Macroeconomic And Distributional Effects Of Personal Income Tax Reforms

Author : Mrs.Sandra V Lizarazo Ruiz,Adrian Peralta-Alva,Mr.Damien Puy
Publisher : International Monetary Fund
Page : 32 pages
File Size : 45,5 Mb
Release : 2017-09-01
Category : Business & Economics
ISBN : 9781484316580

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Macroeconomic and Distributional Effects of Personal Income Tax Reforms by Mrs.Sandra V Lizarazo Ruiz,Adrian Peralta-Alva,Mr.Damien Puy Pdf

This paper assesses the macroeconomic and distributional impact of personal income tax (PIT) reforms in the U.S. drawing on a multi-sector heterogenous agents model in which consumers have non-homothetic preferences and sectors differ in terms of their relative labor and skill intensity. The model is calibrated to key characteristics of the US economy. We find that (i) PIT cuts stimulate growth but the supply side effects are never large enough to offset the revenue loss from lower marginal tax rates; (ii) PIT cuts do “trickle-down” the income distribution: tax cuts stimulate demand for non-tradable services which raise the wages and employment prospects of low-skilled workers even if the tax cut is not directly incident on them; (iii) A revenue neutral tax plan that reduces PIT for middle-income groups, raises the consumption tax, and expands the Earned Income Tax Credit can have modestly positive effects on growth while reducing income polarization; (iv) The growth effects from lower income taxes are concentrated in non-tradable service sectors although the increased demand for tradable goods generate positive spillovers to other countries; (v) Tax cuts targeted to higher income groups have a stronger growth impact than tax cuts for middle income households but significantly worsen income polarization, even after taking into account trickle-down effects and an expansion of the Earned Income Tax Credit.

Author : Adrian Peralta-Alva,Ms.Marina Mendes Tavares,Xuan S. Tam,Xin Tang
Publisher : International Monetary Fund
Page : 49 pages
File Size : 52,7 Mb
Release : 2018-06-22
Category : Business & Economics
ISBN : 9781484364369

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The Macroeconomic and Distributional Implications of Fiscal Consolidations in Low-income Countries by Adrian Peralta-Alva,Ms.Marina Mendes Tavares,Xuan S. Tam,Xin Tang Pdf

We quantitatively investigate the macroeconomic and distributional impacts of fiscal consolidations in low-income countries (LICs) through value added tax (VAT), personal income tax (PIT), and corporate income tax (CIT). We extend the standard heterogeneous agents incomplete markets model by including multiple sectors and rural-urban distinction to capture salient features of LICs. We find that overall, VAT has the least efficiency costs but is highly regressive, while PIT impacts the economy in the opposite way with CIT staying in between. Cash transfers targeting rural households mitigate the negative distributional impacts of VAT most effectively, while public investment leads to little redistribution.

Author : Fredrick L. Golladay,Robert H. Haveman
Publisher : Elsevier
Page : 216 pages
File Size : 51,5 Mb
Release : 2013-10-22
Category : Business & Economics
ISBN : 9781483272405

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The Economic Impacts of Tax—Transfer Policy by Fredrick L. Golladay,Robert H. Haveman Pdf

The Economic Impacts of Tax—Transfer Policy: Regional and Distributional Effects deals with evaluating proposed income-transfer policies through tax modeling. The book analyzes the direct and indirect effects of two variants of a negative income tax plan. These are the standard negative income tax and the Family Assistance Plan. By studying the indirect effects of income-maintenance programs on industries, occupations, and different regions, the authors point to understanding the effectiveness of alternative income-maintenance programs. Proposed changes in national taxes and transfer policies aim to achieve income redistribution. In their studies and models, the authors noted that the full impact of these tax policies throughout the income spectra covering different income classes, industries, occupations, and regions is different from that gathered from observations involving the direct effects of these schemes. The authors cite some policy implications resulting from their study, such as the redistributional impacts of direct tax-transfer scheme are not as efficient as expected and that increasing the demand for low-skilled workers and improving their job qualities is one way of improving income distribution. The text is valuable for economists and government policymakers in the finance and labor sectors, as well as for sociologists and political economists.

