International and Intergenerational Environmental Externalities

We examine a world in which policymakers' actions in a given country at a given time have long-lived effects on a common resource: the global environment. We consider the first best in which long-lived planners behave cooperatively, then examine the allocation of resources when there is non-cooperation across countries, across time, or both. Finally we analyze the dynamic behavior of the economy along balanced growth paths. It is found that while long-lived international institutions are necessary to internalize all externalities, cooperation at a point in time may be harmful to future generations.     

Optimal Taxation with Private Government Information

The Ramsey model of fiscal policy implies that taxes should be smooth in the sense of having small variances. In contrast, empirical labour tax processes are smooth in the sense of being random walks; they provide prima facie evidence for incomplete government insurance. This paper considers whether private government information might lie behind such incomplete insurance. It shows that optimal incentive compatible policies exhibit limited use of state contingent debt and greater persistence in taxes and debt, and it argues that they are better approximations to empirical fiscal policies than those implied by the Ramsey model. The paper also establishes that optimal incentive compatible allocations converge to allocations such that the government's incentive compatibility constraint no longer binds. Generally, these limiting allocations are ones in which the government is maximally indebted. Their credibility and the interaction of incentive compatibility and credibility is briefly discussed.     

Wealth Distribution and Optimal Inheritance Taxation in Life-cycle Economies with Intergenerational Transfers

Intergenerational transfers are introduced into a general equilibrium life-cycle model in order to explain observed levels of wealth heterogeneity. In our overlapping generations model, heterogenous agents face uncertain lifetime and leave both accidental and voluntary bequests to their children. Furthermore, agents face stochastic employment opportunities. The model is calibrated with regard to the characteristics of the US economy. Our results indicate that bequests only account for a small proportion of observed wealth heterogeneity. The introduction of an inheritance tax increases both welfare, as measured by the average lifetime utility of a newborn, and equality of the wealth distribution.
JEL classification : D 31; D 91; H 21; C 68; E 21     

Specific versus ad valorem Taxation and Externalities

Received December 15, 2000; revised version received September 10, 2001     

Industrialization and Government Expenditures: The Case of South Korea

South Korea has been transformed from a nation of war torn poverty to an industrial giant in one generation. Many attribute this to the role of government and believe that the size of government spending increases with industrialization. This paper, using time series data for the 1970–1990 period, empirically tested the impact of industrialization on government spending in Korea. Our results suggest that the two major determinants of public spending are private sector's income (output) and the overall state of employment. Further, our results show that the income elasticity of demand for public goods is greater than unity, both in the short-run and long-run. [H1]     

Productive Government Expenditures and the Current Account

This paper examines the effects of a change in government expenditure on the current account of the balance of payments using the optimizing approach. It is assumed that government expenditure is productive, and is regarded as an input in the aggregate production function. Based on the Blanchard–Fischer-type model, the paper demonstrates decisively that the current account deficit is due to a permanent increase in government expenditure.
JEL Classification Numbers: F41, H30.     

Optimal Indirect and Capital Taxation

We consider an environment in which agents' skills are private information and follow arbitrary stochastic processes. We prove that it is typically Pareto optimal for an individual's marginal benefit of investing in capital to exceed his marginal cost of doing so. This wedge is consistent with a positive tax on capital income. We also prove that it is Pareto optimal for the marginal rate of substitution between any two consumption goods to equal the marginal rate of transformation. This lack of a wedge is consistent with uniform taxation of consumption goods within a period.     

