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."

Filter by
Sorted by
Tagged with
3
votes
1answer
81 views

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 net ...
2
votes
0answers
571 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 ...
1
vote
1answer
42 views

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 ...
1
vote
1answer
95 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. ...
1
vote
0answers
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 ...
1
vote
1answer
779 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 ...
1
vote
1answer
1k views

Difference between pigovian tax and sin tax?

Could they be interchangeably used? Or, is one subset of the other?
1
vote
3answers
96 views

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 ...
0
votes
2answers
88 views

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 ...
0
votes
1answer
409 views

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 ...
0
votes
1answer
40 views

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 ...
1
vote
0answers
18 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 $a$ ...
2
votes
1answer
192 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 ...
23
votes
4answers
9k views

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, ...
1
vote
2answers
97 views

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 ...
3
votes
5answers
616 views

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 ...
3
votes
1answer
159 views

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 ...
4
votes
0answers
24 views

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 ...
1
vote
0answers
30 views

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 ...
2
votes
1answer
138 views

How effective is progressive tax at regulating monopoly?

Regardless of the morality of progressive taxes, the economical benefit of progressive tax is at least debatable. But could a highly progressive tax replace at least some of the american/european anti-...
3
votes
1answer
137 views

Are there any economic reasons that could justify a higher tax rate on housing repairs than on construction of new houses?

In the UK, a builder constructing a new home need not add tax to the price charged, but a builder undertaking repairs or renovations to an existing home must add value added tax (VAT, currently 20%). ...
2
votes
2answers
264 views

Is printing money to pay government expenses regressive or progressive taxation?

Lets say that the government decides to pay some of its expenses by printing money*. This (according to some schools of thought) effectively increases the inflation rate and devalues the value of the ...
1
vote
1answer
55 views

Could a tax on rental income that depends on price per square meter induce more housing with lower rents?

The background of this question is: In Germany rental income is generally taxed the same as regular business income. In some cities, there seem to be housing shortages across different incomes. Are ...
0
votes
1answer
37 views

Which income dollar is taxed most heavily, including implicit taxation, in USA?

Income is often taxed implicitly by disqualifying deduction or government assistance. For example, if the recent proposal of "free tuition for kids of families making under \$125k" would pass the \$...
5
votes
4answers
267 views

Why do we use tax brackets?

Majority of countries (if not all) use tax brackets to define how much tax should the earning workforce pay. So we could have something like this. ...
4
votes
4answers
292 views

Tax by inflation

I am interested in a system where the state prints new money to cover all its expenses. (There is no direct tax collection.) I'm interested in anything you might have to say about this system, but to ...
1
vote
0answers
76 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 ...
1
vote
1answer
77 views

Why do we model that higher government involvement increases output?

I have just read about the "real intertemporal" model of a macroeconomy in Macroeconomics by Stephen Williamson. I am concerned about how it says any increase in government spending, even if it is ...
1
vote
1answer
25 views

UK: Is there a list published by the government for the amount of tax paid by companies?

I know of the website for data.gov which provides data but is a publicly available list of taxes paid by publicly own corporations like Apple? If not how do we know how much is paid by them?
-1
votes
1answer
82 views

Microeconomic Q on Total Revenue for Producer after Excise Tax [closed]

I had a question on how an excise tax per unit of good produced for a producer would affect total revenue for a producer of that good. The graph is that supply is perfectly elastic (horizontal) and ...
1
vote
0answers
63 views

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 Reform. In the proposal they suggest that All Taxes and Duties of Central ,State and Local body Government ...
1
vote
0answers
33 views

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 ...
-2
votes
2answers
158 views

Why can't direct taxes be passed on to the consumer? [duplicate]

What stops firms increasing prices of goods in the case of an increase of a direct tax such as corporation tax?
1
vote
1answer
41 views

:History: Industry threatening to leave if social change takes effect

With growing inequalities and salary gap, left-wing politicians are asking for social reforms in some countries (I am thinking of France). Social reform include: equal pay for women, maternity leave,...
3
votes
2answers
970 views

Is there an intuitive explanation for the tax incidence formula from elasticity?

