nep-pub New Economics Papers
on Public Finance
Issue of 2018‒01‒29
four papers chosen by

  1. Further Results on the Inequality Reducing Properties of Income Tax Schedules By Oriol Carbonell-Nicolau; Humberto Llavador
  2. Taxes and Turnout By Felix Bierbrauer; Aleh Tsyvinski; Nicolas D. Werquin
  3. Endogenous Private Leadership under Subsidy Policy on the Social Enterprises By Cho, Sumi; Lee, Sang-Ho
  4. Business Tax Burdens in Canada’s Major Cities: The 2017 Report Card By Adam Found; Peter Tomlinson

  1. By: Oriol Carbonell-Nicolau (Rutgers University); Humberto Llavador (Universitat Pompeu Fabra and Barcelona GSE)
    Abstract: Carbonell-Nicolau and Llavador (forthcoming) extend the classic result of Jakobsson (1976) and Fellman (1976)—according to which average-rate progressive, and only average-rate progressive income taxes, reduce income inequality—to the case of endogenous income. There it is shown that marginal-rate progressivity—in the sense of increasing marginal tax rates on income—is necessary for tax structures to be inequality reducing, and necessary and sufficient conditions on the social utility function are identified under which progressive and only progressive taxes are inequality reducing. This paper takes a further step and furnishes conditions on primitives under which various subclasses of progressive taxes are inequality reducing. The main results in CarbonellNicolau and Llavador (forthcoming) are obtained as particular cases of the more general framework presented here. Restricting the set of taxes allows for larger classes of preferences consistent with inequality reducing income taxation. As an illustration of the results’ practical implications, we provide a precise characterization of the subclass of (progressive) taxes that are inequality reducing for some standard families of preferences.
    Keywords: progressive taxation, income inequality, incentive effects of taxation
    JEL: D63 D71
    Date: 2018–01–16
  2. By: Felix Bierbrauer; Aleh Tsyvinski; Nicolas D. Werquin
    Abstract: We develop a model of political competition with endogenous turnout and endogenous platforms. Parties face a trade-off between maximizing their base and getting their supporters out to vote. We study the implications of this framework for non-linear income taxation. In equilibrium, both parties propose the same tax policy. This equilibrium policy is a weighted combination of two terms, one reflecting the parties’ payoff from mobilizing their own supporters, one reflecting the payoff from demobilizing the supporters of the other party. The key determinant of the equilibrium policy is the distribution of the voters’ party attachments rather than their propensity to swing vote. Our analysis also provides a novel explanation for why even left-leaning parties may not propose high taxes on the rich.
    JEL: D72 D82 H21
    Date: 2017–12
  3. By: Cho, Sumi; Lee, Sang-Ho
    Abstract: We investigate a mixed oligopoly model in which private enterprises compete with social enterprises under government subsidy policy, and examine the endogenous choice of private leadership. We show that private leadership is socially desirable, but the numbers of private and social enterprises affect endogenous choices and welfare consequences. We also show that the role of government in choosing the optimal subsidy will be significant when there are more than one private enterprises but its number is smaller than that of the social enterprises.
    Keywords: Social Enterprise; Private Enterprise; Private Leadership; Private Followership; Subsidization;
    JEL: D43 H23 L13 L22 L31
    Date: 2017–12–22
  4. By: Adam Found (Trent University); Peter Tomlinson (University of Toronto)
    Abstract: The best and worst major cities for business investment are identified in a new report from the C.D. Howe Institute. In “Business Tax Burdens in Canada’s Major Cities: The 2017 Report Card” authors Adam Found and Peter Tomlinson compare business tax burdens in 10 Canadian cities, the largest in each province.
    Keywords: Business and Capital Taxation;Business Investment;Property Taxes;Provincial Comparisons;Provincial Taxation and Budgets;Sales and Excise Taxes;Urban Issues;Value Added Taxes
    JEL: H25 H71
    Date: 2017–12

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.