nep-pub New Economics Papers
on Public Finance
Issue of 2005‒11‒12
seven papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Taxation, Insurance and Precautionary Labor By Nick Netzer; Florian Scheuer
  2. Is Tax Shifting Asymmetric? Evidence from French VAT reforms, 1995-2000. By Clément Carbonnier
  3. Optimum Taxation of Life Annuities By Johann K. Brunner; Susanne Pech
  4. Tax Morale and Fiscal Policy By Benno Torgler; Christoph A. Schaltegger
  5. "Social Security's 70th Anniversary: Surviving 20 Years of Reform" By L. Randall Wray
  6. "Manufacturing a Crisis: the Neocon Attack on Social Security" By L. Randall Wray
  7. Public provision of a private good: What is the point of the BSD license? By Alex Gaudeul

  1. By: Nick Netzer; Florian Scheuer
  2. By: Clément Carbonnier
    Abstract: This paper presents evidence from three French VAT reforms showing that tax shifting on prices operates differently upwards and downwards. This may appear as a paradox when reading usual studies on price shifting. This paper puts forward two different asymmetric effects. The first one is linked to asymmetries in firms' supply curves, which imply that price decreases are smaller than price increases. It occurs because firms decrease their production more easily than they increase it. The second asymmetric effect is linked to asymmetries in customers' demand curves, which react with higher intensity to big price changes than to tenuous ones. Therefore, in markets with monopolistic firms or with collusion - markets that better consider the variations of the demand because of the price making power of firms - price increases are relatively weak in order to prevent the fall of the demand, and price decreases are relatively strong in order to take profit of the takeoff of the demand. This paper shows that this second effect can counteract the first effect in markets with high fixed costs.
    Date: 2005
  3. By: Johann K. Brunner (Department of Economics, Johannes Kepler University Linz, Austria); Susanne Pech (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: The market for private life annuities is characterised by adverse selection, that is, contracts offer lower than fair payoffs to individuals with low life expectancy. Moreover, life expectancy and income have been found to be positively correlated. The paper shows that a linear tax on annuity payoffs, which raises more revenues from long-living individuals than from short-living, represents an appropriate instrument for redistribution, in addition to an optimally designed labour income tax. Further, we find that a nonlinear tax on annuity payoffs can be directly employed to correct the distortion of the rate of return caused by asymmetric information. These results are contrasted with theoretical findings concerning the role of a tax on capital income.
    Keywords: Optimum taxation; life annuities; adverse selection
    JEL: H2 G2
    Date: 2005–11
  4. By: Benno Torgler; Christoph A. Schaltegger
    Abstract: ax morale has received a growing attention in academics as well as in public life. The relevance of tax morale for fiscal policy cannot be neglected as tax morale can help to explain the level of tax compliance or tax evasion. This paper gives an overview of tax morale with a special focus on Switzerland. We highlight the magnitude and the de-terminants of tax morale that have been isolated so far and discuss directions for future research in this area. In particular, we concentrate on fiscal policy implications.
    Keywords: tax morale; tax compliance; tax evasion; fiscal policy
    JEL: H26
    Date: 2005–11
  5. By: L. Randall Wray
    Abstract: Social Security turned 70 on August 14, although no national celebration marked the occasion. Rather, our top policymakers in Washington continue to suggest that the system is "unsustainable." While our nation's most successful social program, and among its longest lived, has allowed generations of Americans to live with dignity in retirement, many think it is time to retire Social Security itself. They claim it is necessary to shift more responsibility to individuals and to scale back the promises made to the coming waves of retiring baby boomers.
    Date: 2005–09
  6. By: L. Randall Wray
    Abstract: For seven decades, the far right has never veered from its avowed mission to gut AmericaÕs most comprehensive, successful, and popular safety net: Social Security.While it had won a few small battles (most notably, the Greenspan CommissionÕs huge 1983 payroll tax hikes and two-year increase in the normal retirement age), its efforts never gained much political traction before 2000. Ironically, the Clinton administration provided some much-needed support to the conservative think tanksÕ preposterous claim that Social Security faces financial Armageddon. And candidate Al GoreÕs only significant campaign issue involved maintaining "lockboxes" to protect the trust fund by dedicating a portion of projected 15-year budget surpluses to the program.
    Date: 2005–02
  7. By: Alex Gaudeul (University of East Anglia - Norwich & ESRC Centre for Competition Policy)
    Abstract: Software is a potentially excludable public good. It is possible, at some cost, to exclude non-paying users from its consumption by using copyright law or technological restraints. Licensing the software under proprietary license terms makes of it a private good, licensing it under the BSD does not change the economic nature of the software while licensing it under the GPL artificially makes of it a pure public good. A project leader will prefer one or the other of those license terms depending on her software project’s market potential and on the cost of developing it. The optimal licensing for a sequence of cumulative innovations and the impact of possible competition between rival software development teams are considered.
    Keywords: Open Source Software; Public Goods; Information Goods; Non- Profit; Volunteer Organisation; Intellectual Property; Copyright; Licensing; Innovation
    JEL: D23 D45 D71 H41 H42 K11 L31 L86 O31 O32 O34
    Date: 2005–11–09

This nep-pub issue is ©2005 by Kwang Soo Cheong. 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 For comments please write to the director of NEP, Marco Novarese at <>. 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.