scholarly journals Optimal tax rates and tax design during systemic reform

1997 ◽  
Vol 63 (2) ◽  
pp. 177-206 ◽  
Author(s):  
David M Newbery
Keyword(s):  
Systemic Reform ◽  
Tax Rates ◽  
Optimal Tax ◽  
Tax Design

Welfarism, Libertarianism, and Fairness in the Economic Approach to Taxation

Taxation ◽  
2018 ◽  
pp. 37-59 ◽  
Author(s):  
Marc Fleurbaey
Keyword(s):  
Income Taxation ◽  
Fair Allocation ◽  
Tax Rates ◽  
Economic Approach ◽  
Skilled Workers ◽  
Absolute Priority ◽  
Optimal Tax ◽  
Low Incomes ◽  
Utilitarian Approach ◽  
Selection Of

The economic theory of income taxation has recently been eager to apply philosophically prominent approaches to the selection of the optimal tax on earnings. This chapter presents and compares the consequentialist–utilitarian approach to taxation developed by Mirrlees and defended by Murphy and Nagel, to the fair allocation approach, as adapted to taxation problems by Fleurbaey and Maniquet. The fairness approach does retain an element of libertarianism and gives some value to market earnings. The two approaches have different recommendations for taxation, especially regarding low incomes, which are given absolute priority under the fairness approach, and may be submitted to lower tax rates out of respect for the diversity of preferences among the least skilled workers.

scholarly journals Optimal Alcohol Taxes for Australia

2012 ◽  
Vol 15 (2) ◽  
Author(s):  
James J. Fogarty
Keyword(s):  
Relative Price ◽  
Alcoholic Beverages ◽  
Tax Rates ◽  
Tax Rate ◽  
Excise Tax ◽  
Beverage Type ◽  
Optimal Tax ◽  
Pure Alcohol ◽  
Price Responsiveness ◽  
Current Alcohol

The 2010 Australian government tax review suggested Australia move to a uniform excise tax rate for all alcoholic beverages. Here, a model is presented and calibrated that shows the optimal per litre of pure alcohol (LAL) tax rates for beer, wine, spirits, and ready-to-drink spirits are substantially different to both current alcohol tax rates and the uniform tax rate recommended by the tax review. Specifically, given an individual consumer utility model, the best estimate values of the welfare maximising LAL tax rates are: $37 for beer, $11 for wine, $50 for spirits, and $77 for ready-to-drink spirits. The variation in the optimal tax rate across beverage types flows from differences in the externality costs associated with the consumption of each beverage type, and differences in the proportion of moderate consumption and abusive consumption associated with each beverage type. In addition, it is shown that the optimal tax rates are influenced by the range of costs that are considered to be externality costs, and the relative price responsiveness of abusers and moderate consumers.

scholarly journals Optimal Tax Design and Enforcement with an Informal Sector

2009 ◽  
Vol 1 (1) ◽  
pp. 1-27 ◽  
Author(s):  
Robin Boadway ◽  
Motohiro Sato
Keyword(s):  
Informal Sector ◽  
Production Efficiency ◽  
Intermediate Goods ◽  
Formal Sector ◽  
Optimal Tax ◽  
Commodity Tax ◽  
The Government ◽  
Optimal Commodity ◽  
Tax Design

An optimal commodity tax approach is taken to compare trade taxes and VATs when some commodities are produced informally. Trade taxes apply to all imports and exports, including intermediate goods, while the VAT applies only to sales by the formal sector and imports. The VAT achieves production efficiency within the formal sector, but, unlike trade taxes, cannot indirectly tax profits. Making the size of the informal sector endogenous in each regime is potentially decisive. The ability of the government to change the size of the informal sector through costly enforcement may also tip the balance in favor of the VAT. (JEL E26, H21, H25)

Taxation of Couples under Assortative Mating

2014 ◽  
Vol 6 (3) ◽  
pp. 155-177 ◽  
Author(s):  
Alexander Frankel
Keyword(s):  
Assortative Mating ◽  
Optimal Taxation ◽  
Married Couples ◽  
Tax Rates ◽  
Optimal Tax ◽  
Marginal Tax Rates ◽  
Multidimensional Screening

I present a simple and tractable model of the optimal taxation of married couples, working off of the multidimensional screening framework of Armstrong and Rochet (1999). In particular, I study how the tax code varies with the degree of assortative mating. One result is that the “negative jointness” of marginal tax rates found in Kleven, Kreiner, and Saez (2007, 2009) for couples with uncorrelated earnings should be attenuated in the presence of assortative mating. When mating is sufficiently assortative, the optimal tax schedule is separable: an individual's taxes do not depend on his or her spouse's income. (JEL D82, H21, H24, J12)

Complexity of Personal Income Tax Design: An Index of Measurement

2009 ◽  
Vol 27 (2) ◽  
pp. 137-154
Author(s):  
Davide Tondani
Keyword(s):  
Income Tax ◽  
Quantitative Measurement ◽  
Personal Income ◽  
Tax Rates ◽  
Tax Structure ◽  
Personal Income Tax ◽  
Effective Tax Rates ◽  
Tax Exemptions ◽  
Gross Income ◽  
Tax Design

Abstract This article puts forward an index of complexity of personal income tax design. Deductions and tax exemptions, etc., are often linked to legal tax brackets in order to increase fairness in the distribution of tax burden. But increased fairness tends to make the tax structure less comprehensible to the non-perfectly informed taxpayer. The proposed index gives a quantitative measurement of the distortion between legal and effective tax rates along the gross income scale and allows for intertemporal and interspatial comparisons. An application of the index to Italian personal income tax concludes the article.

scholarly journals Casino Taxation in a Normative and Economic Context: the Case of Poland

2015 ◽  
Vol 16 (1) ◽  
pp. 23-37
Author(s):  
Małgorzata Magdalena Hybka
Keyword(s):  
Theoretical Background ◽  
Economic Context ◽  
Optimal Tax ◽  
Gambling Law ◽  
Gambling Activities ◽  
Scale Of Operation ◽  
Tax Design

AbstractThe aim of this article is twofold. First, it provides an overview of theoretical background of casino taxation. Second, it analyses the provisions of the Act regulating casino taxation in Poland and evaluates the consequences of the new Gambling Law in force since 2010. The first section of it discusses motives, outcomes and forms of casino taxation, taking into account inter alia the assumptions of optimal tax theory. It then deals with Polish regulations concerning the organisation of gambling in casinos and gambling tax design. The last section of the article analyses the scale of operation of Polish casinos, their revenues and the tax due on gambling activities.

scholarly journals Negative Marginal Tax Rates and Heterogeneity

2010 ◽  
Vol 100 (5) ◽  
pp. 2532-2547 ◽  
Author(s):  
Philippe Choné ◽  
Guy Laroque
Keyword(s):  
Income Distribution ◽  
Important Determinant ◽  
Opportunity Costs ◽  
Tax Rates ◽  
Numerical Illustration ◽  
Optimal Tax ◽  
Marginal Tax Rates ◽  
Work Opportunity

Heterogeneity is an important determinant of the shape of optimal tax schemes. This is shown here in a model à la Mirrlees. The agents differ in their productivities and opportunity costs of work, but their labor supplies depend only on a given unidimensional combination of these two characteristics. Conditions are provided under which marginal tax rates are everywhere nonnegative. This is the case when work opportunity costs are distributed independently of income. But one can also get negative marginal tax rates, in particular at the bottom of the income distribution. A numerical illustration is given, based on UK data. (JEL H21, H24, H31, J22)

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