The Elasticity of Taxable Income during the 1990s: New Estimates and Sensitivity Analyses

Over the past two decades, the elasticity of taxable income has emerged as the central parameter for assessing efficiency and revenue implications from changes to tax policy. This article estimates short‐ and longer‐run responses of taxable (and gross) income to changes in tax rates using panels of U.S. tax returns for the 1990s. With the richest set of income controls, income—weighted elasticity estimates range from 0.19 to 0.33, depending on whether responses are measured over one‐ or three‐year intervals. An alternative approach designed to capture delayed and anticipatory responses yields much larger estimates—ranging from 0.43 over the short term and from 0.78 to 1.46 over the longer term. A continuing obstacle to identification encountered here is that the income controls most likely to control for mean reversion and divergence within the income distribution are also the most likely to absorb independent variation in tax rates, also needed for identification.     

The Tax Effect on Taxable Income from Privately Held Businesses

The implications of the tax elasticity of taxable income have been widely discussed in the literature. This study uses the reported rate of return to capture the effects of tax changes on taxable income from privately held businesses. Households' decisions concerning reporting rates of return are embedded in a selection model of business investment decisions. With 1983-1989 Survey of Consumer Finances panel data, the tax elasticity of the reported rates of return on privately held businesses is found to be positive and large. The tax elasticity of taxable income from privately held businesses is thus crucial for policy evaluation. Several reasons for the high tax elasticity and the implications of it are also discussed.     

The Impact of Marginal Tax Rates on Taxable Income: Evidence from State Income Tax Differentials

The relationship between marginal tax rates and taxable income is analyzed with a large cross section of income tax returns filed by individuals who face different marginal tax rates because of state income tax differentials. The empirical results suggest that an increase in the marginal tax rate reduces taxable income primarily because taxpayers claim larger deductions. High-income taxpayers are found to be more responsive to tax rate changes than lower-income individuals. The findings are compared to those of other recent studies incorporating a wider range of taxpayer responses to tax rate changes than considered in this study.     

Top wage incomes in Japan, 1951–2005

Using wage income tax statistics, we construct continuous series of upper wage income shares in Japan from 1951 to 2005 to document the evolution of top wage incomes and investigate their long-run determinants. We find that, while the middle wage income class gained enormously both in absolute and relative terms during the period of high economic growth, the upper wage income class faired comparatively better after 1975. In particular, the shares of total wage accruing to the top 1% wage earners and above have risen steadily since the late 1990s. A simple time-series regression analysis indicates that marginal income tax rates, corporate performance, female labor force participation, and labor disputes are important determinants of top wage income shares in post-WWII Japan. Although not conclusive, our results suggest that much of the recent gains in wage income shares at the top can be explained by the changes in these four factors, placing a less emphasis on a story of structural change.     

世界经济新格局与中国经济长期增长前景

中国各行业企业资本边际收益率普遍下降,意味着中国宏观经济增速下行已成为必然趋势。实际上,这标志着中国在完成基本工业化后开始从高速增长阶段进入中低速增长阶段,这也是国际发达经济体和东亚新兴经济体都遵循的发展规律。面对经济增长的趋势性变化,货币政策对经济增长的刺激作用是非常有限的,大量超发货币只会加剧信贷泡沫、增加企业尝债能力的系统性风险。当前经济的核心问题在于宏观税赋过高和企业盈利能力不足,因此,最重要的财政政策应该是实施总量减税而不仅是结构性减税,尤其是对中小企业减税减赋,才能增加就业,提高居民消费比例,转变经济增长方式。     

The effects of casino gambling on state tax revenue

A theoretical model of state tax structure implies that revenue enhancement due to the introduction of casino gambling is less likely in states where incomes taxes do not exist and where casino tax rates are lower than the corresponding tax rates on sales taxable and excise taxable goods. Further, it is clear that casino gambling is likely to adversely impact lottery tax revenues earmarked for education. Due to the cross-price effects of gambling, tax revenues will likely decline in states that introduce nontaxable casino gambling on Indian reservations. In the longer term, as casino gambling proliferates increasing competition among states, there will be negative revenue consequences due to fewer tourism and employment dollars.     

