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Do Household Finances Constrain Unconventional Fiscal Policy?

Baker, Scott R. - 2018

When the zero lower bound on nominal interest rate binds, monetary policy makers may lack traditional tools to stimulate aggregate demand. We investigate whether "unconventional" fiscal policy, in the form of pre-announced consumption tax changes, has the potential to meaningfully shift durables...

Persistent link: https://www.econbiz.de/10012908479

Tax Policy and Lumpy Investment Behavior : Evidence from China's Vat Reform

Chen, Zhao - 2019

We incorporate the lumpy nature of firm-level investment into the study of how tax policy affects investment behavior. We show that tax policies can directly impact the lumpiness of investment. Extensive-margin responses to tax policy are key to understanding the effects of different tax reforms...

Persistent link: https://www.econbiz.de/10012861224

Attention Variation and Welfare : Theory and Evidence from a Tax Salience Experiment

Taubinsky, Dmitry - 2016

This paper shows that accounting for variation in mistakes can be crucial for welfare analysis. Focusing on consumer underreaction to not-fully-salient sales taxes, we show theoretically that the efficiency costs of taxation are amplified by differences in underreaction across individuals and...

Persistent link: https://www.econbiz.de/10012984747

Lifecycle vs. Annual Perspectives on the Incidence of a Value Added Tax

Metcalf, Gilbert E. - 2021

This paper analyzes the steady state distribution of tax burdens of a Value Added Tax (VAT) in the United States using a lifetime perspective. In contrast to an annual snapshot perspective, I find that a VAT on total expenditures would be proportional over the lifetime. Various modifications to...

Persistent link: https://www.econbiz.de/10013216116

Is a Value Added Tax Progressive? Annual Versus Lifetime Incidence Measures

Caspersen, Erik; Metcalf, Gilbert E. - 2021

We measure the lifetime incidence of a value added tax (V AT) using income data from the Panel Study of Income Dynamics (PSID) and consumption data from the Consumer Expenditure Survey (CEX). When annual income is used as a measure of economic well-being, a VAT looks quite regressive. However,...

Persistent link: https://www.econbiz.de/10013221868

Implications of the Covid-19 Pandemic for State Government Tax Revenues

Clemens, Jeffrey P. - 2020

We assess the Covid-19 pandemic's implications for state government sales and income tax revenues. We estimate that the economic declines implied by recent forecasts from the Congressional Budget Office will lead to a shortfall of roughly $106 billion in states' sales and income tax revenues for...

Persistent link: https://www.econbiz.de/10012829793

What Goes Up May Not Come Down : Asymmetric Incidence of Value-Added Taxes

Benzarti, Youssef - 2017

This paper shows that prices respond more to increases than to decreases in Value-Added Taxes (VATs). First, using two plausibly exogenous VAT changes, we show that prices respond twice as much to VAT increases than to VAT decreases. Second, we show that this asymmetry results in higher...

Persistent link: https://www.econbiz.de/10012947023

Capital Income Taxes and the Benefit of Price Stability

Feldstein, Martin S. - 2000

Going from low inflation to price stability involves a short term loss (associated with the" higher unemployment rate … required to reduce the inflation) and results in a series of welfare gains" in all future years. The primary source of these … gains is the reduction in the distortions that result" from the interaction of tax rules and inflation. The paper quantifies …

Persistent link: https://www.econbiz.de/10014158369

Taxation, Inflation, and Monetary Policy

Sheshinski, Eytan - 2021

provision of only a partial inflation-exclusion to assets for which it is feasible. The problem is examined in this paper by … means of a simple model of anticipated inflation, in which individuals may invest either in assets for which full or partial … inflation-exclusion is provided, or in cash, for which no loss offset is allowed. Among other issues, we shall examine the short …

Persistent link: https://www.econbiz.de/10013218550

Rebalancing and the Chinese Vat : Some Numerical Simulation Results

Chunding, Li - 2011

This paper presents numerical simulation results that suggest that China can both reduce its trade imbalance and receive welfare benefits by switching the value added tax (VAT) regime from the current destination principle to an origin principle. With the tax on exports exceeding that no longer...

Persistent link: https://www.econbiz.de/10013131504

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