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Questions tagged [taxation]

Refers to compulsory or coercive money collection by a levying authority, usually a government. The term "taxation" applies to all types of involuntary levies, from income to capital gains to estate taxes. Though taxation can be a noun or verb, it is usually referred to as an act; the resulting ...

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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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What is the maximum safe rate of VAT?

In university we've learned that there's a specific critical rate of VAT (%) going above which people stop tolerating it and it causes social unrests and other negative effects. What is that rate? ...
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Which countries impose family income taxation?

I'm looking for a comprehensive overview of international income tax systems (OECD countries would be sufficient), showing which countries apply some sort of family taxation, i.e. married partners ...
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Can infrastructure costs be covered by taxes on flat sales/rents?

Instead of describing the general question, let me give a concrete example. Suppose in a city they want to extend a metro line but they don't have enough budget for it. Could the city designate a ...
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Stiglitz has suggested that there is a global tax regime of twenty per cent to avoid arbitrage - what would it take to effect this?

Corporations/Multi-nationals are able to avoid their tax obligations by arbitraging across tax jurisdictions. Stiglitz has suggested a global tax rate of twenty per cent to close this particular loop-...
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Controlling capital flows across borders through accounting for tax paid

Is it possible for a state to limit offshore leakages by creating a sort of membrane around a nation, and stating that any money that moves out internationally, must be shown to have been taxed within ...
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Why use marginal rather than average tax rates in incentive analysis?

Why do tax analysts worry about marginal tax rates, not average effective rates, in looking for incentive effects of taxes
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98 views

How much to earn to break-even throughout life [on hold]

Firstly, my apologies if this isn't the right forum for this - I couldn't spot a better one! We are all born, pay taxes and die. Depending on where we live, those taxes will (hopefully) be used to ...
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Tax system is progressive or regressive

Let´s discuss a little! When the direct effect of a tax or transfer policy (compared to what would happen in the absence of the policy) is a reduction in inequality, it is called progressive policy. ...
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What is the definition of distributionally neutral tax?

On the website https://www.core-econ.org/ in the book provided, there is an exercise 19.10. It asks whether poll tax is progressive, regressive or distributionally neutral. To answer this question of ...
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How inflationary is progressive taxation?

Compared with, say minimum wage increases, how inflationary is progressive taxation?
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How important is “second best optimum” for the modelling and formulation of policy advice?

The standard formulation of second best theory is: if there is introduced into a general equilibrium system a constraint which prevents the attainment of one of the Paretian conditions, the ...
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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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if it isn't specified who pays the tax, can an indirect tax shift the demand curve down?

Just a little unsure as using the 'wedge analysis' gives the same results assuming supply and demand are the same elasticity
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Utility and consumption tax

If I have a model with taxes on consumption denoted $\tau$ should I write the utility function as $u(c)$ or $u((1-\tau)c)$? Thanks
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Is it better to tax only on what people spend?

I been recently pondering what might be the best tax system. I kept in mind that this tax system should have advantages for state, companies and for all people. Not people only. What I came up with ...
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38 views

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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Quantity supplied & demanded equation with tax

Here's the simple question I can't get my head around :( QD= 120-P QS= 2P-10 Tax= 25 euro per unit How much does the government receive?
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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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Wasn't Laffer Wrong?

The Laffer curve merely describes the relationship between tax rate and tax revenue. It assumes that workers are most motivated to make money when the rate is 0%. It also assumes that as the rate ...
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Measuring inequality at the zip code or county level in the United States?

I am trying to calculate a statistic for inequality at the zip code or county level in order to merge with another data set. I am using IRS SOI data, but the data given is returns by AGI bin (i.e., 1-...
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Are taxes supposed to be calculated depending on the seller, or the buyer?

We have a client that aims to ship his product internationally. (I think right now it mostly aims to be US and Canada, but the system would be open to people from all over the world to be bought) ...
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If US capital income taxation were eliminated, which ordinary income tax brackets would be equally progressive?

This question only considers federal taxes in the United States. Also, by "capital income" I am including dividends, interest, capital gains, corporate incomes and estates. The Chamley-Judd result ...
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Simultaneous consumption tax and subsidy

Suppose the government introduces a simultaneous tax and subsidy on a consumption good, which is produced under perfect competition. If the tax and the subsidy are equal, then there will be no ...
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The relationship between gross profit and tax

I tried to do following question but I am not sure about my solution. Please tell me your opinions Since gross profit is strictly concave, I can say that $R’’(y)-C’’(y) <0$ Now I maximize the ...
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Consumption Tax Effect

A country imposed a value-added tax of 7% on the consumption of the majority of its goods and services. Said government has a large and relentless govt budget ...
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220 views

Meaning of Transversality Conditions in Ramsey Problem

I'm working on a Ramsey problem for taxation, and am a little confused on the meaning/intuition behind the transversality conditions below: $\lim_{T \to \infty} \lambda_T b_{T+1} = 0$ $\lim_{T \to ...
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When people talk about “Companies Hiding Money Overseas” to avoid taxes, what does this really mean?

