|
on Public Finance |
| By: | Sergio Turner |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2006-03&r=pub |
| By: | Aronsson, Thomas (Department of Economics, Umeå University); Sjögren, Tomas (Department of Economics, Umeå University) |
| Abstract: | This paper concerns optimal income taxation in a two-type model extended to allow for social interaction and social norms in the labor market. One type of norm relates to the hours of work among the employed, and we assume that there is a cost associated with deviating from 'normal behavior' (defined in terms of the average hours of work). Another type of norm refers to the pressure of earning one's living by working, where social interaction means that the perceived cost of being out of employment depends on the share of nonworkers in the population. The results show how, and why, the existence of social norms may modify results derived in earlier literature. Under reasonable assumptions, the norm referring to normal behavior in term of work hours provides an incentive for the government to increase the hours of work supplied by the high-ability type relative to the hours of work supplied by the low-ability type, whereas the norm of 'earning one's living by working' strengthens the employment-motive behind tax policy. |
| Keywords: | Optimal Taxation; Social Interaction; Norms |
| JEL: | D60 H21 H53 |
| Date: | 2006–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0672&r=pub |
| By: | Thierry Warin; André Fourçans |
| Abstract: | This paper provides a challenging view to the tax harmonization issue. The literature often proposes tax harmonization to avoid free-riding behaviors in free-trade areas, and more particularly in monetary unions. Countries may decrease their tax rates in order to develop tax competitive advantage and attract capital. Without tax harmonization, tax autonomy may lead to a “race to the bottom.” The model proposed here uses a game-theoretical approach to analyze this question. It shows that tax competition may lead to stability. The mechanism leading to this outcome rests upon the impact of the signal given by both players. If a country gives the signal that “friendly” taxation behavior is not its priority, the result can be a “race to the bottom”. Conversely, if both countries signal their ability to conduct such a war, this war will not occur, and the stability of the system will be ensured. |
| Keywords: | Monetary union, Economic integration, Tax competition, Tax harmonization, Fiscal competition |
| JEL: | H20 H21 H77 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0605&r=pub |
| By: | Jerome Adda (Institute for Fiscal Studies and University College London); Francesca Corniglia |
| Abstract: | This paper evaluates the effect of excise taxes and bans on smoking in public places on the exposure to tobacco smoke of non-smokers. We use a novel way of quantifying passive smoking: we use data on cotinine concentration- a metabolite of nicotine- measured in a large population of non-smokers over time. Exploiting state and time variation across US states, we reach two important conclusions. First, excise taxes have a significant effect on passive smoking. Second, smoking bans have on average no effects on non smokers. While bans in public transportation or in schools decrease the exposure of non smokers, bans in recreational public places can in fact perversely increase their exposure by displacing smokers to private places where they contaminate non smokers, and in particular young children. Bans affect socioeconomic groups differently: we find that smoking bans increase the exposure of poorer individuals, while it decreases the exposure of richer individuals, leading to widening health disparities. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:20/05&r=pub |
| By: | Clemens Sialm |
| Abstract: | This paper investigates whether investors are compensated for the tax burden of equity securities. Effective tax rates on equity securities vary due to frequent tax reforms and due to persistent differences in propensities to pay dividends. The paper finds an economically and statistically significant relationship between risk-adjusted stock returns and effective personal tax rates using a new data set covering tax burdens on a cross-section of equity securities between 1927 and 2004. Consistent with tax capitalization, stocks facing higher effective tax rates tend to compensate taxable investors by generating higher before-tax returns. |
| JEL: | G12 H20 E44 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12146&r=pub |
| By: | Yoshiyasu Ono (Institute of Social and Economic Research, Osaka University); Akihisa Shibata (Institute of Economic Research, Kyoto University) |
| Abstract: | Unless free international lending/borrowing is allowed, domestic saving equals domestic investment and hence saving and investment taxes have the identical effect, as is the case in a closed-economy context. However, if it is allowed, households can accumulate foreign assets besides domestic capital and hence saving and investment are separated, causing the two taxes to have different effects. Using a two-sector growth model, we show that the two taxes generate completely different effects on industrial structure. The investment tax always shrinks the capital-intensive sector whereas the saving tax may well expand it. |
| Keywords: | saving tax, investment tax, two-sector growth model, industrial structure, financial asset trade |
| JEL: | F41 E62 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:613&r=pub |