The politics of taxing the rich: declining tax rates in times of rising inequality

This article proposes a method for integrating individual effective tax rates and marginal tax rates computed from a microsimulation (partial equilibrium) model of tax policy with a dynamic general equilibrium model of tax policy that can provide macroeconomic analysis or dynamic scores of tax reforms. Our approach captures the rich heterogeneity, realistic demographics, and tax-code detail of the microsimulation model and allows this detail to inform a general equilibrium model with a relatively high degree of heterogeneity. In addition, we propose a functional form in which tax rates depend jointly on the levels of both capital income and labor income.

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Class Altruism and Redistribution

The Economic Journal ◽

10.1093/ej/ueab022 ◽

2021 ◽

Author(s):

Christian Ghiglino ◽

David Juárez-Luna ◽

Andreas Müller

Keyword(s):

Income Tax ◽

The United States ◽

Tax Rates ◽

The European Union ◽

Main Factors ◽

Low Levels ◽

The Rich ◽

Other Regarding ◽

Other Regarding Preferences

Abstract Why do tax rates vary so much across countries? We study the role of other-regarding preferences and ethnic fragmentation in redistribution. A government is elected by altruistic voters and chooses a redistributive income tax. Altruism is directed toward social identity groups. Three main factors yield low levels of redistribution: (i) strong in-group altruism among rich voters—referred to as class altruism; (ii) weak universal altruism—in particular among the rich; and (iii) ethnic fragmentation among poor voters. We document survey evidence that the pattern of altruism in the United States and the European Union is consistent with the observed differences in taxes.

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THE COST OF DIRECT TAXATION ON INVESTMENT IN BRAZIL

Revista de Economia Contemporânea ◽

10.1590/198055272111 ◽

2017 ◽

Vol 21 (1) ◽

Author(s):

Nelson Leitão Paes

Keyword(s):

Tax Rates ◽

Marginal Tax Rate ◽

Effective Tax Rates ◽

Tax Rate ◽

Direct Taxation ◽

Economic Profit ◽

The Rich ◽

The Cost ◽

Rich Countries ◽

The Impact

ABSTRACT This paper analyzed the impact of taxation on the investment in Brazil, focusing on the taxation of corporate income. Following the literature, it was used an economic model to calculate two indicators of effective tax rates - Effective Marginal Tax Rate (EMTR) and Effective Average Tax Rate (EATR). The EMTR measures the increase of the cost of capital due to corporate income tax. The EATR represents a measure of the average tax rate levied on an investment that has a pre-defined economic profit. The results suggest Brazil may face some difficulties to attract foreign investment. The country presents high rates for EATR and EMTR, higher than the average of the rich countries and well above the figures of development countries like Chile, Mexico, South Africa, Russia and China, potential competitors in attracting investments.

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Investigation of Robin Hood Tax in Financial Crisis Periods and Analysis of Social State Policy in Taxation

Advances in Finance, Accounting, and Economics - Global Challenges in Public Finance and International Relations ◽

10.4018/978-1-5225-7564-1.ch006 ◽

2019 ◽

pp. 92-103

Author(s):

Doğan Bozdoğan

Keyword(s):

Financial Sector ◽

Tax Rates ◽

Social State ◽

Robin Hood ◽

The Public ◽

The Poor ◽

The People ◽

The Social ◽

The Rich ◽

Usage Area

Taxes cannot be denied in order to prevent financial crises and economic crises. In times of crisis, it is sometimes possible to intervene in these periods by decreasing the existing tax rates and sometimes by applying new taxes. The Robin Hood tax is based on the idea of giving it to the poor. According to this idea, the financial sector will be taxed in times of crisis and the tax burden that countries have to bear will be reduced. Moreover, the important point here is related to the usage area of the income derived from taxation of the financial sector. These taxes will be transferred directly to the public (i.e., to the people who suffer from the crisis). Thus, the idea of transferring from the rich to the poor will take place. In this chapter, the applicability of Robin Hood tax will be determined by considering the main features of the tax, and the tax will be examined before the social state principle. In this direction, the superior aspects of the said tax will be determined, and some suggestions will be made.

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The Case for a Progressive Benefits Tax

Taxation ◽

10.1093/oso/9780199609222.003.0009 ◽

2018 ◽

pp. 147-166

Author(s):

Barbara H. Fried

Keyword(s):

Middle Class ◽

Public Goods ◽

Market Price ◽

Tax Rates ◽

Marginal Rate ◽

The Public ◽

Rate Structure ◽

The Poor ◽

The Rich

Libertarians have long argued for a “benefits tax,” which sets tax rates to approximate the shadow market price for the public goods each taxpayer consumes. Libertarians have assumed that because consumption of explicit public goods does not rise as fast as income or wealth, a benefits tax would likely be regressive. That is to say, the rich would pay taxes at a lower marginal rate than the middle class and the poor. Chapter 8 argues that, contrary to the libertarian assumption, a benefits tax could yield almost any rate structure, including a quite progressive one, depending on the definition applied to “public goods” and the structure of the shadow market in which it is imagined polities operate.

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Who Bears the Burden of Federal Taxes in Pakistan?