Consumption externalities,market imperfections and optimal taxation

In a dynamic model with a keeping‐up‐with‐the Joneses preference and market imperfections, we attempt to investigate under what circumstances and for what reason the optimal tax should be state‐varying. We extend the Ljungqvist and Uhlig (2000) proposition to include preferences that exhibit non‐homotheticity. We show that a keeping‐up‐with‐the‐Joneses preference (a non‐intertemporally‐dependent preference) can lead the social planner to commit to a state‐contingent tax on labor income. Moreover, the optimal labor income tax can be either procyclical or countercyclical with respect to economic fluctuations, this crucially depending on whether the level of contemporaneous consumption increases or decreases the wedge between the intertemporal substitution elasticity of households and of the social planner.     

Tax policy implications for a two‐engine growing economy

In an endogenous growth model with two engines of R&D and capital, we investigate the environment of “inclusive growth” for tax reallocations (tax increases or tax credits) to gain broader benefits in terms of promoting the overall GDP growth without an increase in income inequality. Our results show that a tax increase in the capital‐good sector can result in inclusive growth, boosting overall growth and reducing income inequality, provided that the status quo tax rate is not too high. Surprisingly, tax credits are not able to achieve such inclusive growth. While the GDP growth rises, a tax credit in the R&D sector not only increases income inequality but also decreases the aggregate employment, if the labor mobility cost between the final‐good and R&D/capital‐good sectors is relatively low. This provides a caution to policymakers given the fact that research tax credits have served as a common incentive to strengthen the R&D environment.     

长期股权投资权益法核算下会计与税法的差异

由于我国实行的是税会分离模式,因此税法上在确定应纳税所得额和会计在确认利润的时候,二者之间必然有很多的差异,既有永久性的差异也有时间性的差异,长期股权投资权益法导致的差异比较难以把握,因为当会计对长期股权投资采用权益法核算的情况下从取得长期股权投资到最后的处置每一个环节都存在会计处理和税法规定不相一致的地方。     

论对非法所得课税的法律规制

能否对非法收入征税是一个在世界范围内都颇受关注的问题。目前,除英国等少数国家外,美国、德国等大多数国家都认为应当对非法收入征税。我国对此问题仍然没有形成统一的看法,但目前多数学者都认为应当对非法收入征税,笔者对此也持肯定态度。因此,该论文对非法所得课税问题进行了理论上的分析,并在借鉴国外经验的基础上提出了对我国非法所得课税的立法建议。     

The Feldstein-Horioka puzzle: The IS-LM model with optimal policy

The high correlations between saving and investment, which suggest a small variability of the current account, is explored within an IS-LM framework. While Feldstein and Horioka interpret this evidence to imply a low degree of capital mobility, the pattern of shocks to the model is also important. If the monetary authorities are pegging domestic rates to foreign returns, then we would expect the Feldstein-Horioka evidence even under high mobility. We explore whether such a rule is optimal when policymakers wish to avoid income variability where fiscal and monetary policy are coordinated and where monetary policy must act alone. We suggest that the Voicker Federal Reserve switched to the latter stance and created a dramatic exception to the Feldstein-Horioka paradox.     

Abstracts/Résumés

This paper examines whether credit analysts utilize the information contained in the difference between book and taxable income in analyzing a firm’s credit risk. Increased book–tax differences may be informative for credit rating agencies as they may signal decreased earnings quality or changes in the firm’s off–balance sheet financing. Results suggest a significant negative association between positive changes in book–tax differences and ratings changes. This evidence is consistent with large positive changes in book–tax differences signaling decreased earnings quality and/or increased off–balance sheet financing. We also find that large negative changes in book–tax differences result in less favorable rating changes, consistent with these changes signaling decreased earnings quality. In additional analyses, we find that the association between changes in book–tax differences and rating changes is attenuated for high–tax‐planning firms (e.g., where book–tax differences more likely reflect tax planning than decreased earnings quality).     

Economic studies of taxation in Japan: The case of personal income taxes

We argue that tax policy in Japan is on a shaky empirical ground. First, until recently, no serious attempts had been made to estimate labour responses to taxation, especially with respect to prime-age male workers. Second, while there is some stock of empirical analysis on labour supply response of female workers, few studies have appropriately allowed for the budget constraint structure implied by the tax system. Third, as a corollary, there is not a reliable stock of empirical estimates to quantify the frequently employed concepts of “disincentives to work” or “distortion.” Given this state of the literature, we introduce our estimates, and calculate the degree of distortion using the concept of the marginal cost of public funds.     

