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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 revenue is usually called "taxes."

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Arguments against inheritance tax

One of the arguments against inheritance tax is that it lowers the incentive to work for those close to retirement who have earnt enough money to be comfortable in old age. How much is this offset ...
christopherlovell's user avatar
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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 ...
BB King's user avatar
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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 ...
DukeZhou's user avatar
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3 answers
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Is loss in tax revenue a negative externality?

I was thinking about how online gambling could cause numerous governments to face a reduction in tax revenue from conventional gambling, upon which taxes do apply in most countries. If governments ...
PETER SIAUW's user avatar
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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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Effect of tax plus rebate on fuel consumption

I'm studying the Slutsky equation and an example in the text discusses the effect of a tax plus rebate on the consumption of fuel. Suppose the original price of fuel is $p$, tax is $t$, $x$ is the ...
AnotherJohnDoe's user avatar
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Do countries with high taxes end up with low government debt but high private debt?

I'm curious if my observation that some Scandinavian countries (Denmark, Sweden) have high taxes, low government debt, but high private (in particular high household) debt is applicable more generally ...
against very long user names's user avatar
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Using US foreign tax policy to offset a raise in interest rates

I am an amateur economist at best, more a person with an economic BS looking to explore data science (I will be using python). I have a theory that I want opinion on that will allow the Fed to raise ...
lost's user avatar
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"Wealth tax" on illiquid assets, how would people pay

In the idea of a wealth tax, or even for properties taxes, many times assets are illiquid. What mechanisms can be introduced to promote compliance and ensure the revenue collection goals of the taxing ...
CQM's user avatar
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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 ...
tparker's user avatar
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Book reference for graphs explaining ad valorem and specific taxes

Does anyone know any book in which I can read and see graphs about the ad valorem or specific tax in monopolies or perfect competition? I need a graph like this with the explanation but i can't find ...
Glohelt's user avatar
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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 = ...
EternalPropagation's user avatar
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672 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 ...
GeorgeSBF's user avatar
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Falling oil prices but no benefits passed on to the end user; government's strategy

Even though the oil prices have fallen rapidly in the recent years, the cost of petroleum products hasn't gone down in India. Apart from raising more revenue, what are the other benefits the ...
Yashas's user avatar
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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 ...
curious27's user avatar
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Hypothetical question: Percentage change in Federal income tax revenue in United States if Gini Index = 0?

Gini index = 0 refers to an economy where gross income has been redistributed so that all income earners in the United States received the same income, equal to the most current measure of the mean (...
RobertF's user avatar
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Example of countries restricting companies registered in tax havens?

I would like to know which countries do not allow companies with offices registered in tax havens to operate on their territory. And if there are such countries, to what degree their restrictions ...
Joe Jobs's user avatar
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Deadweight Loss Due to Taxes Represented on a Graph of the Market?

Let's say a market is operating at equilibrium, with MSB=MSC, and a tax is imposed on the market. This would shift the supply curve to the left and cause a deadweight loss represented by the triangle ...
johnsmith13579's user avatar
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1 answer
144 views

What would the consequences of an economy-wide 500EUR/tonne carbon tax be?

I recently calculated that Finnish car owners effectively pay 500 EUR per every tonne of carbon dioxide emitted from the tailpipe of a car. This payment is caused by three taxes that are in practice ...
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Economics of disparity in wages and in 'financial quality of life'

I am seeking a quantitavely and logically satisfying answer to the question I will outline below. It could be in a form of a book/article reference and ideally have as little ideological bias as ...
Pink and Floyd's user avatar
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Taxation in a general equilibrium framework

Is there a good reference on taxation theory in a general equilibrium framework? I am especially interested in the following questions. Is the equilibrium independent of who pays the taxes? Is the ...
kenji's user avatar
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Deriving the tax incidence formula -- what am I doing wrong?

I'm trying to derive the tax incidence for an excise $t$ so that producers receive $p$ and consumers pay $q=p+t$ per unit. The formula I am seeing everywhere is some version of $$ \frac{\mathrm{d}p}{\...
alcedine's user avatar
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2 answers
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Could a global tax agreement improve the Gini coefficient for income in all countries?

Does this line of reasoning make sense in terms of economic agents, even if implementation is highly unlikely? The Gini coefficient is an imperfect but reasonable measure of income inequality within ...
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What was the study that shows peoples' tax preferences shift when they get more information about their income?

I am trying to find a study I read a few years ago, but I forgot the names of the authors and the title of the study. I have already tried to search for the study on Google Scholar without much luck. ...
csilvia's user avatar
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A generations funds to reduce the debt

In Canada, the Province of Quebec created a generations fund in 2006 in order to reduce the debt. As of March 2023, Québec’s net debt stands at $206.8 billion, or 37.4% of GDP.. Do you know if any ...
Denis Pageau-Sociétalogue's user avatar
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Can I express the relation between the parameter from statutory tax rate and effective tax function(GS,1994) as equation?

Can I get the equation which express the relation between the parameters of statutory income tax and those of the effective tax function(by using data from the previous tax reform, counter factual ...
user_A's user avatar
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2 answers
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Impact of the corporate tax rate on the cost of equity (Modigliani & Miller Proposition II)

Consider Modigliani & Miller Proposition II with corporate taxes. The cost of equity is $$ R_E=R_U+(R_U-R_D)\cdot \frac{D}{E}\cdot (1-T_C) \tag{1} $$ where $R_E$ is the cost of equity, $R_U$ is ...
Richard Hardy's user avatar
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70 views

Simple DCF model with inflation and taxes - Why do inflation and taxes only matter jointly?

