Social and Behavioral Sciences Commons^™

Special Economic Zones In The United States: From Colonial Charters, To Foreign-Trade Zones, Toward Ussezs, Tom W. Bell

Tom W. Bell

Estimating Intensive And Extensive Tax Responsiveness: Do Older Workers Respond To Income Taxes?, Abby Alpert, David Powell

David Powell

Does Labor Supply Respond To Transitory Income? Evidence From The Economic Stimulus Payments Of 2008, David Powell

David Powell

Tax policy is often used to encourage consumer spending in recessions and a growing literature finds evidence that households increase short-term spending in response to receipt of tax rebates. The literature has largely ignored the effect on labor supply as rebates may crowd out labor earnings and households may consume additional leisure. The responsiveness of labor supply to transitory income has been underexplored more broadly so it is difficult to predict this labor supply effect. I exploit the randomized timing of the 2008 economic stimulus payments to study the effects of transitory income on monthly household labor earnings. Rebates can …

Do Payroll Taxes In The United States Create Bunching At Kink Points?, David Powell

David Powell

Much of the literature on labor supply responsiveness to taxes studies the effects of payroll and income taxes together, usually using income tax changes to identify effects. There is less research on how individuals respond to payroll taxes specifically. Given the salience of the payroll tax relative to other income taxes, it is possible that taxpayers respond differentially than income tax elasticities may suggest. Using data from the Social Security Administration, I exploit two recent short-term changes in payroll taxes to study whether labor earnings responded. The Making Work Pay Tax Credit reduced the payroll tax by 6.2 percentage points …

Polluters’ Profits And Political Response: Direct Control Versus Taxes: Comment, Robert S. Main, Charles W. Baird

Robert S. Main

In a recent issue of this Review, James Buchanan and Gordon Tullock (B-T) presented a public choice analysis of the relative merits of direct controls and taxes in externality control. In Section IV of their paper, B-T consider the case of reciprocal external diseconomies of consumption. They ask whether "... persons in this sort of interaction, acting through the political processes of the community, will impose on themselves either a penalty tax or direct regulation" (p. 143). Their analysis is carried out within the context of a two-person model in which each person consumes the same quantity of a good …

Higher Gasoline Taxes: Elitist Or Equitable?, Barry Bluestone, Stephanie Pollack

Stephanie Pollack

No abstract provided.

Higher Gasoline Taxes: Elitist Or Equitable?, Barry Bluestone, Stephanie Pollack

Barry Bluestone

No abstract provided.

Effects Of Ad-Valorem Taxes On Location Decision Under Free Entry Cournot Oligopoly, Yeung-Nan Shieh

Yeung-Nan Shieh

This paper examines the impact of the ad-valorem commodity tax as a policy device on the location decision of undifferentiated oligopolistic firms with free entry. It shows that: (1) When the distance between the plant location and the output market is held constant, the optimum location for the oligopolistic firm would be independent of the ad-valorem tax if the production function is homothetic, and (2) when the distance between the plant location and the output market is a decision variable, the optimum location for the oligopolistic firm will move closer to the output market if the demand function is linear …

Multiple Pollutants, Unovered Sectors, And Suboptimal Environmental Policies, Daniel Karney, Don Fullerton

Daniel H Karney

In our analytical general equilibrium model where two polluting inputs can be substitutes or complements in production, we study the effects of a tax on one pollutant in two cases: one where both pollutants face taxes and the second where the other pollutant is subject to a permit policy. In each case, we solve for closed-form solutions that highlight important parameters. We demonstrate two important ways that environmental taxes and permits are not equivalent. First, the change in the pollutant facing a tax increase depends on whether the other pollutant is subject to a tax or permit policy. Second, if …

Social Spending, Taxes And Income Redistribution In Uruguay, Maximo Rossi, Nora Lustig, Marisa Bucheli, Florencia Amabile

