Effect of the Tax System ON R&D Intensity,Growth, Wages and Consumption Share

We propose a general equilibrium knowledge‐driven (semi‐)endogenous‐growth model with horizontal R&D, which is extended to consider two types of labour, skilled and unskilled, and exogenous government expenditure, financed through taxes on financial assets and on labour income, to analyse the implications of the tax system on R&D intensity, economic growth, wage inequality and consumption share in the output. In particular, we show that: (i) taxes have negative influence in the consumption share, being higher the marginal effect of the labour‐income tax; (ii) for any given government expenditure share, an increase (a decrease) in financial‐assets tax decreases (increases) the labour‐income tax; (iii) only the financial‐assets tax affects negatively the R&D intensity and the skill‐premium; thus, to reduce the skill‐premium the financial‐assets tax must increase; (iv) ignoring the effect on wage inequality and on R&D intensity, taxes are substitutes.     

Efficiency Wages and Taxes

Various taxes influence wage and employment outcomes in efficiency wage models. These findings are extended by incorporating more comprehensive tax functions and additional tax parameters. Moreover, the importance of different effort functions is evaluated. It is shown that higher marginal tax rates, holding the level of taxes constant, reduce wages and increase employment. Higher levels of taxes on income, labour costs and value-added tend to raise unemployment.     

The Distribution of Top Incomes in Five Anglo‐Saxon Countries Over the Long Run

Taking five Anglo‐Saxon countries that have relatively similar backgrounds and tax systems – Australia, Canada, New Zealand, the UK and the USA – we see that the shares of the very richest exhibit a strikingly similar pattern, falling in the three decades after World War II, before rising sharply from the mid‐1970s onwards. The share of the top 1 per cent is highly correlated across Anglo‐Saxon countries, more so than with the share of the next 4 per cent. Controlling for country and year fixed effects, we find that a reduction in the marginal tax rate on wage income is associated with an increase in the share of the top percentile group. Likewise, a fall in the marginal tax rate on investment income (based on a lagged moving average) is associated with a rise in the share of the top percentile group.     

Optimal climate and fiscal policy in an OLG economy

This paper develops a climate–economy model to study the joint design of optimal climate and fiscal policies in economies with overlapping generations (OLGs). I demonstrate how capital taxation, if optimal, drives a wedge between the market costs of carbon (the net present value of marginal damages using the market interest rate) and the Pigouvian tax (the net present value of marginal damages using the consumption discount rate of successive OLGs). In contrast to deterministic infinitely lived representative agent models, at the optimum, the capital income tax is positive, the carbon price equals the market costs of carbon but it falls short of the Pigouvian tax when (i) preferences are not separable over consumption and leisure; and (ii) labor income taxes cannot be age-dependent. I also show that restrictions on climate change policy provide a novel rationale for positive capital income taxes.     

THE BUILT-IN FLEXIBILITY OF INCOME AND CONSUMPTION TAXES IN NEW ZEALAND

This paper provides estimates of individual and aggregate revenue elasticities of income and consumption taxes in New Zealand, based on the 2001 tax structure and expenditure patterns. Using analytical expressions for revenue elasticities at the individual and aggregate levels, together with a simulated income distribution, values for New Zealand were obtained. Results using equi-proportional income changes suggest that the aggregate income and consumption tax revenue elasticities are both fairly constant as mean income increases, at around 1.3 and 0.95 respectively. This latter estimate assumes that increases in disposable income are accompanied by approximately proportional increases in total expenditure. If there is a tendency for the savings proportion to increase as disposable income increases, a somewhat lower total consumption tax revenue elasticity, of around 0.9, is obtained for 2001 income levels. However, non-equiproportional income changes are more realistic. Allowing for regression towards the geometric mean income reduces these elasticities, giving an elasticity for income and consumption taxes combined that is only slightly above unity. Examination of the tax-share weighted expenditure elasticities for various goods also revealed that, despite the adoption of a broad based GST at a uniform rate in New Zealand, the persistence of various excises has an important effect on the overall consumption tax revenue elasticity, especially for individuals at relatively low income levels.     

The growth effects of tax rates in the OECD

This paper explores the merits of macro‐ and micro‐based tax rate measures within an open economy “fiscal policy and growth” model. Using annual data for 15 OECD countries we find statistically small, non‐robust long‐run growth effects of macro‐based average tax rates on capital income and consumption, but some evidence for average labour income tax effects. Changes in “micro” marginal income tax rates at both the personal and corporate levels yield statistically robust GDP responses of modest size. Both domestic and foreign corporate taxes appear relevant. In general, tax effects on GDP operate largely via factor productivity rather than factor accumulation.     

