An Efficiency Analysis of Proposed State and Local Sales Tax Reforms

With few exceptions, state and local general sales and use taxes are levied primarily on tangible goods. Secular trends in production and consumption of goods and services, as well as legislated exemptions and exclusions, have eroded sales tax bases. A number of reforms designed to reduce base erosion have been proposed, including base broadening, conversion to a consumption tax, and wholesale replacement of sales taxes with income taxes. Each proposal has potential to shore up sales tax bases. From an economic perspective, the policy choice should turn on efficiency, equity, and simplicity. This paper reports on a computer analysis of efficiency effects. The results suggest that (i) base broadening can increase economic efficiency, (ii) converting to a consumption tax base dominates base broadening, (iii) replacing sales taxes with higher income taxes could produce large efficiency losses, (iv) base broadening could generate efficiency gains even if untaxed remote sales become a “sizable” fraction of total sales, and (v) even partial base broadening could produce sizable efficiency improvements.     

税收政策对居民消费的“异质性”效应——基于规模结构双重视角下的实证分析

在全球经济形势愈加严峻及中央实施"双循环"新发展格局的背景下，充分发挥税收政策对居民消费的驱动作用具有重要意义。以往基于常参数计量经济模型的研究忽略了不同经济时期税收政策对居民消费的"异质性"效应。文章采用DAG递归预测的方差分解法，对于税收政策与居民消费间的动态因果关系进行识别，并构建带有随机波动率的时变参数因子扩展向量自回归模型，分别从税收规模和税制结构视角出发，探究税收总量、不同税系、不同税类以及不同税种对居民消费的时变效应。研究发现：（1）不同时期税收政策对居民消费的影响程度差异较大，经济萧条时期税收政策对居民消费的影响并不显著，危机后影响程度大幅提高并长期稳定在较高水平。（2）从税收规模来看，税收政策对居民消费产生极为显著的"非凯恩斯效应"。从税制结构来看，直接税的扩张对居民消费产生显著的促进效应；商品税及其内部消费税、增值税的扩张显著"挤出"消费，关税轻微"挤入"消费，近年来增值税的"挤出效应"大幅增强；个人所得税对消费的"挤入效应"显著强于企业所得税；财产税的总体扩张对消费产生"挤出效应"，但占比相对较高的房产税、契税和土地增值税并未"挤出"消费。因此，政策当局应适度降低商品税税负水平、逐步下调个人所得税税率、完善财产税制。     

Public Goods,Tax Policies,and Unemployment in LDCs

We build a general equilibrium model of a small open economy characterized by unemployment and producing two privately traded goods and one nontraded public consumption good. The provision of public good is financed with an income tax or an excise tax on the manufactured good or an import tariff. Within this framework, the paper examines the effects of such policies on the country's unemployment ratio and welfare, and it derives the efficiency rules for public good provision for each policy instrument. It shows, among other things, that the private marginal cost of the public good always overstates its social marginal cost in the case of income taxes and may overstate it in the case of an excise tax on the manufactured good or a tariff even if the taxed good and the public good are substitutes in consumption.     

International spillover effects of sectoral tax differentiation in unionized economies

Sectoral tax differentiation has in recent years appeared onthe agenda in European policy discussions concerning unemployment.The member countries of the European Union are allowed to reducethe value added tax rates on goods and services that are particularlylabour intensive and price elastic. This paper provides a theoreticalanalysis of the international repercussions of such policies.We develop a two-country and two-sector model with monopolisticcompetition in the goods market and wage bargaining in the labourmarket. Policy externalities operate through the endogenouslydetermined terms of trade. We examine how national and supranationalcommodity tax policies affect sectoral and total employmentand characterize optimal commodity taxes with and without internationalpolicy cooperation. Some rough estimates of the welfare gainsfrom policy coordination are also presented, using a calibratedversion of the model.     

The double dividend from carbon regulations in Japan

Using a multisector dynamic CGE model, this paper examines the double dividend from carbon regulations in Japan. The model has 27 sectors and goods (eight goods generate carbon emissions) and covers 100 years (from 1995 to 2095). When carbon regulations are introduced, pre-existing taxes are reduced, keeping government's revenue constant. Our main findings are summarized as follows. First, the weak double dividend arises in all scenarios. This means that by using revenues from carbon tax to finance reductions in pre-existing distortionary taxes, one can achieve cost savings relative to the case where the tax revenues are returned to households in lump-sum fashion. Second, the strong double dividend does not arise from reductions in labor and consumption taxes, but it does from reductions in capital tax. The second result is attributable to the nature of the pre-existing tax system in Japan where capital taxes are more distortionary than labor and consumption taxes. J. Japanese Int. Economies 21 (3) (2007) 336–364.     