The Pakistan Development Review ◽

10.30541/v24i3-4pp.497-509 ◽

1985 ◽

Vol 24 (3-4) ◽

pp. 497-509 ◽

Cited By ~ 1

Author(s):

Muhammad Hussain Malik ◽

Najam-Us- Saqib

Keyword(s):

Tax Rates ◽

Subsistence Level ◽

Effective Tax Rates ◽

Tax System ◽

Indirect Taxes ◽

Distribution Of Resources ◽

Present Distribution ◽

The Rich ◽

The Government ◽

Federal Taxes

The main objective of the tax system of a country is to generate enough revenue for the government, and it is always desired that taxes should be such that there is less burden on the poor and more on the rich. Such an attribute of the tax system becomes even more desirable for a country like Pakistan where the present distribution of resources is highly unequal and a large proportion of the population is living at the subsistence level. As in many other developing countries, in Pakistan also indirect taxes dominate in terms of their contribution to total tax revenue. It is argued that indirect taxes arc generally regressive since they arc levied on consumption, and people in the lower-income classes devote relatively greater proportion of their incomes to consumption. In this study, we have tried to estimate the incidence of the federal taxes on households in different income groups. We accomplished this by calculating effective tax rates (percentage of income contributed to taxes) for them.

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Why Do (Some) Ordinary Americans Support Tax Cuts for the Rich? Evidence From a Randomized Survey Experiment

10.31235/osf.io/chk9b ◽

2021 ◽

Author(s):

David Hope ◽

Julian Limberg ◽

Nina Sophie Weber

Keyword(s):

Tax Policy ◽

Reference Points ◽

Survey Experiment ◽

Tax Rates ◽

Policy Reforms ◽

Tax Rate ◽

Self Interest ◽

Federal Income Tax ◽

The Rich ◽

Tax Cuts

Why do (some) ordinary citizens support tax cuts for the rich? A prominent explanation in the political economy literature stresses the role of unenlightened self-interest. According to this view, citizens consistently fail to gauge whether they are directly affected by tax policy reforms. We use a randomized survey experiment in the US to identify the drivers of preferences for cutting taxes on the rich. The results show that informing individuals of whether they are directly affected by a cut in the top federal income tax rate has no impact on preferences. We therefore find no support for the unenlightened self-interest explanation. In contrast, we find preferences for taxing the rich are fundamentally affected by information that shifts citizens' core fairness beliefs, as well as information on the past trajectory of top tax rates. Our results therefore align with explanations of tax policy preferences that emphasize the importance of fairness perceptions and reference points.

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INDIVIDUAL INCOME TAX ON THE RICH

EKONOMIKA I UPRAVLENIE: PROBLEMY, RESHENIYA ◽

10.36871/ek.up.p.r.2021.04.04.009 ◽

2021 ◽

Vol 4 (4) ◽

pp. 45-53

Author(s):

G. N. SEMENOVA ◽

Keyword(s):

Russian Federation ◽

Income Tax ◽

Personal Income ◽

Annual Income ◽

Tax Rates ◽

Personal Income Tax ◽

Tax Rate ◽

Single Tax ◽

The Russian Federation ◽

The Rich

The article deals with the taxation of income of individuals with income tax. Income tax rates in different tax periods changed many times were progressive and depended on the size of the total annual income of individuals. Since 2001, with the adoption of the Tax Code of the Russian Federation, a single tax rate on personal income has been established in the amount of 13%. The coronavirus pandemic has impacted busi-ness activities as well as tax revenues. From January 01.01.2021, 15, an additional personal income tax rate of 5% has been established, which will affect the rich whose income will exceed 5 million rubles. The article exam-ines the foreign practice of taxing income of individuals.

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Poverty, Informality and the Optimal General Income Tax Policy

The B E Journal of Economic Analysis & Policy ◽

10.1515/1935-1682.3186 ◽

2012 ◽

Vol 12 (1) ◽

Author(s):

Marcelo Arbex ◽

Enlinson Mattos ◽

Christian Trudeau

Keyword(s):

Tax Policy ◽

Income Tax ◽

Tax Rates ◽

Absolute Poverty ◽

Relative Poverty ◽

Poverty Measure ◽

Marginal Tax Rates ◽

Income Tax Policy ◽

The Rich

Abstract This paper investigates the optimal general income tax and audit policies when poverty is considered a public bad in an economy with two types of individuals whose income may not be observed. Our results depend on whether poverty is measured in absolute or in relative terms. For a relative poverty measure, it is possible to characterize conditions under which both rich and poor agents face either positive, negative or zero marginal tax rates. There is distortion at the top as long as the rich can influence the welfare of the whole society through a measure of poverty and a distortion might be optimum to reduce aggregate poverty. Those that declare to be rich can be audited randomly, similar to their counterpart poor ones. Lastly, honesty may be punished as well as rewarded. With an absolute poverty measure, we replicate the results in the optimum tax literature, i.e., "no distortion and no auditing at the top".

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Poor and Hidden Among the Rich and Not So Rich

PsycCRITIQUES ◽

10.1037/a0004450 ◽

2006 ◽

Vol 51 (49) ◽

Author(s):

Patricia M. Berliner

Keyword(s):

The Rich

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