Notes and comments. Ricardo on income tax: a note

Despite the fact that Ricardo experienced Pitt's income taxpolicies, and that he regarded taxation as the most importantissue to which the principles of political economy should beapplied, he rarely referred to actual tax reforms. This paperindicates that Ricardo's system of economics cannot bring aboutany tax that is completely compatible with his main criteriafor taxation (distribution neutrality, price neutrality andminimum taxation) as well as certainty, convenience and thesecurity of property. This result may explain why Ricardo didnot say which type of taxation system the British governmentshould establish.     

2011年个人所得税改革的收入再分配效应

本文考察2011年9月1日实施的个人所得税改革的收入再分配效应。根据目前我国分项课征的个人所得税征管模式,本文推导出税收的收入再分配效应指数按收入构成的分解方法。根据该分解方法的主要分析结果可概括为两点:其一,平均税率的高低是个税收入分配效应大小的主要决定因素,累进性则是次要的。由于平均税率的降低,本次税收改革弱化了本来就十分微弱的个人所得税的收入分配效应。其二,我国个人所得税整体累进性指数随工资薪金所得费用扣除的提高呈倒U型。十分巧合的是,本次改革确定的3500元免征额正好处于倒U型的最大值,超过3500元的费用扣除反而会削弱我国个税的累进性。     

Why Did Income Inequality in Germany Not Increase Further After 2005?

While income inequality in Germany considerably increased in the years before 2005, this trend stopped after 2005. We address the question of what factors were responsible for the break in the inequality trend after 2005. Our analysis suggests that income inequality in Germany did not continue to rise after 2005 for the following reasons. First, we observe that the general rise in wage inequality that explained a lot of the inequality increase before 2005, became less steep (but did not stop) after 2005. Second, despite further increases in wage inequality after 2005, inequality in annual labour incomes did not increase further after 2005 because increased within‐year employment opportunities compensated otherwise rising inequality in annual labour incomes. Third, income inequality did not fall in a more marked way after 2005 because also the middle and the upper part of the distribution benefited from the employment boom after 2006. Finally, we provide evidence that the effect of a wide range of other factors that are often suspected to have influenced the distribution such as capital incomes, household structures, population ageing, changes in the tax and transfer system and the financial crisis of 2008 did not significantly alter the distribution after 2005.     

Income Distribution, Redistributive Politics, and Economic Growth

This article studies the political economy of inequality and growth by combining the political economy approach with an imperfect capital market assumption. In the present model, there emerges a class of individuals whose members do not invest privately beyond the state-financed schooling, due to their initial wealth constraint. We show that inequality affects private investment not only through the political effect, which relates inequality to private investment negatively, but also through what we call the threshold effect, which associates inequality to private investment positively. In general, private investment and inequality do not show a monotone negative relationship.     

Long term trends in fair and unfair inequality in the United States

This article analyses the microeconomic sources of wage inequality in the United States from 1967–2012. Decomposing inequality into factors categorized by degree of personal responsibility, education explains over twice as much of inequality today as 45 years ago. However, neither hours worked nor education, industry, marital status, or geographical location can explain the rise in income inequality. In fact, ‘unfair’ inequality (income disparity derived from non-responsibility factors) has risen faster than ‘fair’ inequality (income disparity derived from responsibility factors), regardless of the set of variables chosen as fair sources of inequality. We further examine income inequalities within gender and racial groups, finding substantial heterogeneity. Overall, using micro data to understand the sources of inequality and how these changes over time can provide better information for policymakers motivated to combat rising inequality.     

How do contribution limits affect contributions to tax-preferred savings accounts?

Contributions to tax-preferred savings accounts are typically constrained by a contribution limit. These limits influence contributions not only for taxpayers currently constrained by the limit, but also for those contributing less than the limit. I develop a simple life-cycle model in which taxpayers exhibit ‘use it or lose it’ contribution behavior. This connects current contributions to future contribution limits, and implies that an increase in contribution limits can decrease contributions. Empirical evidence from microdata provides support for the model. Using variation from Canadian limit reforms I find that larger future contribution room is associated with smaller contributions.     

