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American states and Canadian provinces use formulas to allocate a multi-state company's national profit among the state-level jurisdictions. The formulas typically depend on the company's distribution of revenues and costs. In contrast, most countries allocate a multinational's global profit for...
Persistent link: https://www.econbiz.de/10014223865
There is a deadweight loss from imposing a tax on a single commodity, but there is no such loss from a uniform tax on all commodities with lump-sum return, and obviously no loss if no commodity is taxed. The object of this paper is to weave a consistent story relating these three well...
Persistent link: https://www.econbiz.de/10014155452
To minimize deadweight losses, tax rates should vary unpredictably so agents cannot rearrange their work and consumption habits. As a result, optimally set tax rates will be a nonstationary time series or, put differently, changes in the tax rate will be unpredictable. This paper identifies...
Persistent link: https://www.econbiz.de/10014156020
We examine the transitional dynamics of Lucas' supply side model of the US economy in order to specify the effects of capital taxation on economic growth and welfare. We restrict the analysis to policy plans characterized by constant capital taxes and require the government to maintain a...
Persistent link: https://www.econbiz.de/10014156338
Incomplete information is a commitment device for time consistency problems. In the context of time consistent labor income taxation privacy can lead to a Pareto superior outcome and increases the effectiveness of public education as a second best policy
Persistent link: https://www.econbiz.de/10014163655
This paper studies optimal Ramsey taxation when risk sharing in private insurance markets is imperfect due to limited enforcement. In a limited commitment economy, there are externalities associated with capital and labor because individuals do not take into account that their labor and saving...
Persistent link: https://www.econbiz.de/10014166216
We study optimal linear income taxation in a model with heterogeneous agents where earnings potentials are endogenously determined through human capital accumulation. Agents differ in initial conditions and ability to learn. Capital market imperfections prevent poor agents to invest optimally in...
Persistent link: https://www.econbiz.de/10014116794
We consider an overlapping generation framework with search and private information to study optimal taxation. Agents sequentially trade in markets that are characterized by different frictions and trading protocols. In frictional decentralized markets, agents receive shocks that determine if...
Persistent link: https://www.econbiz.de/10014120700
We study optimal long-run capital taxation in a closed economy with heterogeneity in agents' time-discount factors where borrowing is allowed but restricted by a collateral constraint. Financial frictions distort intertemporal optimization margins and the tax system serves a dual role: first, it...
Persistent link: https://www.econbiz.de/10014121267
In this study we calculate the optimal commodity tax structure for Brazil. The micro-simulations are based on a complete demand system estimated with a flexible functional form [Almost Ideal Demand System, by Deaton and Muellbauer (1980)]. The data source is a 1995/96 national household budget...
Persistent link: https://www.econbiz.de/10014121291