Estimating Both Supply and Demand Elasticities Using Variation in a Single Tax Rate with General Equilibrium Spillovers

2021 ◽  
Author(s):  
Christopher Luke Watson
Keyword(s):  
General Equilibrium ◽  
Supply And Demand ◽  
Tax Rate ◽  
Demand Elasticities ◽  
Single Tax

Estimating Both Supply and Demand Elasticities Using Variation in a Single Tax Rate

Econometrica ◽  
2018 ◽  
Vol 86 (2) ◽  
pp. 763-771 ◽  
Author(s):  
Floris T. Zoutman ◽  
Evelina Gavrilova ◽  
Arnt O. Hopland
Keyword(s):  
Supply And Demand ◽  
Tax Rate ◽  
Demand Elasticities ◽  
Single Tax

scholarly journals Victory Tax: A Holistic Income Tax System

Entropy ◽  
2021 ◽  
Vol 23 (11) ◽  
pp. 1492
Author(s):  
Donald J. Jacobs
Keyword(s):  
Income Tax ◽  
Free Market ◽  
Poverty Line ◽  
The United States ◽  
Effective Tax Rate ◽  
Tax System ◽  
Tax Rate ◽  
Single Tax ◽  
Government Transfer ◽  
Log Normal

How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

Equilibrium with Constant Returns

2011 ◽  
Author(s):  
Yves Balasko
Keyword(s):  
General Equilibrium ◽  
Equilibrium Model ◽  
Convex Cone ◽  
Supply And Demand ◽  
Returns To Scale ◽  
Price System ◽  
Production Sector ◽  
The One ◽  
Constant Returns To Scale ◽  
Privately Owned

This chapter analyzes an equilibrium model where privately owned firms feature either smooth decreasing or constant returns to scale. Profit of the constant returns to scale firms being equal to zero at equilibrium, the equilibrium of the model does not depend on the ownership structure of these firms. In addition, the convex conical production sets of these firms sum up into a convex cone. It is as if the production sector operating under constant returns consists of a unique firm. The general equilibrium model with decreasing and constant returns to scale firms is essentially the same model as the one considered in Chapter 10 with the addition of a unique firm operating under constant returns to scale. Nevertheless, this addition is enough to hamstring the approach of the preceding chapters based on the concept of price system that equates aggregate supply and demand. The solution is to add to that price system the activity of the constant returns to scale firm.

scholarly journals An evaluation of the revenue side as a source of fiscal consolidation in high debt economies

2014 ◽  
Vol 41 (6) ◽  
pp. 771-788
Author(s):  
Ritwik Banerjee
Keyword(s):  
General Equilibrium ◽  
Tax Rates ◽  
Consumption Tax ◽  
Policy Makers ◽  
Revenue Generation ◽  
Content Type ◽  
Tax Rate ◽  
Labor Tax ◽  
Capital Tax ◽  
European Economies

Purpose – Unsustainable levels of debt in some European economies are causing enormous strain in the Euro area. Successful debt consolidation in high-debt economies is the single most important objective for the European policy makers. The paper aims to discuss these issues. Design/methodology/approach – The author uses a dynamic general equilibrium closed economy model to compute the dynamic Laffer curves for Portugal, Ireland, Greece and Spain for different class of taxes. The general equilibrium effects of the interaction of labor tax, consumption tax and capital tax is demonstrated. Findings – Location of each economy on its Laffer curve suggests that there exists a scope for considerable revenue generation by raising consumption and labor tax rates but no such possibilities exist for capital tax rate. Thus revenue generation with certain tax rates as instruments, holds key to successful and sustained debt reduction. Originality/value – This to the best of knowledge is one of the first papers which looks closely at the tax revenue – tax rate panel for the major deeply indebted European economies.

scholarly journals THE EVOLUTION OF TAXES AND HOURS WORKED IN AUSTRIA, 1970–2005

2014 ◽  
Vol 19 (8) ◽  
pp. 1800-1815 ◽  
Author(s):  
John T. Dalton
Keyword(s):  
General Equilibrium ◽  
Growth Model ◽  
Labor Income ◽  
Marginal Tax Rate ◽  
Hours Worked ◽  
Tax Rate ◽  
Time Period ◽  
Working Age ◽  
Equilibrium Growth

Aggregate hours worked per working-age person decreased in Austria by 25% from 1970 to 2005. During the same time period, taxes increased, particularly the effective marginal tax rate on labor income. Using a standard general equilibrium growth model with taxes, I quantitatively assess the role played by the evolution of taxes in the evolution of hours worked in Austria. The model accounts for 76% of the observed decrease in hours worked per working-age person. My results are in line with other studies, which find taxes play an important role in explaining aggregate hours worked.

scholarly journals A Model of the Interaction of Health and Healthcare for the Wellbeing of Heterogeneous Individuals

2021 ◽  
Author(s):  
◽  
Anita King
Keyword(s):  
Public Health ◽  
Social Welfare ◽  
General Equilibrium ◽  
Inequality Aversion ◽  
Public Healthcare ◽  
Tax Rates ◽  
Health Production ◽  
Tax Rate ◽  
Health Level ◽  
The Government

<p>A model is proposed here to investigate how the relationships between health, production, and wellbeing contribute to the achievement (or otherwise) of potential government objectives. This model uses a basic general equilibrium framework with heterogeneous individuals and two goods (healthcare and other). Public health and publically and privately provided healthcare affect health level, which in turn affects productivity. Several different potential objectives of the government agent are investigated, which determine the distribution of public healthcare. The model is solved numerically to understand the effects of the choices of government objectives including the level of inequality aversion and varying tax rates. For governments with high inequality aversion that maximise social welfare from utility, a non-zero tax rate may be optimal, even with high levels of public health.</p>

scholarly journals Restructuring the European VAT tax system: advantages and disadvantages of the adoption of a single-rate model - a study based on the Portuguese case

2019 ◽  
Vol 8 (2) ◽  
pp. 145-160 ◽  
Author(s):  
Ricardo Moraes e Soares ◽  
João Ricardo Catarino
Keyword(s):  
Statistical Tests ◽  
Tax Compliance ◽  
Point Of View ◽  
Tax Rate ◽  
Eu Member States ◽  
Goods And Services ◽  
Advantages And Disadvantages ◽  
Single Tax ◽  
Efficient Data

The common VAT system adopted by EU member states comprises a set of various rates, which differentiate the goods and services subject to this tax. However, from a technical and management point of view, it would be preferable to adopt a single tax rate as it reduces distortions and facilitates tax compliance and management. This research seeks to analyse the benefits and disadvantages of adopting a single VAT as a means of simplifying the European VAT model. It takes Portugal as a case study. The main objective of this research is to contribute to the academic debate around the theme of the single rate of VAT versus differentiated rates, through the achievement of a series of analyses and statistical tests to revenues and percentages of GDP that they correspond, in the three scenarios considered in the study: differentiated rates, single rate of 17% and single rate of 21%.In the empirical part, hypotheses were developed, the effects on tax revenue of a differential collection system were analyzed and compared to a possible single rate regime on consumption to verify which one would be more efficient. data comparison permits to verify that the estimated revenue of the single rate of VAT is higher than the values ​​obtained by the system of differentiated rates, in any of the proposed models (17% or 21%). The results of this research are valid for all countries that adopt VAT or general tax transactions.

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