OPTIMAL TAXATION AND SOCIAL NETWORKS

2013 ◽  
Vol 18 (8) ◽  
pp. 1683-1712 ◽  
Author(s):  
Marcelo Arbex ◽  
Dennis O'Dea
Keyword(s):  
Social Network ◽  
Labor Supply ◽  
Job Search ◽  
Income Tax ◽  
Optimal Taxation ◽  
Social Activities ◽  
Employment Level ◽  
Tax Rate ◽  
Job Information ◽  
Capital Tax

We study optimal taxation when jobs are found through a social network. The network determines employment, which workers may influence by engaging in social activities. The network parameters play an important role in determining the economy's employment level and the optimal income tax. The optimal labor income tax depends on both the traditional intensive margin of labor supply and a new extensive margin that depends on the structure of the social network. Social activities that promote social connections are instrumental to acquiring job information; taxation thus discourages both social activities and labor supply, reducing employment. Labor taxes vary positively with labor supply and negatively with employment. When networking is absent, taxes are higher and the economy's employment rate is lower. The optimal capital tax rate is zero, independent of labor market frictions. Social networking reduces job search frictions and is welfare-enhancing.

scholarly journals Laffer Curves and Home Production

2017 ◽  
Vol 2017 (1) ◽  
pp. 59-69
Author(s):  
Mauri Kotamäki
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Private Consumption ◽  
Home Production ◽  
Consumption Tax ◽  
Tax Base ◽  
Tax Rate ◽  
Related Literature ◽  
Laffer Curve ◽  
Laffer Curves

Abstract In the earlier related literature, consumption tax rate Laffer curve is found to be strictly increasing (see Trabandt and Uhlig (2011)). In this paper, a general equilibrium macro model is augmented by introducing a substitute for private consumption in the form of home production. The introduction of home production brings about an additional margin of adjustment – an increase in consumption tax rate not only decreases labor supply and reduces the consumption tax base but also allows a substitution of market goods with home-produced goods. The main objective of this paper is to show that, after the introduction of home production, the consumption tax Laffer curve exhibits an inverse U-shape. Also the income tax Laffer curves are significantly altered. The result shown in this paper casts doubt on some of the earlier results in the literature.

scholarly journals Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities

2014 ◽  
Vol 6 (1) ◽  
pp. 230-271 ◽  
Author(s):  
Thomas Piketty ◽  
Emmanuel Saez ◽  
Stefanie Stantcheva
Keyword(s):  
Economic Growth ◽  
Labor Supply ◽  
Empirical Evidence ◽  
Optimal Taxation ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Tax Rate ◽  
Ceo Pay ◽  
And Performance ◽  
Zero Sum

This paper derives optimal top tax rate formulas in a model where top earners respond to taxes through three channels: labor supply, tax avoidance, and compensation bargaining. The optimal top tax rate increases when there are zero-sum compensation-bargaining effects. We present empirical evidence consistent with bargaining effects. Top tax rate cuts are associated with top one percent pretax income shares increases but not higher economic growth. US CEO “pay for luck” is quantitatively more prevalent when top tax rates are low. International CEO pay levels are negatively correlated with top tax rates, even controlling for firms' characteristics and performance. (JEL D31, H21, H24, H26, M12)

scholarly journals The optimal top marginal tax rate: Application to Hungary

2013 ◽  
Vol 2 (2) ◽  
pp. 100 ◽  
Author(s):  
Aron Kiss
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Income Taxation ◽  
Actual Rate ◽  
Personal Income Tax ◽  
Marginal Tax Rate ◽  
Optimal Income Taxation ◽  
Tax System ◽  
Tax Rate ◽  
Recent Developments

The paper applies recent developments in the theory of optimal income taxation to the Hungarian personal income tax system. The main conclusion is that the optimal top marginal tax rate in Hungary is likely to be higher, perhaps substantially, than the actual rate. It is discussed how this result depends on the parameters describing labor-supply behavior, the income distribution, and the redistributive preferences of society.

Optimal Taxation of Families: Mirrlees meets Becker*

2021 ◽  
Author(s):  
Musab Kurnaz
Keyword(s):  
Quantitative Analysis ◽  
Income Distribution ◽  
Income Tax ◽  
Optimal Taxation ◽  
Tax Credits ◽  
Child Rearing ◽  
Welfare Gains ◽  
Us Economy ◽  
Parental Time ◽  
The Us

Abstract This paper studies optimal taxation of families—a combination of an income tax schedule and child tax credits. Child-rearing requires both goods and parental time, which distinctly impact the design of optimal child tax credits. In the quantitative analysis, I calibrate my model to the US economy and show that the optimal child tax credits are U-shaped in income and are decreasing in family size. In particular, the optimal credits decrease in the first nine deciles of the income distribution and then increase thereafter. Implementing the optimum yields large welfare gains.

