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on Public Finance |
| By: | Louis Kaplow |
| Abstract: | A substantial literature addresses the design of transfer programs and policies, including the negative income tax, other means-tested transfers, the earned income tax credit, categorical assistance, and work inducements. This work is largely independent of that on the optimal nonlinear income tax, yet formulations of such a tax necessarily address how low-income individuals should be treated. This paper draws on the optimal income taxation literature to illuminate the analysis of transfer programs, including the level and shape of marginal tax rates (including phase-outs), the structure of categorical assistance, and the role of work inducements in an optimal income transfer scheme. |
| JEL: | H21 H53 I38 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12284&r=pub |
| By: | Peter J. Lambert (University of Oregon Economics Department); Helen T. Naughton (University of Oregon Economics (Student)) |
| Abstract: | What does an equal sacrifice tax look like in the case of a rank-dependent social welfare function? One's tax liability evidently becomes a function of one's income and one's position in the distribution in such a case, but not much else appears to be known. (Menahem Yaari touched upon the issue in his paper "A controversial proposal concerning inequality measurement", Journal of Economic Theory 1988, but focused only on a poll tax). In this paper, we determine the properties of the equal sacrifice tax for a wide class of rank-dependent social welfare functions, and integrate the theory with that already available for the class of utilitarian social welfare functions. In an additional step, we analyze the equal sacrifice tax for a class of mixed utilitarian and rank-dependent social welfare functions, and finally we review what this synthesis has achieved. |
| Keywords: | equal sacrifice, income tax, inequality |
| JEL: | D63 H22 H23 |
| Date: | 2006–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ore:uoecwp:2006-4&r=pub |
| By: | Roger Gordon; Martin Dietz |
| Abstract: | How do dividend taxes affect firm behavior and what are their distributional and efficiency effects? To answer these questions, the first problem is coming up with an explanation for why firms pay dividends, in spite of their tax penalty. This paper surveys three different models for why firms pay dividends, and then uses each model to examine the behavioral and efficiency effects of dividend taxes. The three models examined are: the “new view,” an agency cost explanation, and a signaling model. While all three models forecast dividends, their forecasts regarding other firm behavior, and their forecasts for the efficiency and distributional effects of a dividend tax, often differ. Given the evidence to date, we find the agency model is the one most consistent with the data. |
| JEL: | H25 G35 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12292&r=pub |