In this article, we analyze a state-contingent tax on capital gains. We start by focusing on Auerbach's (1991) retrospective capital gains tax device. Although this system is equivalent to an accrual method from an ex-ante perspective, it is not on an ex-post basis. As recognized by Auerbach,...

In this note we model the individual decision on income underreporting in a system with a negative income tax. We show that a change in the tax rate has opposing effects on the compliance behavior of the poor and the rich.

In this note we model the individual decision on income underreporting in a system with a negative income tax. We show that a change in the tax rate has opposing effects on the compliance behavior of the poor and the rich.

The share of indirect taxes in tax revenues, specifically consumption taxes, is quite high in Turkey when compared to other OECD economies. This emphasis on indirect taxes in Turkey, as well as other developing economies, is argued to emerge from the inability of the government to collect direct...

We examine peer effects in a tax-evasion experiment where subjects receive either advice or compliance data from participants with either above-median or below-median compliance rates in a control treatment. Both types of information on peer behavior yield significantly lower compliance rates...

We assess the sustainability of the public finances of Greece, Ireland, Italy, Portugal and Spain (GIIPS), allowing for possible non-linearities in the form of threshold behaviour of the fiscal authorities. We provide some evidence of fiscal sustainability when debt gets “too highâ€...

This paper examines the rise of indeterminacy when public investment fiscal rules are implemented. The framework employed by our analysis is the standard endogenous growth model with productive public capital. The government can choose to invest in infrastructure according to two different...

The Japanese government has amassed a huge amount of gross public debts over the past several decades. However, previous empirical works dealing with vector auto-regression (VAR) have not considered the effect of debt on fiscal policy and the macro economy. In this paper, we incorporate debt...

Does the public believe that fiscal and monetary stimulus reduce unemployment? I present survey evidence on this question from a random sample of Pennsylvania residents. Few respondents express a consistently Keynesian view of fiscal or monetary stimulus. In fact, the typical respondent believes...

In this paper, we propose two alternative formulations of representative consumer¡¯s endogenous time preference that depends on consumption as well as wealth and/or revenue. We solve one of these formulations and apply it to study the effectiveness of fiscal policies in a small open economy...