Presuming the consequence is holding cash somewhere else: I'm really interested in the objective effect of this from a global value creation perspective. I'm less interested in the money itself and ...
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28 views

Which one is most distortive?

Income tax, Poll tax, Land tax, or VAT? Georgist argue for land taxes. I think jizya is a form of poll tax. VAT? I don't know. I don't like income tax but can't really articulate why it's so bad. ...
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How did the Joint Committee on Taxation calculate the distribution of individual income tax rate increases for the Tax Cuts and Jobs Act of 2017

According to the Joint Committee on Taxation's JCX-68-17 Distributional Effects Of The Conference Agreement For H.R.1, The "Tax Cuts And Jobs Act", there will be a significant increase in income tax ...
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368 views

How does price-elasticity of supply affect the incidence of tax on consumer and producer

From what I've read only price-elasticity of demand (PED) (not price-elasticity of supply (PES)) affects the burden of tax on the consumer/producer. However, my graphs suggest PES does affect it. Why ...
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Difference between pigovian tax and sin tax?

Could they be interchangeably used? Or, is one subset of the other?
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3answers
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Incentive differences payroll and income tax

Do payroll and income tax create different incentives? Is there any difference at all economically speaking? I suppose different tax deductions and tax rates may or may not apply. If so, what ...
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Which economist suggested solely printing money to borrow and not have bonds?

I remember reading this really interesting idea by some economist that a government need not issue fixed-term debt such as bonds, notes or bills. Instead all it could do is print money and use it to ...
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calculating deadweight loss with wastage of tax

Consider an economy with 1000 identical consumers, each with a utility function given by $2\sqrt(x) + m $ , and 10 identical firms, each with a cost function given by $c(q)=aq$ , where $a$ is a ...
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Taxing a monopoly

can someone explain me why in some books the Demand and marginal revenue moves and but in other books is the marginal cost that moves. Is this like taxing the demand vs taxing the supply? so the ...
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What is this graph saying?

This is from: https://eml.berkeley.edu//~dromer/papers/RomerandRomer.pdf What does it mean that we are looking at a "tax increase of 1 % of GDP". What does a tax increase have to do with the GDP? If ...
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Which model produces the correct revenue-maximizing rate?

Model 1: The tax rate $\tau$ which maximizes tax revenue equals $\frac{1}{1 + a\epsilon}$ where $\epsilon$ is the elasticity of how taxable income responds to changes in the tax rate across and $a$ ...
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153 views

Can a spending freeze solve the problem of the Italian enormous government debt?

In view of the upcoming Italian general election, I've been reading the program of a party (please let me know in the comments whether I can/should mention its name), and in a section of it they ...
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Can companies fusion allow for avoiding VAT overhead?

Suppose there are two companies, one of which buys the second company's product as a resource to generate income. Now, that transaction would often require a payment of VAT tax (I assume there are ...
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How does stamp duty tax in Australia affect demand and supply of housing?

How would introduction of a stamp duty tax in Australia affect the demand and supply of housing? Would it shift the supply OR demand curve (and in which direction)? How would the market price change (...
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Elasticity of Substitution and Taxation

So I am trying to understand the impact of the elasticity of substitution in terms of taxation. I am carrying this out for the U.S. by firstly estimating a two-input CES production function. Chirinko (...
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Why is bartering uncommon in modern countries?

Recently, I witnessed two acquaintances of mine engaging in bartering, where one traded his services for the services of the other. Both services had about the same value. By trading them directly, ...
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Why some companies are reporting loss due to the new US tax law?

From http://uk.businessinsider.com/bank-of-america-fourth-quarter-earnings-q4-2018-1?r=US&IR=T: Like the other big banks, Bank of America took a hit from the recently enacted tax law, writing ...
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If Trickle Down Economics Works, Then Shouldn't “Trickle Up” Economics Work as Well?

A lot of controversy in economics on the political stage comes from trickle down economics and whether it even works or not. The idea is that if we give sufficient tax cuts to corporations, they'll ...
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Who really pays transaction taxes like VAT or sales tax?

In Europe, shop prices are typically displayed including VAT. This gives the impression that the seller is paying the VAT. They have to offer a competitive price, then a percentage of that is taken ...
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How did “excess liquidity” in the US contribute to the 2008 crash?

Here I'm using "excess liquidity" not in reference to monetary policy, but to the concentration of capital at the top in regard to private citizens. This excess liquidity, for which the tax cuts in ...
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What would happen to the US Economy if taxes exceed 20% of GDP

I am working on an idea for Tax Reform. With the Republican Plan being about as unpopular as ever I thought I might give it a shot and have friends and colleagues look over it. This is where I need ...
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What are the growth rates projected in the pending US Tax bill? (2017)

I haven't had time to get very granular on the pending US tax reform bill, but during the debates and drafting process, I was hearing some pretty big numbers being thrown around in terms of growth. (...
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What would be the effect on a tax on business cash flow instead of on income?

This came up in a pub discussion. (yes, it was good beer...) Suppose that instead of taxing companies on the net income they make, they were taxed at a much lower rate on cash flow, with no ...