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on Public Finance |
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Issue of 2011‒01‒16
three papers chosen by |
| By: | Ellen R. McGrattan |
| Abstract: | Previous studies of the U.S. Great Depression find that increased taxation contributed little to either the dramatic downturn or the slow recovery. These studies include only one type of capital taxation: a business profits tax. The contribution is much greater when the analysis includes other types of capital taxes. A general equilibrium model extended to include taxes on dividends, property, capital stock, and excess and undistributed profits predicts patterns of output, investment, and hours worked more like those in the 1930s than found in earlier studies. The greatest effects come from the increased tax on corporate dividends. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:451&r=pub |
| By: | Kim Scharf; Sarah Smith |
| Abstract: | This paper uses a survey-based approach to test alternative methods of channeling tax relief to donors – as a tax rebate for the donor or as a matched payment to the receiving charity. On accounting grounds these two are equivalent but, in line with earlier experimental studies, we find that gross donations are significantly more responsive to a match change than to a rebate change. We show that the difference can largely be explained by the fact that a majority of donors do not adjust their nominal donations in response to a change in subsidy. This evidence adds to the growing empirical literature suggesting that consumers may not react to tax changes. In the case of tax subsidies for donations, this has implications for policy design – we show for the UK that a match-based system is likely to be more effective at increasing the total amount of money going to charities. |
| Keywords: | charitable giving, tax subsidies, price elasticity |
| JEL: | C99 D12 D64 H24 H31 H41 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:10/247&r=pub |
| By: | Patrizio Lecca (Department of Economics, Strathclyde University); Peter McGregor (Fraser of Allander Institute, Strathclyde University); Kim Swales (Department of Economics, Strathclyde University) |
| Abstract: | This paper investigates the impact of a balanced budget fiscal policy expansion in a regional context within a numerical dynamic general equilibrium model. We take Scotland as an example where, recently, there has been extensive debate on greater fiscal autonomy. In response to a balanced budget fiscal expansion the model suggests that: an increase in current government purchase in goods and services has negative multiplier effects only if the elasticity of substitution between private and public consumption is high enough to move downward the marginal utility of private consumers; public capital expenditure crowds in consumption and investment even with a high level of congestion; but crowding out effects might arise in the short-run if agents are myopic. |
| Keywords: | regional computable general equilibrium analysis, fiscal federalism, fiscal policy. |
| JEL: | H72 R13 R50 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1020&r=pub |