Taxation in a mixed economy: the case of China

2017 ◽  
Vol 34 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Davidson Sinclair ◽  
Larry Li
Keyword(s):  
Income Tax ◽  
Central Government ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Government Ownership ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Content Type ◽  
Tax Rate ◽  
For Profit

Purpose The purpose of this paper is to investigate how Chinese firms’ ownership structure is related to their effective tax rate. The People’s Republic of China provides an interesting environment to examine the corporate income tax. Government has significant ownership stakes in the for-profit economy and state-owned enterprises (SOEs) are liable to the corporate income tax. This is very different to most other economies where SOE tends to dominate the not-for-profit economy and pays no corporate income tax. Government ownership also varies between the central government and local government in addition to state asset management bureaus. This provides a rich institutional background to examining the corporate income tax. Design/methodology/approach A panel data analysis approach is used to examine relationship between ownership structure and effective tax rates of all public firms in China from 1999 to 2009. Findings The authors report that effective tax rates do appear to vary across the ownership types, but that SOEs pay a statistically higher effective tax rate than to non-state-owned. In addition, local government owned SOE pay higher effective tax rates than central government and SAMB owned SOE. The authors also investigate Zimmerman’s (1983) political cost hypothesis. Unfortunately, these results are econometrically fragile with the statistical significance of those results varying by empirical technique. Originality/value This paper provides insight into government ownership and taxation in China.

THE PECULIARITIES OF INDUSTRIAL ENTERPRISES’ PROFIT TAXATION IN A DIFFERENTIATED APPROACH

2021 ◽  
Vol 7 (2) ◽  
pp. 219-242
Author(s):  
Valeria B. DUBKOVA
Keyword(s):  
Optimal Taxation ◽  
Production Efficiency ◽  
Tax Rates ◽  
Effective Mechanism ◽  
Tax Rate ◽  
Surplus Value ◽  
Industrial Enterprises ◽  
Modern System ◽  
Economic Politics ◽  
Industrial Level

This article studies the problem of improving enterprise profit taxation, the ways to solve it, and one of the main problems of the modern system of the enterprises taxation — how it is connected to the production efficiency. By solving it, we can determine the differentiation of the tax rates to the enterprises’ profit. Within its methodological framework, the author proposes to use the theory of surplus value. In order to spread the global methods for solving the issues of improving the taxation profit of enterprises and ensuring the economic efficiency and growth, the principles of neoclassic marginal theory are used. The system of indicators — signs and criteria — provides evidence for differentiating industrial enterprises into groups for a more optimal taxation of their profits. The author provides suggestions for forming the rate of the profit tax to stimulate the increase of production efficiency and reinvestment of funds for its development. The algorithm for calculating the profit tax rate assumes using the index of the norms of surplus value — profitableness of labor. This article proposes using a matrix for classifying industrial enterprises into groups, defining the level of the tax rates to profit for each of them based on the developed algorithm together with the level of production efficiency for 2018. For industrial enterprises, special industrial level of indicators — the signs differentiation — are considered: the structure of capital, the standard of profit, the profitableness of labor, and the results of their profit taxation using the method of free balance, the normative method, the modern and the proposed tax profit systems. In the case of the industrial enterprises, the relevance of the proposed reforms of the taxation of profit is explained. The results of research constitute the methodological basis of developing a more effective mechanism of taxing enterprises’ profit, which is especially necessary when realizing anti-crisis economic politics.

Networking as a Job-Search Behavior and Career Management Strategy

2014 ◽  
Author(s):  
Monica L. Forret
Keyword(s):  
Social Networks ◽  
Social Network ◽  
Job Search ◽  
Management Strategy ◽  
Search Behavior ◽  
Career Management ◽  
Future Research ◽  
Job Seekers ◽  
Job Search Behavior ◽  
New Jobs

Networking is often cited as a key to job-search success; however, relatively little scholarly research on networking as a job-search behavior exists. The purpose of this chapter is to review the literature on networking and its relevance for job-search success and career management more broadly. The use of networking for both obtaining new jobs at different employers as well as advancing upward in one’s current organization is considered. This chapter describes the importance of networking for developing career competencies, how networking can enhance a job seeker’s social network, and barriers faced by women and minorities in building their social networks. The multiple ways in which networking has been measured are described, along with the antecedents and outcomes of networking behavior pertinent to job seekers. This chapter discusses the implications of networking as a job-search behavior for job seekers, career counselors, and organizations and concludes with future research suggestions for scholars.

scholarly journals Taxing Capital? Not a Bad Idea After All!

2009 ◽  
Vol 99 (1) ◽  
pp. 25-48 ◽  
Author(s):  
Juan Carlos Conesa ◽  
Sagiri Kitao ◽  
Dirk Krueger
Keyword(s):  
Income Tax ◽  
Labor Income ◽  
Income Shocks ◽  
Capital Income ◽  
Overlapping Generations Model ◽  
Cycle Structure ◽  
Tax Rate ◽  
Average Household Income ◽  
Optimal Capital

We quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks and permanent productivity differences of households. The optimal capital income tax rate is significantly positive at 36 percent. The optimal progressive labor income tax is, roughly, a flat tax of 23 percent with a deduction of $7,200 (relative to average household income of $42,000). The high optimal capital income tax is mainly driven by the life-cycle structure of the model, whereas the optimal progressivity of the labor income tax is attributable to the insurance and redistribution role of the tax system. (JEL E13, H21, H24, H25)

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