最优流转税与超额负担

本文通过一个简单的一般均衡模型讨论最优流转税的特点及其带来的"超额负担".在劳动力供应没有弹性的情况下,如果所有产品市场均为完全竞争,那么社会最优的流转税应实行单一从价税率,且无论基于"等价变动"或"补偿变动"的社会福利损失均为零.如果市场不是完全竞争,那么最优流转税应使得所有产品的勒纳指数(Lerner Index)均等化,且最优流转税一般可实现社会福利的潜在帕累托改进,即税收的超额负担为负.流转税是我国最重要的税种,本文的结论对于研究我国税收体系的发展方向有一定参考价值.     

Second-Best Pollution Taxes and the Structure of Preferences

We characterize optimal taxes on polluting and nonpolluting goods in Ramsey and Mirrlees second-best environments. The polluting good tax differs from the Pigouvian tax by Ramsey terms in the first and by Stiglitz/Mirrlees plus another adjustment term in the second. These terms can be positive, negative, or zero. If preferences are weakly separable in public and private goods, with the private good subutility weakly separable in labor and produced goods, nonpolluting goods are taxed uniformly and the concept of a tax differential between polluting and nonpolluting goods is well defined. The differential is then less than the Pigouvian tax in the Ramsey framework, but it can be greater, equal to, or smaller than the Pigouvian tax in the Mirrlees second best. In Mirrlees second best, if preferences are separable in labor supply and other goods, the second-best tax differential is identical to the Pigouvian tax.     

The Effect of Tax Preparation Expenses for Employees: Evidence from Germany

Using a panel of German income tax accounting data from taxpayers with no business income (employees), we find a negative relationship between tax preparation expenses and tax liabilities. However, preparation expenses are shown to exceed estimated tax savings. Specifically, one additional Euro spent on preparation yields an estimated tax savings of 72 cents in an OLS regression and 24 cents in a fixed effects regression. In addition, we observe substantial heterogeneity in tax savings among income groups, but even if we account for long‐term tax savings, tax liability reductions exceed tax preparation expenses only for the highest income quintile. In all other income quintiles, average preparation expenses exceed the estimated tax and time savings. Based on these results, we also examine whether other specific benefits affect an individual's decision to purchase tax preparation services, and the results indicate the importance of the benefits of coping with complexity and reduced uncertainty. Overall, our findings illustrate that the current tax compliance process violates at least two of Adam Smith's principles of taxation, taxes are neither certain nor fair.     

证券投资基金评价方法探讨

针对目前学术界热烈讨论的税制改革 ,本文提出对现有的消费税的结构进行调整 ,包括税种以及税率的调整 ,从而弥补由于将现行GNP型增值税改为消费型增值税后所造成的财政减收 ,并试图运用RAM SEY的最优化物税模型来确定最优的消费税税率。     

Pooling my personal account: Income responses to the payroll tax in China

Developing countries collect not only a far lower share of GDP in taxes, but also less payroll taxes than rich countries. This paper explores income responses to the payroll tax by evaluating the 2006 pension reform that subtracted 3 percentage points of employees' Defined Contribution account in China. First, our estimate of total income elasticity with respect to the pension rate is larger than 2, implying a lower optimal payroll tax rate than in rich countries. Second, we separate total income into labor and non-labor income, and show significant income shifting from labor to non-labor income. Third, we provide suggestive evidence that income responses to the pension reform are from evasion rather than real responses. We emphasize the necessity of administrative capacity for developing countries to extend the pension system. Remarkably, sharing the employer payroll tax with employees may be a self-enforcement mechanism, similar to the value-added tax, of the payroll tax.     

Export taxes and income distribution: The Philippines coconut levy

Export Taxes and Income Distribution: The Philippines Coconut Levy. — A large, empirically based general equilibrium model of the Philippine economy is used to analyze the implications of a tax on coconut oil exports. The analysis shows how general equilibrium models can be used to derive optimal tax rates and to show the detailed relationship between the rates at which these taxes are applied and their economic effects. The analysis explores in particular the effects such taxes have on economic welfare and on income distribution within the country. The distributional effects of this export tax are shown to be highly regressive, revealing more clearly the policy trade-offs such taxes involve.     

Economic Effects of Taxes on Exports of Palm Oil Products

In an effort to control increases in the prices of certain tradable commodities in recent years, the Indonesian government has experimented with a variety of policy interventions. Palm oil is important both as an export commodity and for household consumption in the form of cooking oil. We examine a palm oil export tax policy that ran from September 1994 through June 1997. We find that the taxes did reduce the domestic prices of palm oil products, and we estimate their effects on the distribution of income within Indonesia. Notably, we find that they actually reduced revenues of the government, and lowered profits for palm oil refiners. We also examine the efficiency effects and other aspects of the taxes. Finally, we discuss more drastic export restraints imposed more recently by the government during the economic crisis.     

