nep-pub New Economics Papers
on Public Finance
Issue of 2015‒12‒12
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Financial Repression and Laffer Curves By Kanat S. Isakov; Sergey E. Pekarski
  2. Parking Taxes as a Second Best Congestion Pricing Mechanism By Riley Wilson; Sebastián J. Miller
  3. Tax policy in Latin America: Assessment and guidelines for a second generation of reforms By Gómez Sabaini, Juan Carlos; Morán, Dalmiro

  1. By: Kanat S. Isakov (National Research University Higher School of Economics); Sergey E. Pekarski (National Research University Higher School of Economics)
    Abstract: This paper uses a simple calibrated general equilibrium model to evaluate the revenue from financial repression and its impact on Laffer curves for consumption, capital and labor taxes. By imposing a requirement for households to hold public debt with a below-market rate of return the government distorts optimal household allocation and raises extra revenues. Tighter financial repression shifts Laffer curves for labor and consumption down, but increases revenue from capital income taxation. Total budget revenue increases, which allow financing more public goods and can be welfare-improving
    Keywords: financial repression; tax distortions; Laffer curve.
    JEL: E62 G28 H21 H24 H31 H63
    Date: 2015
  2. By: Riley Wilson; Sebastián J. Miller
    Abstract: Growing vehicle use and congestion externalities have led many to consider alternative congestion pricing mechanisms, as road pricing often has high infrastructural costs and faces public opposition. This paper explores the role of parking taxation in reducing congestion by considering a natural experiment created by the progressive January 1, 2012 Chicago parking tax increase. Exploiting differences in vehicle use across income groups, it is estimated that the approximately $2 a day parking tax increase led to a 4-6 percent reduction in total vehicle trips in high-income areas, with the largest response seen on roads more heavily used by commuters. Also found are corresponding increases in use of public transit and a 3. 1 percent aggregate reduction in vehicle trips. It is concluded that parking taxes can help mitigate congestion externalities, although they are no more than about half as effective as more efficient congestion tolls.
    Keywords: Taxation, Income, Consumption & Saving, Wages, Development Banks, Congestion, Second-best pricing, Traffic, Parking, Parking tax, Parking demand, IDB-WP-614
    Date: 2015–10
  3. By: Gómez Sabaini, Juan Carlos; Morán, Dalmiro (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: In recent years, the countries of Latin America have introduced a series of reforms aimed at strengthening and modernizing their tax systems. While the reforms are part of an ongoing process carried over from earlier periods, the objectives pursued place a renewed emphasis on distribution issues, in clear contrast with the spirit of the tax reforms implemented in the region in the 1980s and 1990s. This paper identifies the stylized facts that have characterized Latin American tax systems over the past two decades. Although there is a lot of heterogeneity among countries, the tax burden has increased in almost all cases, and the tax structure has, on average, become more concentrated on the value added tax and the income tax. Nevertheless, certain structural weaknesses have been maintained over time, such as the bias in favour of indirect taxation and the low weight of personal income taxes, which determines the low redistributive impact of taxation at the regional level. Moreover, the high degree of informality, the high level of tax expenditures (or concessions) and the unacceptable levels of tax evasion hinder the consolidation of tax systems based on sufficiency, equity, and efficiency. As the objectives of tax policy expand beyond the merely fiscal, as has been the case in some recent experiences, it is becoming increasingly important to establish new guidelines for tax reform in the countries of the region.
    Date: 2014–06

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