财产课税与地方财政--一个以税收归宿为视角的解释

财产税是世界各国地方政府收入中的重要来源。本文从分析财产税的归宿入手，寻找能够解释这一普遍现象的答案。对绝对税收归宿、平衡预算归宿和差别税收归宿的考察结果表明，作为一种区域内受益税，财产税符合不同级次政府应提供使其辖区范围内居民受益的服务并因此而课税的经济学原理。加快推进财产税改革将有利于规范中国目前的财政体制，改善地方财政所面临的被动局面．     

最优税收理论与我国税制改革

在对最优税收理论进行系统研究的基础上,将最优税收理论与我国的实际相结合,提出了优化我国税制改革的建议,力图设计出一套比较符合国情的最优税制,从而更好地促进我国的经济发展。     

Optimal Utilitarian Taxation and Horizontal Equity

We impose a horizontal equity restriction on the problem of finding the optimal utilitarian tax mix. The horizontal equity constraint requires that individuals with the same ability have to pay the same amount of taxes regardless of their preferences for leisure. Contrary to normal findings, we find that a good that is complementary to leisure can be encouraged by the tax system and that a good that normally should be discouraged by the tax system can be subsidized even if the economy is composed of only two private commodities plus leisure. Also, the marginal effective tax rate can be different from zero at the top of the ability distribution when the tax mix obeys the horizontal equity constraint.     

Budget Balancedness and Optimal Income Taxation

We make two contributions to the theory of optimal income taxation. First, assuming conditions sufficient for existence of a Pareto optimal income tax and public goods mechanism, we show that if agents' preferences satisfy an extended notion of single crossing called capacity constrained single crossing, then there exists a Pareto optimal income tax and public goods mechanism that is budget balancing. Second, we show that, even without capacity constrained single crossing, existence of a budget balancing Pareto optimal income tax and public goods mechanism is guaranteed if the set of agent types contains no atoms.     

Black Markets and Optimal Evadable Taxation

In a simple model of evadable indirect taxation, some surprises emerge. Because of a 'market-thinning' effect of high prices, high taxes induce multiple equilibria (low-price black markets and high-price legal markets). Further, evadability introduces a bifurcation to optimal taxation: For less effective tax administrations, the optimal tax system follows a 'cash cow' pattern, with one sector bearing all of the tax; but for relatively effective administrations, the optimum follows a slightly modified Ramsey rule. This discontinuity results from the mathematics of evasion incentives, and may help explain tax reforms commonly seen over the course of economic development     

Green Technology and Optimal Emissions Taxation

Unless an active environmental policy exists, firms have no incentive to engage in abatement or environmental R&D so policy design is of paramount importance. This design heavily depends on the way R&D spillovers operate. There are two distinct types of R&D spillover: output spillover and input spillover. An input spillover operates on the expenditure toward pollution reduction, whereas an output spillover manifests as the achieved abatement. Under optimal emissions taxation, significant differences arise due to this distinction, in particular, when the spillover operates on R&D inputs. In an oligopolistic setting, the result is higher R&D expenditure, but also higher aggregate emissions and, consequently, higher emissions taxes. By contrast, when spillovers occur in R&D output, there is a U‐shaped relationship between the optimal tax and the spillover, showing a trade‐off between the optimal tax rate and spillovers when these are low. In terms of the relative effectiveness of different R&D organization setups, combining emissions taxes with R&D cooperation, this paper shows that under low levels of R&D spillover R&D cooperation gives higher emissions reductions, whereas when spillovers are high this is not the case.     

政府教育支出区域间不平衡的动态分析

本文认为 ,在对区域间政府教育支出发展不均衡的问题进行研究时 ,还要着重考虑两个方面 ,一是政府教育支出要受到政府财政规模的限制 ,二是政府教育支出要受制于国家教育政策的长期目标。本文从我国近年来总体的政府教育支出规模增长与教育需求的特点着手 ,用动态分析方法对近年来省区间政府教育支出规模变动所引起的受教育人口水平的变化过程进行了分析。文章认为 ,政府应先行调整经济发达地区的教育政策目标 ,继续加大对经济不发达地区的转移支付力度。同时 ,优化教育支出结构 ,提高政府教育支出效率 ,确保有限的政府教育资金都能用在教育事业发展上。     

Optimal Income Taxation and Job Choice

In this paper, we study optimal income taxation when different job types exist for workers of different skills. Each job type has some feasible range of incomes from which workers choose by varying labor supply. Workers are more productive than others in the jobs that suit them best. The model combines features of the classic optimal tax literature with labor variability along the intensive margin, with the extensive‐margin approach where workers make discrete job choices and/or participation decisions. We find that first‐best maximin utility can be achieved in the second‐best, and marginal tax rates below the top can be negative or zero.     