Author : Alan J. Auerbach,Kent Smetters
Publisher : Oxford University Press
Page : 352 pages
File Size : 51,7 Mb
Release : 2017-02-15
Category : Business & Economics
ISBN : 9780190619732

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The Economics of Tax Policy by Alan J. Auerbach,Kent Smetters Pdf

The debates about the what, who, and how of tax policy are at the core of politics, policy, and economics. The Economics of Tax Policy provides a straightforward overview of recent research in the economics of taxation. Tax policies generate considerable debate among the public, policymakers, and scholars. These disputes have grown more heated in the United States as the incomes of the wealthiest 1 percent and the rest of the population continue to diverge. This important volume enhances understanding of the implications of taxation on behavior and social outcomes by having leading scholars evaluate key topics in tax policy. These include how changes to the individual income tax affect long-term economic growth; the challenges of tax administration, compliance, and enforcement; and environmental taxation and its effects on tax revenue, pollution emissions, economic efficiency, and income distribution. Also explored are tax expenditures, which are subsidy programs in the form of tax deductions, exclusions, credits, or favorable rates; how college attendance is influenced by tax credits and deductions for tuition and fees, tax-advantaged college savings plans, and student loan interest deductions; and how tax policy toward low-income families takes a number of forms with different distributional effects. Among the most contentious issues explored are influences of capital gains and estate taxation on the long term concentration of wealth; the interaction of tax policy and retirement savings and how policy can "nudge" improved planning for retirement; and how the reform of corporate and business taxation is central to current tax policy debates in the United States. By providing overviews of recent advances in thinking about how taxes relate to behavior and social goals, The Economics of Tax Policy helps inform the debate.

Author : John Creedy,Cath Sleeman
Publisher : Edward Elgar Publishing
Page : 296 pages
File Size : 43,5 Mb
Release : 2006-01-01
Category : Business & Economics
ISBN : 1781958408

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The Distributional Effects of Indirect Taxes by John Creedy,Cath Sleeman Pdf

This book develops a number of analytical models and presents empirical analyses of the equity and efficiency effects of existing indirect taxes from New Zealand. Potential tax reforms including environmental taxes are also examined and the methods presented can easily be adapted to deal with other countries. Policy debates are inevitably influenced by value judgements, which are seldom made explicit either by governments or those engaging in public discussion. By concentrating on the empirical orders of magnitude, and by examining the implications of adopting alternative value judgements, the findings of this book contribute towards rational policy debate, rather than relying on guesswork and rhetoric. The equity and efficiency effects of indirect taxes are examined in detail, using the central concepts of welfare changes, the excess burden of taxation, and money metric utility measures. The indirect taxes examined include a carbon tax designed to reduce carbon dioxide emissions. The Distributional Effects of Indirect Taxes develops widely applicable models and will therefore appeal to economists interested in public economics, tax policy, inequality measurement, welfare economics and tax modelling. Economists in government departments and international agencies interested in public finance and inequality and poverty measurement will also find much to engage them in this book, as will policymakers concerned with indirect and environmental tax policy, inequality, and welfare economics.

Author : David F. Bradford
Publisher : American Enterprise Institute
Page : 340 pages
File Size : 52,7 Mb
Release : 1995
Category : Business & Economics
ISBN : 0844738913

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Distributional Analysis of Tax Policy by David F. Bradford Pdf

The fifteen authors and five commentators include current and former members of the Office of Tax Analysis, the Joint Committee on Taxation, and the Congressional Budget Office, lending an authority to this discussion of tax distributional tables, their methodology, and consideration for improvement. The analysis outlines the attitudes and problems in the current distributional tax methods, innovations in the JCT distribution, the use of generational accounting, transfer systems, and lifetime taxpayer profiles. Annotation copyright by Book News, Inc., Portland, OR

Author : Henry Aaron,William G. Gale
Publisher : Brookings Institution Press
Page : 544 pages
File Size : 49,7 Mb
Release : 2010-12-01
Category : Business & Economics
ISBN : 0815707290