Estimating the Corrective Tax for Goods whose Consumption Affects the Consumer’s Health

Taxing goods whose consumption has an adverse impact on the consumer’s health appears to be gaining support. But the social benefit from taxes on these goods is debatable. This paper considers what the corrective tax on such a good is and applies this theory to one good whose health effects are well established. More specifically, we produce a formula for computing the corrective tax on a good whose consumption may adversely affect the health of the consumer, and then use this formula to calculate the corrective tax for one such good, cigarettes.     

On Income Transfers and Equivalence Scales

This article focusses on the relations between equivalence scales and income transfers linked to household characteristics, also called demogrants. Since transfer payments have to be financed, the relation is analyzed in the framework of an optimal tax model. The – in a second-best sense – optimal demogrants and optimal marginal tax rate are characterised by their first-order conditions. Some general properties of the demogrant structure are derived and discussed. Finally, an adopted version of Stern's model for the numerical calculation of optimal taxes is used to obtain more explicit indications about how different factors affect the structure of demogrants and the marginal tax rate.     

税收政策的变化影响公司资本结构吗？--基于两税合并的经验数据

本文基于我国两税合并的背景,运用区间分析、配对样本T检验、回归分析和倍数差分法等方法,实证检验所得税政策的变化是否对资本结构产生影响,进而验证修正的MM理论是否适应中国资本市场。研究结果表明：所得税税负水平与公司资本结构显著正相关;由于新税法的实行,所得税税率下降的内资公司相应的降低了公司财务杠杆;两税合并前后税率下降的样本公司比税率不变的样本公司的资本结构变动显著要大。综合而言,税收政策能够显著影响公司资本结构决策。     

The Later You Pay,the Higher the k

This paper shows the importance of the age path (life-cycle timing) of any tax for the accumulation of capital in the economy. Income, consumption, and wage taxes differ in their age paths as well as their incentive effects. This paper studies how the differing age path of each tax affects the capital accumulation of the economy in an empirically calibrated life-cycle model. We investigate lump-sum “age” taxes and find in every case that the later the person pays tax, the higher the k of the economy. To analyze the life-cycle timing effect of conventional transactions-based taxes (income, consumption, and wage), we replace each tax with a lump-sum age tax that has the identical age path of tax payments over the life cycle. We find that the timing effect is quantitatively important and often causes the impact of a tax on capital accumulation to be very different from what would be predicted from the incentive effect.     

Optimal taxation and risk-sharing arrangements in an economic federation

This paper analyzes optimal taxation and risk-sharing arrangementsin an economy with two levels of government. Both levels providepublic goods and finance their expenditures via labor incometaxation, where the tax base is responsive to the private agents'labor supply decisions. The localities are assumed to experiencedifferent random productivity shocks, meaning that the privatelabor supply decision as well as the choices of income tax ratesare carried out under uncertainty. Part of the central government'sdecision problem is then to provide tax revenue sharing betweenthe local governments. The optimal degree of revenue sharingdepends on whether or not the localities/regions differ withrespect to labor supply incentives.     

SOME THOUGHTS ON INDIRECT TAX EFFECTS IN SOUTH AFRICA*

Whereas income tax is the product of 19th Century thought on State revenue, indirect taxes and property taxes go back to ancient times. This is not surprising, for in underdeveloped countries consumption and property are more readily ascertained than income, which is wholly or partly received in the form of subsistence income or payment in kind.     

Tax Incidence in Vietnam*

This paper examines the incidence of taxation in Vietnam, using data from the Living Standards Survey of 1997–1998 and an input–output matrix for 1997. The tax system in 1998 was slightly progressive, taking the equivalent of 7.8percent of spending for households in the lowest, and 10.3percent from households in the highest expenditure quintile. The replacement of the turnover tax by a value‐added tax in January 1999 made the system marginally more progressive, and the falling importance of taxes on trade has had a negligible effect on the overall incidence of the tax system. The tax system is progressive overall because business income taxes fall mainly on better‐off households; and low‐income households rely heavily on home consumption, which is untaxed. Against this, agricultural taxes and fees are highly regressive. The recent phasing out of the agricultural land use tax is making the tax system more progressive; however, efforts since 2004 to limit price increases for motor fuels have effectively provided a relatively greater subsidy to rich than to poor households.     

Tax Base Elasticities: A Multi-State Analysis of Long-Run and Short-Run Dynamics

We examine the relative dynamic responses of state personal tax revenues and sales tax bases to changes in state personal income. Our econometric analysis, which includes separate analyses of long-run and short-run dynamics for each state, permits the estimation of asymmetric short-run responses depending upon the relationship between current and expected tax base growth. Results indicate that the average long-run elasticity for income taxes is more than double that for sales taxes. Most states have asymmetric short-run income elasticities, which are again greater for income taxes than for sales taxes. However, a joint analysis of long- and short-run dynamics reveals that neither tax is universally more volatile. After calculating state-specific income elasticities for both taxes, we employ cross-section regression techniques to explain the variation in elasticities across states. Several policy factors are found to be important, including elements of tax bases and rate structures.