宪政:现代税制之纲

宪法是税收法律之源，是反映人民共同意志的民主立法，也是保障纳税人利益不受侵犯的自由之法，宪政的基本精神和基本制度构架是决定我国未来税制改革方向的根本性因素；宪法所伸张的正义、平等、人权等价值观，在各种税收专门法中必须得到充分和准确的体现。确立保障生存权、有支付能力、公平税负、量力负担和便利等符合宪法原理的税收原则或总政策，是现代法治社会的基本要求和特征。现代税收应是从纳税者的权利与义务相统一的角度构造的概念，即作为法律上的权利与义务主体的纳税人，以履行纳税义务作为享有宪法规定的各项权利为前提，依照遵从宪法所制定的税收法律为依据，承担物质性的给付义务，从而使国家得以具备满足公民对公共服务需要的能力的活动。     

The Intergenerational Incidence of Government Spending*

This paper analyzes the effect of an increase in government spending on the welfare of different generations in a dynamic general equilibrium model. The paper shows that the intergenerational incidence of government spending on a public good is determined not only by the welfare effects due to the public good and to financing the good but also by a welfare effect due to intertemporal substitution between private consumption when government spending is increased. The degree of substitutability between private consumption and public spending is shown to be a key determinant of this incidence.     

动态环境税外部性、污染累积路径与长期经济增长——兼论环境税的开征时点选择问题

本文构建了包含动态环境税、污染累积与经济增长的理论模型,采用Shooting方法计算鞍点路径上各个时期的均衡解,分析了动态环境税的外部效应,主要结论为:渐进递增的动态环境税政策通过对能源过度使用的纠正,不但体现了促进经济增长与降低污染水平的双重红利,而且实现了整条鞍点路径上福利最大化的目标。与之相对,不征收环境税时,能源过度消耗不能得到有效抑制,环境污染产生了较高的生产效率损失与社会福利损失。严格环境税政策对于经济增长依赖能源的行为则存在"矫枉过正",进而出现消费过度的问题,由于投资不足迅速造成产出增长乏力,并使得鞍点路径上社会福利长期处于较低水平。此外,通过设定政府的优化目标函数对动态环境税最佳开征时点的研究表明,政府应尽早开征环境税,以及时减弱经济增长对能源的过度依赖性,实现经济科学发展与社会福利不断改善。     

Government Expenditures and Revenues: Evidence of Fractional Cointegration in an Asymmetric Modeling

In this paper, we examine the relationship between the US government expenditures and revenues using a fractional cointegration framework. In doing so, we permit a much richer degree of flexibility in the dynamic adjustment process toward equilibrium than in the classical case of cointegration. Moreover, we relax the assumption of a symmetric adjustment process throughout the use of threshold autoregressive (TAR) and momentum threshold autoregressive (M-TAR) models in the error correction representation of the process. The results show that both individual series are non-stationary I(1) and we do not find evidence of cointegration of any degree. However, if we take into account a structural break at 1973(2), fractional cointegration is found if the underlying process is autocorrelated, especially in the asymmetric modeling.

Government Spending and Taxation in Democracies and Autocracies

The paper develops a theoretical rationale for a non-linear relationship between the level of democracy and government spending. A model is presented showing why and how political participation influences the spending behavior of opportunistic governments that can choose an optimal combination of rents and public goods to attract political support. If the level of democracy remains low, governments rationally prefer rents as an instrument to assure political support. With increasing democratic participation, however, rents become an increasingly expensive (per unit of political support) instrument while the provision of public goods becomes more and more efficient in ensuring the incumbent government's survival in power. As a consequence, an increase in democracy, which drives a country from a pure autocracy to a semi-participatory system, tends to reduce government spending, while an increase in political participation from a semi-participatory country to a full democracy tends to raise the size of the public sector.