Policymakers are concerned about potential underinvestment in lifelong learning. In this paper we study to what extent a tax deduction helps to stimulate post-initial training. Specifically, we employ a regression kink and regression discontinuity design as jumps in tax bracket rates generate...

This theoretical contribution shows a simple way in which the quantity equation can be derived as a long-term equilibrium solution for the case of a closed economy and an open economy, respectively. It is shown first for the case of a closed economy which parameters stand behind "velocity" and...

The optimal mix of growth policies is derived within a comprehensive endogenous growth model. The analysis captures important elements of the tax-transfer system and takes into account transitional dynamics. Currently, for calculating corporate taxable income US firms are allowed to deduct...

Welfare programs are important for reducing poverty but create incentives for recipients to maximize their income by either reducing labor supply or manipulating taxable income. In this paper, we quantify the extent of such behavioral responses for the Earned Income Tax Credit (EITC) in the US....

We examine disparities in Child Tax Credit (CTC) eligibility and anti-poverty effects since 1998 by family type. Initially, single mothers were least likely to be eligible and were underrepresented among those lifted from poverty by the CTC, because the credit was virtually nonrefundable. By...

We examine whether democratic societies can escape poverty traps. Unrestricted agenda setting with simple majority rules fail to educate a society, because education-enhancing redistribution will not occur. We show that a combination of suitable constitutional rules overcomes this impossibility...

We study the effects of information on attitudes towards inheritance taxation using survey experiments fielded in Germany. We show that information about tax allowances increases demand for higher taxes and shifts public opinion from favoring abolition to supporting the tax. Effects are...

The evolution of the ratio of direct taxation (characterized by progressive rates) over indirect and payroll taxation (characterized by flat rates) is examined together with its distributional consequences for the Bottom 50%, Middle 40% and Top 10% shares of income. Oscillations of this ratio...

Canada's Youth Hires program was a targeted employment subsidy that rebated employment insurance premiums to employers with net increases in insurable earnings for youth aged 18-24. Using a difference-in-differences approach, in each of two datasets statistically and economically significant...

There exists a wide variety of tax treatments of pensions across the world. And the reasons for such a range of regimes are not clear. This note reviews the general principles of pension taxes and analyses the theoretical foundations of why pension incomes ought to be taxed specifically. To do...