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on Public Finance |
| By: | William B. Peterman |
| Abstract: | This paper considers the impact of endogenous human capital accumulation on optimal tax policy in a life cycle model. Including endogenous human capital accumulation, either through learning-by-doing or learning-or-doing, is analytically shown to create a motive for the government to use age-dependent labor income taxes. If the government cannot condition taxes on age, then it is optimal to use a tax on capital in order to mimic such taxes. Quantitatively, introducing learning-by-doing or learning-or-doing increases the optimal tax on capital by forty or four percent, respectively. Overall, the optimal tax on capital is thirty five percent higher in the model with learning-by-doing compared to the model with learning-or-doing implying that how human capital accumulates is of significant importance when determining the optimal tax policy. |
| Keywords: | Capital ; Human capital ; Taxation |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2012-03&r=pub |
| By: | Bach, Stefan; Corneo, Giacomo; Steiner, Viktor |
| Abstract: | This paper provides formulas for optimal top marginal tax rates when couples are taxed according to income splitting between spouses, consumption is taxed, and the skill distribution is unbounded. Optimal top marginal income tax rates are computed for Germany using a dataset that includes the tax returns of all German top taxpayers. We find that the optimal top marginal tax rate converges to about 2/3 and convergence obtains at income levels that are substantially higher than those currently subject to the actual top tax rate. -- |
| Keywords: | optimal income taxation,top incomes,German income tax |
| JEL: | D31 D72 H23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201121&r=pub |
| By: | Ilpo Kauppinen (Ifo Institute); Panu Poutvaara (University of Munich and Ifo Institute) |
| Abstract: | This paper studies attitudes towards income redistribution in the country of origin among those who stay in a welfare state, and those who emigrate. We find a striking gender difference among Danish emigrants. Majority of men opposes increasing income redistribution, while majority of women supports it. Women are somewhat more positive towards redistribution also in Denmark, but the gender difference is much smaller. We study to what extent differences in attitudes towards redistribution are driven by beliefs about the determinants of individual success, generalized trust, assimilation to the new home country, and self-selection of emigrants to the United States and other destinations. We do not find evidence of assimilation to political values prevalent in the new home country. |
| Keywords: | Migration; Emigration; Welfare state; Redistribution; Political preferences |
| JEL: | F22 J61 H2 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012009&r=pub |
| By: | Manel Antelo (Universidad de Santiago de Compostela) |
| Abstract: | In this paper the behavior of a tax-collecting government (a tax office) when imposing a quantity-tax to firms is analyzed along a two-period signaling model. Each taxpayer privately knows its technological attributes, while third parties—the tax office among them—have only a prior belief about this fact, so firms can be tempted to behave opportunistically. In monopoly, signaling is always costly in terms of output deviation and the tax office reacts by setting, a smaller tax in (asymmetric information) period 1 than it would under symmetric information. In oligopoly, signaling can be either costly or costless. In the former case, the tax imposed by the tax office to each firm is below that imposed under symmetric information, while it is equal in the latter case. Besides, fiscal revenue under signaling is unambiguously lower than under symmetric information, even when tax size is the same in both contexts |
| Keywords: | Output-tax, tax office, asymmetric information, signaling |
| JEL: | H21 D82 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cea:doctra:e2011_03&r=pub |
| By: | Charles F. Manski |
| Abstract: | The merits of alternative income tax policies depend on the population distribution of preferences for income, leisure, and public goods. Standard theory, which supposes that persons want more income and more leisure, does not predict how they resolve the tension between these desires. Empirical studies of labor supply have been numerous but have not shed much light on the matter. A persistent problem is that empirical researchers have imposed strong preference assumptions that lack foundation. This paper examines anew the problem of inference on preferences and considers the implications for comparison of tax policies. I first perform a basic revealed-preference analysis that imposes no assumptions on the preference distribution beyond the presumption that persons prefer more income and leisure. This shows that observation of a person’s labor supply under a status quo tax policy may bound his labor supply under a proposed policy or may have no implications, depending on the shapes of the two tax schedules and the location of status quo labor supply. I next explore the identifying power of two assumptions restricting the population distribution of income-leisure preferences. One assumes that groups of persons who face different choice sets have the same distribution of preferences, while the other adds restrictions on the shape of this distribution. I then address utilitarian policy comparison with partial knowledge of preferences. Partial knowledge of preferences implies partial knowledge of the welfare function. Hence, it may not be possible to rank policies. |
| JEL: | C14 C25 H21 H24 J22 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17755&r=pub |