Cross-base tax elasticity of capital gains

This paper studies the cross-base tax elasticity of capital gains realizations to labour income taxes when capital gains are taxed at a separate proportional tax rate. Using a longitudinal panel of over 265 000 individuals in Sweden, this paper shows in a regression kink design that labour income taxes affect capital gains realizations in two ways. An increase in the marginal labour income tax rate increases the likelihood of realizing capital gains and the amount of realized capital gains. One implication of this result is that labour income taxes have a lock-out effect but that the magnitude of this effect is smaller than the lock-in effect of the actual capital gains tax.     

PROGRESSIVITY AND REDISTRIBUTION IN NON‐REVENUE NEUTRAL TAX REFORMS: THE LEVEL AND DISTANCE EFFECTS

Kakwani and Reynolds–Smolensky indices are used in the literature to measure the progressivity and redistributive capacity of taxes. These indices may, however, show some limits when used to make normative assessments about non‐revenue neutral tax reforms. Two approaches have traditionally been taken to overcome this problem. The first of these consists of comparing after‐tax income distributions through generalized Lorenz (concentration) curves. The second approach is based on the decomposition of changes in the Reynolds–Smolensky index into changes in the average tax rate and variations in progressivity. Nonetheless, this decomposition between the average tax rate and progressivity may be further exploited to obtain some information that can be relevant to assess tax reforms. The main aim of this study is to draw up some indicators that can be useful to quantify the effects of non‐revenue neutral tax reforms. These indicators are used to investigate the last personal income tax reforms that have taken place in Spain.     

Optimal Dynamic Taxation with Distinctive Forms of Social Status Attainment

We examine the role of both consumption‐ and wealth‐induced social comparisons in setting dynamic optimal income taxation. Under complete information, state‐invariant labor income taxes are used to remedy the externality caused by consumption‐induced social comparisons, while state‐contingent capital income taxes are used to remedy the externalities caused by both consumption‐ and wealth‐induced social comparisons. Under incomplete information, distinct types of agents are subject to an identical marginal capital income tax, which removes social comparisons. To solve the information problem, low‐productivity agents could be subject to a lower marginal labor tax than high‐productivity agents, which contradicts the traditional result in the Mirrlees–Stiglitz models.     

Behavioral Effects of Withholding Taxes on Labor Supply*

In most advanced economies, income tax collection uses third‐party withholding for wage income. Because withholding taxes do not necessarily reflect true effective taxes, these may give false signals of net‐of‐tax pay. We test labor supply responses to such misconceptions using laboratory experiments. Withholding taxes (and the resulting tax refunds) should be behaviorally neutral, but our results show that tax adjustments lead to effort adjustments, which suggests that withholding blurs tax incentives. While there is no statistically significant response in the overall sample, the participants in the subgroup who self‐assess to be motivated by monetary incentives (about half of the total sample) reduce their effort in response to withholding taxes and increase their effort after receiving tax refunds.     

间接税归宿对城乡居民收入分配影响研究

使用全国城乡家庭消费和收入微观数据考察间接税对于城乡收入差距和收入分配的影响发现:平均来看,全国居民负担的税收占收入的比例是10.6%;不论在全国范围来看还是分别在城乡内部来看,间接税负担都呈现累退:低收入的负担率高于高收入的负担率。在城乡之间,城镇居民的税收负担率高于农村居民的税收负担率。间接税增加了城乡内部不平等,降低了城乡之间的不平等。间接税主要对低收入群体影响较大,略微恶化了整体收入不平等。     

Optimal non-linear income taxation for reduction of envy

This paper examines the optimal non-linear income taxation problem based on λ-equitability. An allocation is λ-equitable if no agent envies a proportion λ of the bundle of any other agent. We examine the properties of Pareto undominated allocations for various λ-equitability requirements. When there is one output, the marginal income tax rate can increase only if leisure is a luxury. In a multi-commodity model with commodity taxes, the goods preferred by the low skilled agent and/or those with high Hicksian elasticities are taxed more heavily. When preferences exhibit quasi-linearity, we can show that the introduction of the λ-equitability constraint increases the marginal income tax rates of the entire population.     

