Does the effective labor income tax rate impact on the supply of human capital in China?—Based on the empirical evidence of provincial panel data

2014 ◽  
pp. 177-182
Keyword(s):  
Human Capital ◽  
Panel Data ◽  
Empirical Evidence ◽  
Income Tax ◽  
Labor Income ◽  
Tax Rate

scholarly journals Taxing Capital? Not a Bad Idea After All!

2009 ◽  
Vol 99 (1) ◽  
pp. 25-48 ◽  
Author(s):  
Juan Carlos Conesa ◽  
Sagiri Kitao ◽  
Dirk Krueger
Keyword(s):  
Income Tax ◽  
Labor Income ◽  
Income Shocks ◽  
Capital Income ◽  
Overlapping Generations Model ◽  
Cycle Structure ◽  
Tax Rate ◽  
Average Household Income ◽  
Optimal Capital

We quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks and permanent productivity differences of households. The optimal capital income tax rate is significantly positive at 36 percent. The optimal progressive labor income tax is, roughly, a flat tax of 23 percent with a deduction of $7,200 (relative to average household income of $42,000). The high optimal capital income tax is mainly driven by the life-cycle structure of the model, whereas the optimal progressivity of the labor income tax is attributable to the insurance and redistribution role of the tax system. (JEL E13, H21, H24, H25)

Green returns of labor income and human capital: Empirical evidence of the environmental behavior of households in developing countries

2019 ◽  
Vol 160 ◽  
pp. 105-113 ◽  
Author(s):  
Pablo Ponce ◽  
Rafael Alvarado ◽  
Katerine Ponce ◽  
Raquel Alvarado ◽  
Danny Granda ◽  
...  
Keyword(s):  
Developing Countries ◽  
Human Capital ◽  
Empirical Evidence ◽  
Environmental Behavior ◽  
Labor Income

TWO COMPUTATIONS TO FUND SOCIAL SECURITY

1997 ◽  
Vol 1 (1) ◽  
pp. 7-44 ◽  
Author(s):  
HE HUANG ◽  
SELAHATTIN İMROHOROGˇLU ◽  
THOMAS J. SARGENT
Keyword(s):  
Social Security ◽  
Income Tax ◽  
Physical Capital ◽  
Labor Income ◽  
Income Volatility ◽  
Public Provision ◽  
Tax Rate ◽  
Output Ratio ◽  
The Government ◽  
The Impact

We use a general equilibrium model to study the impact of fully funding social security on the distribution of consumption across cohorts and over time. In an initial stationary equilibrium with an unfunded social security system, the capital/output ratio, debt/output ratio, and rate of return to capital are 3.2, 0.6, and 6.8%, respectively. In our first experiment, we suddenly terminate social security payments but compensate entitled generations by a massive one-time increase in government debt. Eventually, the aggregate physical capital stock rises by 40%, the return on capital falls to 4.4%, and the labor income tax rate falls from 33.9 to 14%. We estimate the size of the entitlement debt to be 2.7 times real GDP, which is paid off by levying a 38% labor income tax rate during the first 40 years of the transition. In our second experiment, we leave social security benefits untouched but force the government temporarily to increase the tax on labor income so as gradually to accumulate private physical capital, from the proceeds of which it eventually finances social security payments. This particular government-run funding scheme delivers larger efficiency gains (in both the exogenous and endogenous price cases) than privatization, an outcome stemming from the scheme's public provision of insurance both against life-span risk and labor income volatility.

CREDIT FRICTIONS AND OPTIMAL LABOR-INCOME TAXATION

2018 ◽  
Vol 23 (07) ◽  
pp. 2845-2891
Author(s):  
Salem Abo-Zaid
Keyword(s):  
Income Tax ◽  
Income Taxation ◽  
Labor Income ◽  
Credit Constraint ◽  
Marginal Rate ◽  
Tax Rate ◽  
Marginal Rate Of Substitution ◽  
The Business Cycle ◽  
Credit Frictions ◽  
Labor Income Taxation

This paper studies optimal labor-income taxation in a simple model with credit constraints on firms. The labor-income tax rate and the shadow value on the credit constraint induce a wedge between the marginal product of labor and the marginal rate of substitution between labor and consumption. It is found that optimal policy prescribes a volatile path for the labor-income tax rate even in the presence of state-contingent debt and capital. In this respect, credit frictions are akin to a form of market incompleteness. Credit frictions break the equivalence between tax smoothing and wedge smoothing; therefore, as the tightness of the credit constraint varies over the business cycle, tax volatility is needed in order to counter this variation and, as a result, allow for wedge smoothing.

Poverty and Savings: Optimal Taxes with Endogenous Discount Factors

2019 ◽  
Vol 47 (5) ◽  
pp. 828-863
Author(s):  
Pier-André Bouchard St-Amant ◽  
Louis Perrault
Keyword(s):  
Income Tax ◽  
Labor Income ◽  
Tax Rate ◽  
Discount Factors ◽  
Present Bias ◽  
Lower Weight ◽  
Recent Developments ◽  
Optimal Linear ◽  
Future Consumption ◽  
Optimal Taxes

Following recent developments linking poverty to present-bias behavior, we conduct an optimal linear taxation analysis where some individuals (called “behaviorals”) have a discount factor that is a function of their disposable income. In the model, endogenous discount factors imply (1) that taxing labor decreases the valuation of savings and (2) that subsidies on savings mitigate for a lower weight being given to future consumption. We perform simulations where the number of behavioral individuals increases and find that resources raised through labor taxation are used to finance saving subsidies rather than an increase of transfers. The prevalence of behaviorals leads to an increase in the labor income tax rate.

scholarly journals How do tax progressivity and household heterogeneity affect Laffer curves?

10.3982/qe653 ◽  
2019 ◽  
Vol 10 (4) ◽  
pp. 1317-1356 ◽  
Author(s):  
Hans A. Holter ◽  
Dirk Krueger ◽  
Serhiy Stepanchuk
Keyword(s):  
Human Capital ◽  
Labor Market ◽  
Labor Supply ◽  
Income Tax ◽  
Labor Income ◽  
Tax Progressivity ◽  
Laffer Curve ◽  
Market Experience ◽  
The Government ◽  
The U.S

How much additional tax revenue can the government generate by increasing the level of labor income taxes? In this paper, we argue that the degree of tax progressivity is a quantitatively important determinant of the answer to this question. To make this point, we develop a large scale overlapping generations model with single and married households facing idiosyncratic income risk, extensive and intensive margins of labor supply, as well as endogenous accumulation of human capital through labor market experience. We calibrate the model to U.S. macro, micro, and tax data and characterize the labor income tax Laffer curve for various degrees of tax progressivity. We find that the peak of the U.S. Laffer curve is attained at an average labor income tax rate of 58 % . This peak (the maximal tax revenues the government can raise) increases by 7 % if the current progressive tax code is replaced with a flat labor income tax. Replacing the current U.S. tax system with one that has Denmark' s progressivity would lower the peak by 8 % . We show that modeling the extensive margin of labor supply and endogenous human capital accumulation is crucial for these findings. With joint taxation of married couples (as in the U.S.), higher tax progressivity leads to significantly lower labor force participation of married women and substantially higher labor force participation of single women, an effect that is especially pronounced when future wages of females depend positively on past labor market experience.

Sign in / Sign up

Export Citation Format

Share Document