All Questions
Tagged with optimal-taxation taxation
26 questions
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Effects of an anti-trust tax
Suppose a corporate tax.
It is levied on publicly traded companies.
It is calculated as a percentage of the market capitalization of the company.
The market capitalization in question is the average ...
user49571
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Heuristics for the government revenue maximization problem
I suppose it is an established fact that increasing tax rates yields diminishing returns for government revenue.
From what I could gather, it is still an open question about the optimum point, though.
...
user49571
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Is it possible to abolish regressive taxes?
Is it possible for an economy and government to function without regressive taxes?
I believe this could severely restrict the tax base, but I am not sure if there could still be enough diversity ...
user49571
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References on another tax design
Suppose an inheritance cap of 1/3 per heir.
A rich couple would have its wealth divided at least by three at every death, at most multiplied by two at every marriage, and so on, therefore there would ...
user49571
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References on a tax design
Suppose a corporate tax.
It is levied on publicly companies.
It is calculated as a percentage of the market capitalization of the company.
The market capitalization in question is the average annual ...
user49571
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1
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Does a Homothetic Function with Respect to Consumption and Hours Worked Satisfy Certain Conditions in Fiscal Policy Models?
Proposition 3: If the utility function is homothetic with respect to consumption and hours worked, then the steady-state capital tax is zero.
Proof: This class of preference satisfies:
\begin{equation}...
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Ramsey Optimal Tax
Suppose there are $n$ goods ($x_i$ with prices $p_i$) to be taxed with a sequence of ad valorem taxes whose rates are given by $t_i$. The total tax revenue is $T = \sum_{i=1}^{n} t_ip_ix_i$. For a ...
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Set of implementable allocations (Overlapping Generations Models)
My question is from overlapping generations
$\Rightarrow$ I want to prove this part of the theorem
$\textbf{First}$ proceed by showing that the allocations in
a competitive equilibrium must satisfy(...
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Is there a consensus about the relationsship between tax rate and tax revenue?
I have been looking at these charts by the Mercator think tank which describe tax revenue and tax rate as percentage of GDP for the United States.
Mercator think tank
Is there a consensus about the ...
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How does intertemporal substitution affect the equivalence between cap-and-trade and carbon taxes?
It is often stated that, with perfect information and neglecting administrative burdens, the following two policies are economically equivalent:
a carbon tax of $T$ that results in a equilibrium ...
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Does Progressive Taxation Actually Follow The Decreasing Marginal Value of Wealth?
From my understanding, the application of a progressive income tax (increasing rate based on income level) follows from the assumptions of: "Equal Sacrifice" - everyone's "sacrifice&...
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Maximized tax revenue & foreign labor
I'm dealing with a tricky assignment, and I have no idea of where to begin.
Person 1 lives in Denmark and has a utility function given by,
$$(1) \ \ u(c,l)=c-\frac{\eta}{\eta+1}(24-l)^{\frac{\eta+1}{\...
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2
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Why tax investment?
I assume that investing is more useful than consuming for society as a whole, at least in the long run. But then why isn't the government taxing consumption more and investment less? This would create ...
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Would taxing money owned (as a share of purchasing power) be a better form of taxation?
Consider a nation whose money is entirely digital (like Bitcoin), but centralized (unlike Bitcoin). Furthermore, the total money supply is fixed, i.e. money cannot be created nor destroyed. To be ...
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Why do higher real interest rates increase land value?
I'm using this equation to calculate market value of land based on the levied land value tax:
y = market land value
x = land value tax
r = real interest rate
a = real time-independent land value
i = ...
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Why can't the Land-Value Tax (in some cases) be passed on to tenants?
According to https://en.wikipedia.org/wiki/Land_value_tax:
Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay,
That doesn't make any sense. If ...
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Aggregating in a Continuum
I am working with the following Economic model of labour and consumption decisions:
I have a population whose mass is normalized to one of consumers.
They derive utility from consumption $c$,...
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What at all justifies income taxes (as opposed to sales taxes only)?
For those who do not know, in America, the higher your income, the higher the percent of it is spent on taxes. This means that, whatever tax money is used for, those who are more hardworking (or, at ...
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The effect of structural unemployment on revenue from value added tax
Bill Gates and European countries have shown favor for consumption/VAT taxes. The arguments given by proponents are often something along the lines that "we know how to tax certain items more than ...
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Is corporate tax an argument in equal income tax (from labour and capital) debate and does the return on capital depend on rate of the corporate tax?
In our country we have 25% personal income tax on labour, 15% corporate tax on corporations and 10% personal income tax on income from capital (e.g. dividends). Pundits in our country are saying that ...
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2
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The United States' position on the Laffer Curve
According to a 2012 IGM panel (cf. reference below), most experts believe that a federal income tax cut would lead to a higher GDP in five years, ceteris paribus. Is this effect purely Keynesian, and ...
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What would be the economic impact of the "fair tax" plan?
So I read about an interesting proposal about completely replacing income tax with a heavy national sales tax of about 30% (23% inclusive to compare to income tax).
I was thinking about what the ...
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3
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Why are there estate taxes after the owner passes away?
Isn't it unfair for estates to be taxed after death? The person who bequeathed the estate probably purchased it with after tax money, so wouldn't it then be taxed twice? What is the purpose of the tax ...
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Difference-in-Differences on State Sales Tax Rates
In an attempt to evaluate a potential U.S. National Sales tax rate, it was suggested on this forum before that I consider a difference-in-differences on state sales tax rates before and after they ...
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Derivation on p.99 of Salanie, The Economics of Taxation (2nd edition)
Starting on p. 98 of Salanie's "The Economic of Taxation" (2nd edition), it explains
To probe it more rigorously, let us define the utility of taxpayer $w$ when he claims to have productivity $w'$:
...
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Equality, Taxes & Business Growth
First, I'm not an economist - just a regular Joe interested in a small part of the subject.
Second, I apologize if this is a better question for the 'politics' stack exchange, but I figured I might ...