间接税归宿对城乡居民收入分配影响研究

使用全国城乡家庭消费和收入微观数据考察间接税对于城乡收入差距和收入分配的影响发现:平均来看,全国居民负担的税收占收入的比例是10.6%;不论在全国范围来看还是分别在城乡内部来看,间接税负担都呈现累退:低收入的负担率高于高收入的负担率。在城乡之间,城镇居民的税收负担率高于农村居民的税收负担率。间接税增加了城乡内部不平等,降低了城乡之间的不平等。间接税主要对低收入群体影响较大,略微恶化了整体收入不平等。     

A many-person Ramsey tax rule

Define the social marginal utility of an individual's income as the gain to society of a unit of consumption by the individual plus the value of his marginal propensity to pay taxes out of income. This concept rather than the social marginal utility of consumption (equal to the first term above) seems helpful in understanding optimal tax first order conditions. For example, with many consumers (and a poll tax as well as excise taxes) the change in aggregate compensated quantity demanded is proportional to the covariance between individual quantities demanded and social marginal utilities of income.     

TAXES, GROWTH AND THE CURRENT ACCOUNT TICK-CURVE EFFECT

This paper examines the dynamic and long run effects of a shift from income taxes to consumption taxes in a growing small open economy. We introduce a government sector that maintains a balanced budget and expenditure at a constant proportion of domestic income to a small open economy Swan-Solow model. Our framework provides a previously unidentified dynamic effect that is robust to endogenising the savings rate. Lowering the income tax rate promotes economic growth and has a tick-curve effect on the current account balance, characterised by instantaneous deterioration, a period of recovery and gradual convergence to an improved position in the long run.     

地方税收效率及公平性实证研究

在现行经济及税收制度下,增值税和行为税收入比重提升会提高资本要素的产出效率;营业税和企业所得税比重的增加在提高资本要素产出效率的同时,却会降低劳动要素的产出效率;个人所得税和财产税比重提高有助于提升劳动要素的产出效率,而后者同时会降低资本产出效率;资源税类收入比重提高将会降低资本要素产出效率;流转税、所得税、行为税和财产税占税收收入比重的增加都会引起经济的总体产出的减少;我国地方税收收入具有显著的公平效应,其中所得税和财产税的公平效应相对更强,资源税及增值税也具有明显的公平收入分配的作用。     

Understanding domestic savings: an empirical approach

ABSTRACT

There are two unusual and important features in the evolution of the savings rate in Chile. First, the economy increased the average savings rate by 11 percentage points in the period 1985–2013 compared to 1960–1984, mainly due to a large change in private savings rate (10 percentage points), and an additional 1 percentage point from the public sector. The second feature is related to the change in the composition of private savings. After several years of nearly no corporate savings, this component became an important part of total savings reaching an average of almost 10% of Gross National Disposable Income (GNDI) during the period 1986–2012. Our results show that the 1984 tax reform, the boost in the marginal productivity of capital and the deepening of the financial market were the main drivers that explain the dramatic increase in corporate savings. We also found that the reduction in personal income tax after the tax reform and the higher income per capita growth helped to explain the increase in household savings, while the structural balance rule helped to explain the increase in public savings.     

中国的税收结构、经济增长与收入分配

本文通过实证分析,说明在中国现阶段的经济制度和税收结构下,流转税类、所得税类、资源税类和财产税类份额的增加会扩大资本所有者和劳动所有者市场收入的分配差距,而特定目的税类和行为税类份额的增加则会缩小资本要素与劳动要素的收入分配差距。同时,所得税类、资源税类和行为税类份额的增加会提高经济的总体规模,而财产税类和特定目的税类份额的增加则会降低经济的总体规模。这说明在现阶段的中国经济中,有必要对所得税类和财产税类进行结构和职能两方面改革,使这两种税能够体现社会公平的税收职能。单纯地从税收结构的数量调整上讲,目前应提高所得税类的税收份额,并降低财产税类(即房地产税)的税收份额。     

ASSESSING THE WELFARE IMPACT OF TAX REFORM: A CASE STUDY OF THE 2001 U.S. TAX CUT

This paper implements a relatively simple methodological approach to estimate the impact on family welfare of a specific tax reform. The measured impact can differ greatly from simple marginal tax rate comparisons, and conclusions about the distribution of the welfare impact can vary depending on the basis of comparison. For example, absolute welfare gains from the 2001 U.S. tax reform were concentrated among the highest and lowest income families, whereas welfare gains measured as a share of pre‐tax income are found to be nearly monotonically declining in income.