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on Public Finance |
| By: | Kroft, Kory (University of Toronto); Kucko, Kavan (Boston University); Lehmann, Etienne (CRED, Université Panthéon Assas Paris 2); Schmieder, Johannes F. (Boston University) |
| Abstract: | We derive a sufficient statistics optimal tax formula in a general model that incorporates unemployment and endogenous wages, to study the shape of the tax and transfer system at the bottom of the distribution. The sufficient statistics are the macro employment response to taxation and the micro and macro participation responses. We estimate these statistics using policy variation from the U.S. tax and transfer system. Our results suggest that the optimal tax more closely resembles a Negative Income Tax than an Earned Income Tax Credit relative to the case where unemployment and wage responses are not taken into account. |
| Keywords: | optimal income taxation, labor supply, labor demand |
| JEL: | H21 J22 J23 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9719&r=pub |
| By: | Christian A. L. Hilber; Teemu Lyytikainen |
| Abstract: | We estimate the effect of the UK Stamp Duty Land Tax (SDLT) – a transfer tax on the purchase price of property or land – on different types of household mobility using micro data. Exploiting a discontinuity in the tax schedule, we isolate the impact of the tax from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate jumps from 1 to 3 percent. We find that a higher SDLT has a strong negative impact on housing-related and short distance moves but does not adversely affect job-induced or long distance mobility. our results suggest that transfer taxes may mainly distort housing rather than labor markets. |
| Keywords: | transfer taxes; stamp duty; transaction costs; homeownership; household mobility |
| JEL: | D23 H21 H27 J61 R21 R31 R38 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65022&r=pub |
| By: | Tomoyuki Nakajima (Institute of Economic Research, Kyoto University); Shuhei Takahashi (Institute of Economic Research, Kyoto University) |
| Abstract: | We analyze lump-sum transfers nanced through consumption taxes in a heterogeneous-agent model with uninsured idiosyncratic wage risk and endogenous labor supply. The model is calibrated to the U.S. econ- omy. We nd that consumption inequality and uncertainty decrease with transfers much more substantially under divisible than indivisible labor. Increasing transfers by raising the consumption tax rate from 5% to 35% decreases the consumption Gini by 0.04 under divisible labor, whereas it has almost no e¤ect on the consumption Gini under indivis- ible labor. The divisibility of labor also a¤ects the relationship among consumption-tax nanced transfers, aggregate saving, and the wealth distribution. |
| Keywords: | Transfers, consumption taxes, consumption inequality and uncertainty, the divisibility of labor, incomplete markets |
| JEL: | E62 H63 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:933&r=pub |
| By: | Feld, Lars P.; Ruf, Martin; Schreiber, Ulrich; Todtenhaupt, Maximilian; Voget, Johannes |
| Abstract: | Taxing capital gains is an important obstacle to the efficient allocation of resources because it imposes a transaction cost on the vendor which locks in appreciated assets by raising the vendor's reservation price in prospective transactions. For M&As, this effect has been intensively studied with regard to shareholder taxation, whereas empirical evidence on the effect of capital gains taxes paid by corporations is scarce. This paper analyzes how corporate level taxation of capital gains affects inter-corporate M&As. Studying several substantial tax reforms in a panel of 30 countries for the period of 2002-2013, we identify a significant lock-in effect. Results from estimating a Poisson pseudo-maximum-likelihood (PPML) model suggest that a one percentage point decrease in the corporate capital gains tax rate would raise both the number and the total deal value of acquisitions by about 1.1% per year. We use this result to estimate an efficiency loss resulting from corporate capital gains taxation of 3-06 bn USD per year in the United States. |
| Keywords: | corporate taxation,M&A,capital gains tax,lock-in effect |
| JEL: | H25 G34 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16007&r=pub |
| By: | Richard Dutu |
| Abstract: | Despite having low government spending, Switzerland scores highly in various public policy outcomes, including health, education and transportation. But, as the population grows and ages, efficiency of public spending will have to rise to maintain low tax rates. Given its high returns, the provision of early childhood education and care should be boosted, especially for children from disadvantaged socio-economic backgrounds, including those from immigrant families. Cantons should avoid oversupplying baccalaureates, thereby lowering university dropout rates. Policies will also need to adapt to structural changes in the labour market, by boosting the supply and attractiveness of fields of study that are facing high demand on the labour market, and by further clarifying study streams across tertiary education. Health-care efficiency