This paper evaluates the quantitative impact of capital liberalization on the taxation structure and welfare of the liberalizing countries when governments conduct fiscal policy optimally but without commitment (time-consistent policies). The transition from a regime of capital autarky to a regime of free mobility leads to a decrease in the long-term tax rate on capital of 13 percent and an inc...

Taxation and Education Investment in the Tertiary Sector by Fredrik Andersson and Kai A. Konrad In this paper we briefly report some key data on educational expenditure and output in OECD countries and then turn to the motivations for public education. Public education can be important for equal opportunities and has a number of redistributional aspects within and between generations. We furthe...

Contests are a common method to describe the distribution of many di¤erent types of rents. Yet in many of these situations the utilisation of the prize plays an important role in determining agents’payo¤s and incentives. In this paper, we investigate the incentives to expend e¤ort for a prize that produces consumption externalities and consider alternative regulatory policies. We …nd relatively...

The paper summarizes the arguments in favor of a shift from comprehensive to dual income taxation and complements the discussion by an overview on tax reforms which reveal the characteristic features of a dual income tax system. The scope of our analysis is not restricted to the Nordic countries, we also include other European countries, whose tax reform steps can be regarded as a move toward a...

Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity In this paper we argue that, for a given overall level of labour income taxation, a more progressive tax schedule increases employment. From a theoretical point of view, higher progressivity increases overall employment through a wage moderating effect and also because employment of low-paid workers is mor...

Obesity is a global problem. Sugar-sweetened beverages (SSB) are a leading contributor of added sugars in individual diets and thus to obesity. Governments have considered taxing SSBs to prevent obesity and generate revenue, but no 'one-size-fits-all' taxation approach exists. We describes three key considerations for governments interested in exploring beverage taxation: (i) what type of tax t...

Estimating the Effects of Tax Reform in Differentiated Product Oligopolistic Markets The incidence of taxation has been extensively discussed in the public finance literature, but mainly within a competitive market setting or within a homogenous good (Cournot type) oligopoly. In a differentiated product oligopoly the effect of taxation can be more complex as the rate of taxation may affect not ...

This paper develops an infinite horizon model of public spending and taxation in which policy decisions are determined by legislative bargaining. The policy space incorporates both productive and distributive public spending and distortionary taxation. The productive spending is investing in a public good that benefits all citizens (e.g., national defense or air quality) and the distributive sp...

We propose a model consistent with two observations. First, the tax rates adopted by different countries are generally uncorrelated with their growth performance. Second, countries that drastically reduce private incentives to invest severely hurt their growth performance. In our model, the effects of taxation on growth are highly nonlinear. Low tax rates have a very small impact on long-run gr...

This paper quantitatively examines the long-run macroeconomic effects of resource misallocation in an otherwise standard one-sector neoclassical growth model with heterogeneous establishments being subject to progressive taxation as well as endogenous entry decisions. Under a progressive fiscal policy rule, capital and labor inputs move from more productive to less productive establishments as ...