabled and the early retired.
    Keywords: Employment, Taxation, Labour Supply
    JEL: H2 J2
    Date: 2004–05

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