could be raised by further developing managed-care networks. Enforcing systematic data collection for the quality of care would also help patients and providers make better informed choices. Generic drugs’ prices are too high due to a poorly designed price-fixing mechanism. Transportation suffers from congestion that could be reduced by implementing peak-load pricing on roads and trains. But efficiency in public spending is also about allocating public funds optimally. Switzerland’s rapidly rising social security entitlements and its fiscal equalisation system constrain public spending and risk crowding out important expenditures. Fast-rising social security entitlements could be addressed via indexing the retirement age to life expectancy. Fiscal equalisation weakens tax-raising incentives for some cantons; this could be addressed by allowing them to keep a larger part of their increased revenues. Efficiency in allocating public expenditure could also be raised by increasing the share of public spending allocated by tender and harmonising procurement regulations across all levels of government. This Working Paper relates to the 2015 OECD Economic Review of Switzerland (http://www.oecd.org/eco/surveys/economic-survey-switzerland.htm) Accroître l'Efficience des Dépenses Publiques en Suisse Malgré un volume de dépenses publiques faible, la Suisse obtient de très bons résultats dans de nombreux domaines de la politique publique, dont la santé, l’éducation et le transport. Toutefois, compte tenu de la croissance démographique et du vieillissement de la population, l’efficience des dépenses publiques devra être renforcée pour conserver des taux d’imposition bas. Compte tenu de ses effets très positifs, l’offre de structures d’éducation et d’accueil des jeunes enfants devrait être accrue, notamment pour les enfants issus de milieux socio-économiques défavorisés, comme les enfants d’immigrés. Les cantons devraient éviter une situation d’excès de bacheliers, afin de réduire les taux de décrochage universitaire. Les politiques devront aussi s’adapter aux changements structurels sur le marché du travail en améliorant l’offre et l’attractivité des domaines d’études qui suscitent une forte demande sur le marché de l’emploi, et en simplifiant encore les filières dans l’enseignement supérieur. Dans la santé, le développement des réseaux de soins intégrés pourrait renforcer l’efficience. Le recueil systématique de données sur la qualité des soins aiderait aussi patients et prestataires à faire des choix mieux informés. Les prix des médicaments génériques sont trop élevés en raison d’un mécanisme de fixation des prix mal conçu. Dans les transports, la congestion pourrait être réduite en adoptant une tarification de période de pointe sur les routes et les rails. Mais l’efficience des dépenses publiques a aussi trait à la répartition optimale des deniers publics. Les droits à prestations de sécurité sociale qui augmentent rapidement en Suisse et le système de péréquation budgétaire contraignent les dépenses publiques et risquent de supplanter des catégories de dépenses importantes. L’indexation de l’âge de la retraite sur l’espérance de vie pourrait permettre de faire face à l’augmentation rapide des droits à prestations de sécurité sociale. La péréquation budgétaire incite moins certains cantons à collecter les impôts. Pour remédier à cette situation, ils pourraient être autorisés à conserver une part plus importante de leurs recettes supplémentaires. La répartition des dépenses publiques pourrait aussi devenir plus efficiente en augmentant le pourcentage des marchés publics alloués par appels d’offres et en harmonisant les procédures de passation de marché à tous les niveaux de l’administration. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Suisse 2015 (http://www.oecd.org/fr/eco/etudes/etude -economique-suisse.htm). |
| Keywords: | education, health care, public spending, fiscal equalisation, efficiency, dépense publique, santé, efficience, éducation |
| JEL: | H11 H51 H52 H55 H57 H77 |
| Date: | 2016–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1280-en&r=pub |
| By: | Börjesson, Maria (CTS); Fung, Chau Man (Katholieke Universiteit Leuven); Proost , Stef (Katholieke Universiteit Leuven) |
| Abstract: | Many public transport services are heavily subsidized. One of the main justifications of this is the expected beneficial effect on road congestion. Stockholm introduced congestion pricing in 2006 and the effects on car and public transport demand were carefully monitored. This change in prices provides unique estimates on price- and cross-price elasticities. This paper uses these data to model the optimal pricing, frequency, bus size and number of bus lanes for a corridor in the presence of congestion pricing of cars. Results show that the subsidies for peak bus trips are indeed too high. However, the major welfare benefits of the reform are due to a decrease in frequencies during the off-peak period and the use of larger buses. |
| Keywords: | Public transport; Bus fares; Bus lanes; Bus frequency; Subsidies; Congestion pricing |
| JEL: | D61 H54 R41 R48 |
| Date: | 2016–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2015_019&r=pub |