I'm putting together a simple discounted cashflow (DCF) model for a theoretical real estate investment. I think the model is correct, but I can't understand some of the results. The model is simply: $...
Tele's user avatar
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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(...
Franciscolli's user avatar
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Competitive markets, taxation and international trade

Suppose that in a competitive market, the supply function is given by $S(p) = 5000(p-2)$ and the demand function is given by $D(p) = 2000(16-p)$. Suppose still, that in order to recompose its' budget ...
Pedro Cunha's user avatar
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World Bank and OECD statistics unmatch tax revenue as % of GDP

I have been looking for statistics on tax revenue to GDP ratio of different countries. I've found it on World Bank website. https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?view=chart which ...
ultimatewizard's user avatar
1 vote
0 answers
18 views

What is the term for requiring taxes/regulatory changes to be above a certain threshold to overcome organisational communication barriers

Help remembering the specific term for the following would be very much appreciated! The following: When a government implements a tax/regulation that is too low in stringency, the new policy may not ...
Niall Patrick's user avatar
1 vote
0 answers
15 views

What quasi-experimental/econometric technique can I use to measure the impact of a policy using longtitudinal tax data?

I have two cohorts of workers with very similar characteristics (e.g. same demographic profile, skill level, industry) that were laid off at different points in time. Say one group was laid off ...
Nick's user avatar
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1 vote
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Is there a standard term for this tradeoff when subsidizing: inducing dependence vs providing support?

I've often heard it informally argued "people will become lazy if you give them handouts". Although I doubt the economic sophistication of most such assertions, I do think they have a real point: you ...
BoxBaron's user avatar
1 vote
0 answers
20 views

What would the price of carbon emissions need to be for the EU to achieve its objective to be carbon neutral by 2050?

The EU committed to net zero green house emissions by 2050. (Source) It is regularly said that the a carbon tax of USD 40-80 / t CO2e (USD 50-100 by 2030) would be sufficient to reach the Paris ...
sba222's user avatar
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Is there evidence that non-profits might have a tax or other competitive advantage in competing with for-profit corporations?

Lets say my non-profit's interest is to diminish co2 emissions in the city. Are there useful forms of putting that tax money for better use and gaining competitive advantage against other for-profit ...
Yos's user avatar
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1 vote
0 answers
26 views

Efficiency-related reason for net social benefits from income taxation

Found a question that I cannot really find an answer to. I am being asked to consider an economy with many households and assume that the government can only generate revenue by taxing households' ...
bajun65537's user avatar
1 vote
0 answers
80 views

Yang's Impact on Algorithmic Trading?

Presidential candidate Andrew Yang has published the following policy proposals on his website: 1. FINANCIAL TRANSACTION TAX Financial markets have grown dramatically over the past decades. ...
user23846's user avatar
1 vote
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Does the contractionary monetary effect of tax conpensate for its deadweight loss?

We all know that if the government impose a tax on a product, then tax revenue is less than loss in consumer and producer surplus. This is known as deadweight loss. We also know that taxing is a ...
Ma Joad's user avatar
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Optimal Tax Rates on BGP

I was going through this paper by Aghion et al. I wanted some clarification on some of the computations. I understood the process uptil the normalization on page 22. Then we can get some policy rules ...
Hariharan's user avatar
1 vote
0 answers
41 views

Can a government invest in public companies so their dividends can finance the government

Is it possible that a country could use the money in its sovereign wealth fund to invest in different country's Stock Market and use the dividends to finance its government thus increasing spending ...
Rudrangshu's user avatar
1 vote
0 answers
81 views

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 ...
user3010894's user avatar
1 vote
0 answers
23 views

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 $a$ ...
Makei's user avatar
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1 vote
0 answers
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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 ...
Sherwood Botsford's user avatar
1 vote
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83 views

Why does everything get more expensive as cities grow in density/size?

I have long wondered why groceries, rent, and especially cially taxes increase as cities get larger since the cost per capita goes down, at least according to everything I've read including a summary ...
Clay Nichols's user avatar
1 vote
2 answers
109 views

What are the evasion/avoidance rates for transaction taxes that have been implemented elsewhere & how does this compare with more traditional taxes?

Alternatively, The introduction of Single Transaction Tax would help to curb out Tax Evasion & Black Money? The Arthakranti (a NGO working on Economic Reform in India) suggests the proposal of Tax ...
CrownedEagle's user avatar
1 vote
0 answers
31 views

Do across-the-board tax breaks increase wealth if wealth is relative?

So, as I understand it, the value of one's money is in its purchasing power, and its purchasing power is related to its amount relative to others. That is to say: Earning 25k a year in a country ...
roberttdev's user avatar
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Hyperinflation of debt/taxes

I assume that if you owed a large amount of money (including back taxes) in say 1920s Germany, the hyperinflation they experienced made paying off the debt very easy. Or did Germany (or other ...
releseabe's user avatar
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in demand curve tax on buyer shouldnt it be movement along the graph?

if buyer has the burden of tax it shift the demand curve but tax comes under(according to me) in Price of the good so shouldnt it be movement along the graph this is the reasoning in my reading for ...
user45956's user avatar
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What unforeseen consequences would arise from poor and rich employee taxes?

A poor-employee$^1$fee is a tax on businesses who pay their employees and contractors below some pre-determined, annually adjusted, hourly rate hereafter called the target minimum wage. At ...
user121330's user avatar