Federal deductibility for state and local taxes constitutes one of the largest tax expenditures in the federal budget and provides a significant source of federal support to state and local governments. Deductibility was restricted in the Tax Reform Act of 1986 by removing the deduction for...

This paper provides careful estimates of the impact of removing the deductibility of state and local taxes by state andby income class. We show how deductibility affects marginal and average tax rates for both state and federal tax systems. One striking result is that combined federal income tax...

This article examines how to treat human capital -- perhaps the vast majority of the capital stock -- under an ideal, Haig-Simons income tax. Innate ability, investments in human capital, and uncertainty in future earnings are considered. It is demonstrated that conventional income tax treatment...

The trends in executive pay and labor income tax rates since the 1940s suggest a high elasticity of taxable income with respect to tax policy. By contrast, the level and structure of executive compensation have been largely unresponsive to tax incentives since the 1980s. However, the relative...

The first section of this paper introduces the topic. The next section shows that many parallel tax systems share common features and constructs a general model of the cost of capital based on the Hall-Jorgenson (1967) cost of capital formula. Section 3 presents conditions under which a parallel...

Americans now work 50 percent more than do the Germans, French, and Italians. This was not the case in the early 1970s when the Western Europeans worked more than Americans. In this paper, I examine the role of taxes in accounting for the differences in labor supply across time and across...

The two main workhorses of state tax systems are levies on sales and individual incomes. In this paper we develop and implement a coherent methodology for characterizing these systems. The measures thus generated are used to show how the various systems differ across states, and how they evolved...

Whether personal income tax deductions are appropriate refinements to the concept of income or unwarranted tax expenditures continues to be the subject of debate. The casualty loss and medical expense deductions are frequently justified on the ground that ability to pay is reduced by largely...

The evidence presented in this paper supports the basic theoretical presumption that state and local governments cannot redistribute income. Since individuals can avoid unfavorable taxes by migrating to jurisdictions that offer more favorable tax conditions, a relatively unfavorable tax will...

A notable feature and principal virtue of Tax by Design is its system-wide perspective on different elements of the tax system. This review essay builds on this trait and offers a more explicit foundation for the report's general approach, drawing on a distribution-neutral methodology that is...