You're probably familiar with the formula for tax incidence (in a standard Principles framework) from elasticity. Specifically, that the consumer share is $$\frac{\varepsilon_S}{\varepsilon_S+|\...
1
vote
3answers
211 views

Why is corporation tax regarded as a direct tax?

I understand that the classification of taxes is on ability-to-pay principle and is partly determined by the demand elasticity of the commodity or service. That's how I understand income tax is ...
5
votes
3answers
552 views

How can a country ensure its national currency is used by its citizens?

I am wondering how countries are able to force everyone to use its own currency, instead of some external currency (like the U.S. dollar or Bitcoin or cookies or something else not under government ...
2
votes
2answers
182 views

Could the upper quintile pay the annual federal personal income tax for all other quintiles from their annual income?

I am wondering if, in theory, the upper quintile (20% of earners in the U.S.) could pay the annual federal tax bill for all quintiles from their annual income? I have been looking at 2013 CBO data ...
0
votes
1answer
43 views

Fraction of labour force providing income redistribution services

What % of the labour force for an OECD country like the UK (mostly civil service I'm guessing) deals primarily with income redistribution, rather than income generation? Would a simple flat income tax ...
2
votes
2answers
1k views

Monopoly and Taxes (Nicholson Exercise)

Hello I'm working through Microeconomic Theory : Basic Principles and Extensions of Nicholson and Snyder 10e, for an exam and I fail to get how to answer this question (p.517) : A specific tax is a ...
1
vote
0answers
58 views

What is the actual amount of money lost to corporate tax evasion and avoidance in the UK? [closed]

I find this topic confusing, because there are so many figures out there from seemingly credible sources. You hear politicians using figures to either attack current policy or defend it. Many people ...
2
votes
0answers
46 views

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 ...
4
votes
1answer
83 views

Economic effects of a Commons Capital Depository

Yanis Varoufakis (Ιωάννης Βαρουφάκης) proposes to fund a universal basic income (UBI) using dividends from a commons capital depository, essentially channeling a percentage of shares issued at an ...
2
votes
2answers
110 views

Are there any drawbacks to a hypothetical climate policy?- Carbon tax for reducing Income tax

Disclaimer: I do not have a formal education in economics Here is the idea of my hypothetical policy: graduated over a period, say about 10 years or longer, the income tax is phased out and a carbon ...
1
vote
1answer
65 views

Is Canada a country of high taxation in international comparison?

Looking through Canada's culture section on wikipedia, it's described as having: Government policies such as publicly funded health care, higher taxation to redistribute wealth, the outlawing of ...
1
vote
3answers
140 views

How to tax the robots?

The Socialist candidate for the upcoming presidential elections Benoit Hamon says he wants to roll out the Universal Basic Income in France, to be paid by "taxing the wealth created by robots" (for ...
1
vote
2answers
419 views

Does lowering corporate tax rates increase investment or provide some other benefit to a nation? [duplicate]

In Australia at the moment there is a move to lower the top corporate tax rate from 30% to 25% or thereabouts. The reasoning is that the benefits from investment will outweigh the cost to the budget. ...
1
vote
2answers
408 views

How can we estimate the tax incidence from a 20% tariff on Mexican goods?

President Trump has proposed a 20% tariff on some Mexican imports to the US. Is there a good way to estimate the incidence of this proposal between the Mexican producers and American consumers, as ...
1
vote
1answer
55 views

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 ...
0
votes
2answers
40 views

Inelastic offer, tax paid by seller, who supports the charges

I have a small problem, I have a situation where we have a perfectly inelastic offer and a normal demand, then there is a tax that is paid by the supplier who supports the totality of the charges ? Is ...