可税性视角下网络主播个税征管问题探究

网络直播在发展中产生了许多新业态、新形式,网络主播的收入也不断增加.但目前在网络主播的个税征管上存在着多重困境,导致网络直播中税款流失严重.故有必要从经济、法律、征管三方面分析网络主播收入的可税性,从理论上明确对其征税的合法性与可行性,并强调从税法入手进行规制,为网络主播收入的征税问题提出建议.     

从征税环节谈对我国消费税改革的质疑

从今年4月1日起,我国开始实行新的消费税政策。新政策对消费税的税目、税率进行了必要的调整。这是自1994年设立消费税之后的最大一次政策调整。此次改革在社会上引起了强烈反响,同时也引起了一些质疑和争论。文章分析了目前消费税征税环节错位产生的负面影响,对此次消费税改革提出了质疑和进一步的改革建议。     

Income Tax Evasion Revisited: The Impact of Interest Rate Yields on Tax-Free Municipal Bonds

This study empirically investigates a hypothesis that the degree of aggregate federal personal income tax evasion may be influenced by the interest rate yield on high-grade municipal bonds. After allowing for the impacts of a variety of factors that typically have been inferred to influence income tax evasion, it is found that the higher the tax-free interest rate yield on high-grade municipal bonds relative to the taxable yield on 10-year Treasury notes, the lower the aggregate degree of federal personal income tax evasion.     

Strategic Tax and Financial Reporting Decisions: Theory and Evidence*

This paper examines the effect of book‐tax differences on the probability that a transaction is audited and the probability that additional taxes are collected. It constructs a stylized model in which the taxpayer reports both financial accounting income and taxable income. The government observes both reports before deciding whether to conduct an audit. The analysis of the equilibrium yields two hypotheses. First, the probability that the government will audit a transaction is higher if the transaction generates a positive book‐tax difference (e.g., an expenditure that is deducted for tax purposes but capitalized for financial reporting purposes) than if the transaction generates no book‐tax difference. Second, conditional on being selected for audit, transactions with and without book‐tax differences are equally likely to have detected understatements of tax liability. These hypotheses are tested using Internal Revenue Service (IRS) data from the Coordinated Examination Program. The empirical tests are consistent with the predictions of the strategic tax compliance model.     

Corporate Taxes and Financing Methods for Taxable Acquisitions*

We examine the influence of corporate taxes on U.S. firms' financing methods for taxable acquisitions of 100 percent of a target corporation's stock. We conduct tests of acquirer firms' use of debt or internal funds as the funding source for these acquisitions over the period 1987‐97. Our results provide the first empirical evidence that U.S. firms' use of debt to fund acquisitions significantly declines as foreign tax credit limitations reduce the marginal tax benefits received from borrowing. This finding is consistent with earlier speculation that U.S. foreign tax credit provisions could materially affect the capital costs of U.S. companies in debt‐financed acquisitions. We also find that these firms are generally high‐tax‐rate corporations whose financing choices are not significantly influenced by whether they acquire target‐firm tax loss carryovers. Our findings contribute to the accounting literature on the influence of taxes on the structure and financing of corporate acquisitions.     

Trade‐offs between Tax and Financial Reporting Benefits: Evidence from Purchase Price Allocations in Taxable Acquisitions

Under U.S. GAAP, firms recognize assets acquired in business combinations at fair value. Similarly, in taxable asset acquisitions firms adjust the tax basis of assets to fair value. Managers can increase the present value of future tax savings by allocating a greater portion of the purchase price to shorter‐lived assets than to goodwill or indefinite‐lived intangibles. However, this tax planning strategy imposes a financial reporting cost because it reduces book income following the acquisition; all else equal, allocations to shorter‐lived depreciable assets increase book depreciation expense, whereas allocations to goodwill and indefinite‐lived intangibles do not increase book amortization expense. We exploit the features of taxable asset acquisitions to investigate trade‐offs between tax and financial reporting incentives. We predict and find greater allocations to depreciable versus intangible assets when managers have strong tax incentives and weak financial reporting incentives. However, we also find that strong financial reporting incentives moderate the effects of strong tax incentives. These findings contribute new evidence to the literature on the importance of nontax costs in tax planning decisions     

个人所得税纳税筹划的相关问题研究

纳税筹划是指在纳税行为发生之前,在不违反相关法律、法规的前提下,对涉税事务进行事先策划,达到少缴税和递延缴税的目的。随着经济的发展,个人所得税的纳税筹划也越来越多的受到人们的重视。本文从纳税人、计税依据、税率、优惠政策入手,探讨个人所得税纳税筹划的各种技巧。