AWARENESS OF MARGINAL INCOME TAX RATES AMONG HIGH-INCOME TAXPAYERS

Abstract The 1988 federal and state income tax liabilities for hypothetical forest landowners in two federal income tax brackets, each with and without timber sale revenue, were calculated for the 14 southern states. At the medium income level, the state portion of total income tax liability(without timber sale revenue) ranges from 9% in Louisiana to 20% in North Carolina. With timber sale revenue, it ranges from 7% in Louisiana to 17% in North Carolina. At the high income level, the state portion of total income taxes (without timber sale revenue) ranged from 7% in Louisianato 16% in North Carolina, and with timber sale revenue, from 6% in Louisiana to 15% in North Carolina. Capital gains exclusions, deductions for federal income taxes, tax rates and schedules, standard deductions, and personal exemptions are the most important provisions for reducing state incometax liability. The installment sale method of reporting income was used as one alternative tax planning strategy for spreading timber sale revenue over a 2-year period. The purpose was to smooth cash flows and reduce the amount of income subject to higher marginal tax rates. Georgia taxpayerselecting the installment sale method of reporting in a hypothetical case saved $1,203 and $585 in total income taxes for the medium and high income levels, respectively. South. J. Appl. For. 13(4):196-203.

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Interregional Fiscal Equity and Benefit Transfers

Public Finance Quarterly ◽

10.1177/109114217400200102 ◽

1974 ◽

Vol 2 (1) ◽

pp. 25-42 ◽

Cited By ~ 1

Author(s):

Paul E. Smith

Keyword(s):

State Government ◽

Low Income ◽

Income Tax ◽

Transportation Problem ◽

Minimum Cost ◽

Revenue Sharing ◽

High Income ◽

Fiscal Equity ◽

Tax Rates ◽

Federal Income Tax

Over twenty years ago James M. Buchanan showed that serious horizontal inequities could exist in a federated system in the sense that residents of relatively low-income political subdivisions might receive lower benefits (net of taxes) from central and state government expenditures than people with the same income residing in high-income states. One possible solution offered was the imposition of discriminatory federal income tax rates with higher rates being charged in high-income states. This paper suggests an alternative solution in the form of federal transfers of benefits among states, either via conditional grants or revenue-sharing. The relative merits of the two approaches are discussed, and it is shown that the redistribution of benefits can be achieved at minimum cost by an application of the Hitchcock transportation problem.

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Tax Policy Reform and Economic Performance in New Zealand

Asian Economic Papers ◽

10.1162/asep.2007.6.2.79 ◽

2007 ◽

Vol 6 (2) ◽

pp. 79-108

Author(s):

Iris Claus

Keyword(s):

New Zealand ◽

Economic Performance ◽

Government Spending ◽

Income Tax ◽

International Standards ◽

Tax Rates ◽

Lower Income ◽

Long Run ◽

Productive Government Spending ◽

Income Taxpayers

New Zealand's tax system is relatively simple and transparent by international standards. But there may still be scope for reducing the costs of taxation. This paper develops a stylized model for New Zealand to evaluate the effects of reducing higher-income tax rates. The results suggest that a reduction in higher-income tax rates would improve New Zealand's long-run economic performance if it were financed by a decline in (non-productive) government spending and/or increases in revenue from other less distortional taxes. Despite the reductions in the higher-income tax rates, higher-income taxpayers would continue to pay a larger proportion of the tax burden than lower-income taxpayers.

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