Equality of opportunity and educational achievement in Portugal

Portugal has one of the highest levels of income inequality in Europe, and low wages and unemployment are concentrated among low skill individuals. Education is an important determinant of inequality. However, there are large differences in the educational attainment of different individuals in the population, and the sources of these differences emerge early in the life-cycle when families play a central role in individual development. We estimate that most of the variance of school achievement at age 15 is explained by family characteristics. Observed school inputs explain very little of adolescent performance. Children from highly educated parents benefit of rich cultural environments in the home and become highly educated adults. Education policy needs to be innovative: (1) it needs to explicitly recognize the fundamental long run role of families on child development; (2) it needs to acknowledge the failure of traditional input based policies.

Social Security Strategies and Redistributive Effects in European Social Transfer Systems

This paper evaluates the linkage between social security strategies and redistributive effects in EU social transfer systems. It is argued that the various European systems produce different patterns of redistribution that may be explained by the adoption of different mixes of social security strategies. In support of this argument, several ideal-typical strategies are characterized and a classification of European social transfer systems is introduced. Subsequently, the redistributive effects of the systems are assessed and the relationship to their class assignment is investigated. We conclude that the redistributive effects differ markedly between systems of different classes, indicating that redistributive patterns are heavily influenced by the adopted strategy mix.     

Status-seeking behavior,the evolution of income inequality,and growth

Using an overlapping generations model, this paper investigates the implications of status-seeking behavior, induced by preferences for relative income, for the evolution of income inequality. When average income rises, an individual’s marginal utility of their own income may increase (keeping up with the Joneses, or KUJ), or decrease (running away from the Joneses, or RAJ). It is shown that income inequality is shrinking over time in the KUJ economy, whereas it is expanding in the RAJ economy. We also explore the implications for long-run growth and inequality, in the existence of both KUJ and RAJ agents. I am truly grateful to Koichi Futagami for his encouragement and guidance in writing this paper. I have benefitted from comments by an anonymous referee, Been-Lon Chen, Giacomo Corneo, Akiomi Kitagawa, Kazuo Mino, Kazuhiro Yuki, and seminar participants at Osaka University, the 2006 Japanese Economic Association Autumn Meeting at Osaka City University, the Far Eastern Meeting of Econometric Society 2007 at Taipei, SER Conference 2007 at Singapore, and the European Meeting of Econometric Society 2007 at Budapest. All remaining errors are, of course, my own. The financial support from JSPS Research Fellowships for Young Scientists is greatly acknowledged.     

收入不平等对人口健康影响的研究综述

自1970年代以来,西方学者从理论假设和实证研究两个角度对收入不平等对于人口健康产生的影响进行了深入而广泛的研究,采用跨国数据进行的研究基本上证实了收入不平等对于人口健康产生的不利影响,而采用跨地区数据以及个人数据进行的研究得出的结论则不尽一致.本文主要从理论假设、实证研究和影响途径三个角度对收入不平等对于人口健康的相关研究进行梳理和归纳,以期对我国的相关研究有所启示.     

The Austrian income tax tariff, 1955–2006

Using official statistics and tax laws, we outline and discuss the evolution of the personal income tax in Austria since the beginning of the Second Republic in 1955. Focusing on the tax tariff and its progressivity properties, we identify a period of high (and increasing) progressivity before 1989, followed by a period of diminished progressivity since 1989. While still being a powerful revenue instrument, the Austrian income tax seems to have lost both redistributive impact and political allure.

Optimal nonlinear income taxation with learning-by-doing

This paper examines a two-period model of optimal nonlinear income taxation with learning-by-doing, in which second-period wages are an increasing function of first-period labour supply. We consider the cases when the government can and cannot commit to its second-period tax policy. In both cases, the canonical Mirrlees/Stiglitz results regarding optimal marginal tax rates generally no longer apply. In particular, if the government cannot commit and each consumer's skill-type is revealed, it is optimal to distort the high-skill type's labour supply downwards through a positive marginal tax rate to relax an incentive-compatibility constraint. Our analysis therefore identifies a setting in which a positive marginal tax rate on the highest-skill individual can be justified, despite its depressing effect on both labour supply and wages.