Maximo Rossi

How much redistribution does Uruguay accomplish through social spending and taxes? How progressive are revenue collection and social spending? A standard fiscal incidence analysis shows that Uruguay achieves a nontrivial reduction in inequality and poverty when all taxes and transfers are combined. In comparison with other five countries in Latin America, it ranks first (poverty reduction) and second (inequality reduction), and first in terms of poverty reduction effectiveness and third in terms of overall (including ransfers in kind) inequality reduction effectiveness. Direct taxes are progressive and indirect taxes are regressive. Social spending on direct transfers, contributory pensions, education and health …

Reducing The Drug War's Damage To Government Budgets, David B. Kopel, Trevor Burrus

David B Kopel

This Article examines ways that governments can mitigate the economic damage caused by the drug war. Part I details four specific legal reforms enacted in Colorado, which aim to reduce the problems of over-criminalization: Requiring a fiscal note for the creation of new statutory crimes; reducing drug possession from a felony to a misdemeanor; narrowing the scope of 'three strikes' laws, and; adjusting old sentences in light of new laws.

Part II explores the fiscal benefits of ending prohibition, such as reduced law enforcement costs and substantially increased tax revenues.

Part III analyzes the conflict between congressionally-imposed prohibition, and state …

Tax Wedges, Unemployment Benefits And Labour Market Outcomes In The New Eu Members, Alberto Behar

Alberto Behar

To what extent do priors about tax wedges, unemployment benefits and labour market outcomes apply to the new members of the EU? Principal Component Analysis (PCA) suggests the new members share similar characteristics to each other and should be grouped separately from the rest of Europe. There are statistically significant differences in the medians of unemployment benefits and the labour market outcomes of the less productive, but insignificant differences in prime-age outcomes and tax wedges. Within the new members, our non-parametric analysis finds tax wedges and the duration of benefits (not the replacement ratio) are associated with poor labour market …

Distributional Effects Of Environmental And Energy Policy: An Introduction, Don Fullerton

Don Fullerton

This chapter reviews literature on the distributional effects of environmental and energy policy. In particular, many effects of such policy are likely regressive. First, it raises the price of fossil-fuel-intensive products, expenditures on which are a high fraction of low-income budgets. Second, if abatement technologies are capital-intensive, then any mandate to abate pollution may induce firms to use more capital. If demand for capital is raised relative to labor, then a lower relative wage may also hurt low-income households. Third, pollution permits handed out to firms bestow scarcity rents on well-off individuals who own those firms. Fourth, low-income individuals may …

Death And Taxes, Including Inflation: The Public Versus Economists, Jeffrey Rogers Hummel

Jeffrey Rogers Hummel

Inflation worries the general public much more than it does the economics profession, and economists remain perplexed as to exactly why. The costs that concern economists are inflation’s deadweight loss. But that is only a part of the losses that concern the public, because inflation simultaneously transfers some of people’s income into the hands of government. The fact that the seigniorage tax may pay for programs they favor is a separate issue. Moreover, unlike income and other taxes, which people in democratic countries may think they have some control over through voting, seigniorage appears utterly arbitrary. In fact, people can …

Assessing Welfare Accounts, Stefan Fölster, Robert Gidehag, Micheal J. Orszag, Dennis Snower

Dennis Snower

The paper examines the possible effects of introducing a large-scale welfare reform in Sweden, namely, the introduction of comprehensive welfare accounts. Under this policy, individuals make mandatory contributions to accounts, which they can top up with voluntary contributions. In return, individuals’ welfare benefits are paid from their accounts. The paper uses a large panel of individual income data to examine how the adoption of universal welfare accounts may affect economic activity. We find that this policy could be designed so as to reduce social insurance expenditure considerably, improve the incentives to work and save, all with relatively small redistributive impact.

Management Of Fisheries In Eu: A Principal-Agent Analysis, Frank Jensen, Niels Vestergaard

Niels Vestergaard

In this paper, an EU tax on fishing effort is studied as an alternative to the system of Total Allowable Catches (TACs). The analysis is conducted under imperfect information, and the hypothesis adopted is that the EU lacks information about the costs of individual fishermen. In light of this imperfection, there are at least two reasons for considering an EU tax. First, it can be used to correct part of the market failure associated with fisheries. Second, it can be used to secure correct revelation of fishermen types in light of asymmetric information.