Income Tax, Wage Tax, and Optimal Tax

1976 ◽  
Vol 4 (1) ◽  
pp. 3-15
Author(s):  
Eitan Berglas
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
High Income ◽  
Tax System ◽  
Wage Subsidies ◽  
Optimal Tax ◽  
Negative Income ◽  
Aggregation Problem ◽  
Wage Tax ◽  
Negative Income Tax

Recent studies find wage subsidies (WS) to be superior to negative income tax (NIT). However, these studies suffer from a serious aggregation problem. A model is suggested in which these aggregation problems are avoided. In this model there exists a WS schedule that increases labor supply compared with an equally costly NIT. However, the WS may be Pareto inferior. Furthermore, for high income workers given any income tax system it is always possible to find a wage tax system which both is Pareto superior and increases labor supply. The merits of the model and its implications for other optimal income tax studies are critically discussed.

The Labor-Supply Effects and Costs of Alternative Negative Income Tax Programs

1978 ◽  
Vol 13 (1) ◽  
pp. 3 ◽  
Author(s):  
Michael C. Keeley ◽  
Philip K. Robins ◽  
Robert G. Spiegelman ◽  
Richard W. West
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Negative Income ◽  
Negative Income Tax

Forecasting the Effects of a Negative Income Tax Program

ILR Review ◽  
1982 ◽  
Vol 35 (2) ◽  
pp. 221-234 ◽  
Author(s):  
Terry R. Johnson ◽  
John H. Pencavel
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Single Women ◽  
Married Women ◽  
Negative Income ◽  
Married Men ◽  
Supply Functions ◽  
Hours Of Work ◽  
The Hours ◽  
Negative Income Tax

This paper outlines a scheme that forecasts the change in net earnings or in hours worked that results from the introduction of a negative income tax (NIT) program. The authors illustrate this scheme by estimating labor supply functions for married men, married women, and single women who participated in the Seattle-Denver Income Maintenance Experiments. These functions are then used to simulate the effects of several NIT programs. The findings suggest that changes in the wage rate of an individual covered by an NIT program result in important changes in the hours of work of the individual's spouse.

An Agent-Based Simulation Model of the Economy: An Empirical Study of Negative Income Tax System in a Transition Economy

2011 ◽  
Vol 204-210 ◽  
pp. 718-723
Author(s):  
Xiang Yu Wan ◽  
Peng Jia
Keyword(s):  
Economic Growth ◽  
Simulation Model ◽  
Income Tax ◽  
Transition Economy ◽  
Computer Simulation Model ◽  
Tax System ◽  
Income Difference ◽  
Agent Based ◽  
Negative Income ◽  
Negative Income Tax

In this paper, we present an agent-based computer simulation model to analyze the dynamic relationship between economic growth and income difference in a transition economy and to evaluate the empirical effects of negative income tax system. Micro agents in the economy form the economic networks and enable the economy to evolve forward through the intelligential evolutionary system and mutual interactions between the agents. Based on the logical reasons of the transition economy, the model finally gives the results of the simulation: when the economy finishes rapid transition and enters into stable development, by implementing negative income tax system, government can effectively decrease income difference while at the same time maintain rapid economic growth.

Towards a Negative Income Tax System for Australia

1998 ◽  
Vol 31 (3) ◽  
pp. 237-257 ◽  
Author(s):  
Peter Dawkins ◽  
David Johnson ◽  
Rosanna Scutella ◽  
Gillian Beer ◽  
Ann Harding
Keyword(s):  
Income Tax ◽  
Tax System ◽  
Negative Income ◽  
Negative Income Tax
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