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Economic Effects of Fundamental Tax Reform by Henry Aaron,William G. Gale Pdf

The tax system profoundly affects countless aspects of private behavior. It is a powerful policy influence on the distribution of income and it is the one aspect of government that almost every citizen cannot avoid. With tax reform high on the political agenda, this book brings together studies of leading tax economists and lawyers to assess the various reform proposals and examine the effects of tax reform in several distinct areas. Together, these studies and comments on them present a balanced evaluation of professional opinion on the issues that will be critical in the tax reform debate. The book addresses annual and lifetime distributional effects, saving, investment, transitional problems, simplification, home ownership and housing prices, charitable groups, international taxation, financial intermediaries and insurance, labor supply, and health insurance. In addition to Henry Aaron and William Gale, the contributors include Alan Auerbach, University of California, Berkeley; David Bradford, Princeton University; Charles Clotfelter, Duke University; Eric Engen, Federal Reserve; Don Fullerton, University of Texas; Jon Gruber, Massachusetts Institute of Technology; Patric Hendershott, Ohio State; David Ling, University of Florida; Ronald Perlman, Covington & Burling; Diane Lim Rogers, Congressional Budget Office; John Karl Scholz, University of Wisconsin; Joel Slemrod, University of Michigan; and Robert Triest, University of California, Davis.

Author : Kevin Kim,Michael Keen,Ricardo Varsano
Publisher : International Monetary Fund
Page : 56 pages
File Size : 53,8 Mb
Release : 2006-10
Category : Business & Economics
ISBN : UCSD:31822036089290

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The "Flat Tax(es)" by Kevin Kim,Michael Keen,Ricardo Varsano Pdf

One of the most striking tax developments in recent years, and one that continues to attract considerable attention, is the adoption by several countries of a form of "flat tax." Discussion of these quite radical reforms has been marked, however, more by assertion and rhetoric than by analysis and evidence. This paper reviews experience with the flat tax, seeking to redress the balance. It stresses that the flat taxes that have been adopted differ fundamentally, and that empirical evidence on their effects is very limited. This precludes simple generalization, but several lessons emerge: there is no sign of Laffer-type behavioral responses generating revenue increases from the tax cut elements of these reforms; their impact on compliance is theoretically ambiguous, but there is evidence for Russia that compliance did improve; the distributional effects of the flat taxes are not unambiguously regressive, and in some cases they may have increased progressivity, including through the impact on compliance; adoption of the flat tax has not resolved common challenges in taxing capital income; and it may have strengthened, not weakened, the automatic stabilizers. Looking forward, the question is not so much whether more countries will adopt a flat tax as whether those that have will move away from it.

Author : Ms.Era Dabla-Norris,Frederico Lima
Publisher : International Monetary Fund
Page : 47 pages
File Size : 54,7 Mb
Release : 2018-09-28
Category : Business & Economics
ISBN : 9781484377451

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Macroeconomic Effects of Tax Rate and Base Changes: Evidence from Fiscal Consolidations by Ms.Era Dabla-Norris,Frederico Lima Pdf

This paper examines the macroeconomic effects of tax changes during fiscal consolidations. We build a new narrative dataset of tax changes during fiscal consolidation years, containing detailed information on the expected revenue impact, motivation, and announcement and implementation dates of nearly 2,500 tax measures across 10 OECD countries. We analyze the macroeconomic impact of tax changes, distinguishing between tax rate and tax base changes, and further separating between changes in personal income, corporate income, and value added tax. Our results suggest that base broadening during fiscal consolidations leads to smaller output and employment declines compared to rate hikes, even when distinguishing between tax types.

Author : Lester C. Thurow
Publisher : New York : Praeger
Page : 200 pages
File Size : 50,6 Mb
Release : 1971
Category : Fiscal policy
ISBN : UCAL:B4277651

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The Impact of Taxes on the American Economy by Lester C. Thurow Pdf

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 70 pages
File Size : 43,5 Mb
Release : 1986-09-15
Category : Business & Economics
ISBN : 0939934647

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Fund-Supported Programs, Fiscal Policy, and Income Distribution by International Monetary Fund Pdf

This is the third in a group of three papers dealing with various aspects of Fund-supported adjustment programs.

