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on Public Finance |
| By: | Bargain, Olivier (University College Dublin); Dolls, Mathias (University of Cologne); Immervoll, Herwig (World Bank); Neumann, Dirk (University of Cologne); Peichl, Andreas (IZA); Pestel, Nico (IZA); Siegloch, Sebastian (IZA) |
| Abstract: | We assess the effects of U.S. tax policy reforms on inequality by applying a new decomposition method that allows us to disentangle mechanical effects due to changes in pre-tax incomes from direct effects of policy reforms. While tax reforms implemented under Democrat administrations, in particular the EITC reforms in the 1990s and the ARRA in 2009, had an equalizing effect at the lower half of the distribution, the disequalizing effects of Republican reforms are due to tax cuts for high-income families. As a consequence of partisan politics, overall policy effects almost cancel out over the whole time period. |
| Keywords: | tax policy, inequality, redistribution, political economy, Great Recession |
| JEL: | H23 H31 H53 P16 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5910&r=pub |
| By: | Jacob, Martin (Uppsala Center for Fiscal Studies) |
| Abstract: | This paper analyzes the effects of progressive versus proportional taxation on capital gains realization behavior. Using a comprehensive panel of over 230,000 individuals in Sweden for 1973-1996, this paper shows after progressive capital gains taxes were cut from over 80% in the 1980s to a proportional tax rate of 30% in 1991, especially high-income taxpayers increased capital gains realizations. The reaction to the introduction of the proportional capital gains tax rate is more pronounced among younger individuals. This paper also shows that under a progressive (proportional) tax regime, investors with excess income are less (more) likely to realize capital gains than individuals with liquidity constraints. Hence, proportional versus progressive taxation plays an important role in capital gains realizations of private investors. |
| Keywords: | Capital Gains Tax; Proportional Tax; Progressive Tax; Top Incomes; Life-Cycle |
| JEL: | D14 D31 H20 H24 |
| Date: | 2011–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uufswp:2011_009&r=pub |
| By: | Qian Wang (School of Public & Environmental Affairs (SPEA) Indiana University Bloomington); Chunli Shen (Central University of Finance and Economics); Heng-fu Zou (Shenzhen University, Wuhan University and Central University of Finance and Economics) |
| Abstract: | This paper aims to enhance the understanding of provincial tax performance in China, paying special attention to the recent fiscal reforms in the 1980s and in 1994. Using provincial panel data for the period 1986-2004, our analysis consists of two steps. First, a combined fixed time effects and random provincial effects model is used to analyze the statistical relationship between the tax share in GDP and economic and demographic variables. Results indicate that the decentralized fiscal system over the period 1986¨C1993 has had a positive impact on the tax share in GDP, whereas the recentralized fiscal system in the period 1994-2004 has had a negative impact. Second, provincial tax effort indices are calculated to estimate potential room for additional taxation. The findings from the analysis have important policy implications on the redistribution of fiscal resources as well as on the effectiveness of the tax administration. |
| Keywords: | Tax effort, Tax capacity, Fiscal reforms, Fiscal decentralization |
| JEL: | H20 H71 C23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:483&r=pub |