Author : Paul Ekins,Stefan Speck
Publisher : Unknown
Page : 0 pages
File Size : 53,5 Mb
Release : 2011
Category : Environmental impact charges
ISBN : OCLC:1330343023

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Environmental Tax Reform (ETR) by Paul Ekins,Stefan Speck Pdf

A comprehensive analysis of an environmental tax reform where people are taxed on pollution and the use of natural resources instead of on their income, this book looks at the challenges involved in implementing this tax reform across Europe.

Author : Willi Leibfritz,John Thornton,Alexandra Bibbee
Publisher : OECD
Page : 144 pages
File Size : 55,6 Mb
Release : 1997
Category : Fiscal policy
ISBN : UCSC:32106014518879

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Taxation and Economic Performance by Willi Leibfritz,John Thornton,Alexandra Bibbee Pdf

This paper reviews the theoretical and empirical literature on the effects of taxation on economic performance, adds marginally to the empirical literature, and draws conclusions for tax policy in OECD countries.

Author : Mr.Nigel A Chalk,Mr.Michael Keen,Ms.Victoria J Perry
Publisher : International Monetary Fund
Page : 48 pages
File Size : 45,7 Mb
Release : 2018-08-07
Category : Business & Economics
ISBN : 9781484373286

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The Tax Cuts and Jobs Act: An Appraisal by Mr.Nigel A Chalk,Mr.Michael Keen,Ms.Victoria J Perry Pdf

This paper assesses the landmark Tax Cuts and Jobs Act (TCJA), from the perspective of both the U.S. itself and the wider world. The reform has many positive aspects including steps to broaden the base of, and reduce marginal rates under, the personal income tax (PIT), reduce distortions to investment and financing decisions, and mitigate outward profit shifting. But the TCJA has a large fiscal price tag and leaves significant uncertainty as to how the U.S. tax system will develop. The PIT changes could have better targeted relief at low earners, and there is scope to more fully address distortions in business taxation. The novel international provisions create a complex array of both positive and negative international spillovers, and have the potential to significantly reshape the wider international tax system.

Author : Parthasarathi Shome
Publisher : Springer Nature
Page : 507 pages
File Size : 40,5 Mb
Release : 2021-04-09
Category : Business & Economics
ISBN : 9783030682149

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Taxation History, Theory, Law and Administration by Parthasarathi Shome Pdf

Tax practitioners are unfamiliar with tax theory. Tax economists remain unfamiliar with tax law and tax administration. Most textbooks relate mainly to the US, UK or European experiences. Students in emerging economies remain unfamiliar with their own taxation history. This textbook fills those gaps. It covers the concept of taxes in regards to their rationale, principles, design, and common errors. It addresses distortions in consumer choices and production decisions caused by tax and redressals. The main principles of taxation—efficiency, equity, stabilization, revenue productivity, administrative feasibility, international neutrality—are presented and discussed. The efficiency principle requires the minimisation of distortions in the market caused by tax. Equity in taxation is another principle that is maintained through progressivity in the tax structure. Similarly, other principles have their own ramifications that are also addressed. A country’s constitutional specification of tax assignment to different levels of government—central, state, municipal—are elaborated. The UK is more centralised than the US and India. India has amended its constitution to introduce a goods and services tax (GST) covering both central and state governments. Drafting of tax law is crucial for clarity and this aspect is addressed. Furthermore, the author illustrates different types of taxes such as individual income tax, corporate income tax, wealth tax, retail sales/value added/goods and services tax, selective excises, property tax, minimum taxes such as the minimum alternate tax (MAT), cash-flow tax, financial transactions tax, fringe benefits tax, customs duties and export taxes, environment tax and global carbon tax, and user charges. An emerging concern regarding the inadequacy of international taxation of multinational corporations is covered in some detail. Structural aspects of tax administration are given particular attention.