Following the seminal work of late 19th century economist Etienne Laspeyres we analyse the incidence of the Prussian milling and butchery tax shortly before its repeal in 1875. A comparison of flour prices in cities which levied this tax with cities which did not reveals unusually strong tax overshifting. Modern theories which explain overshifting of a specific tax argue with quality improvemen...

Taxation and Internal Migration: Evidence from the Swiss Census Using Community-Level Variation in Income Tax Rates We investigate the relationship between income tax rate variation and internal migration for the unique case of Switzerland, whose system of determining tax rates primarily at the community level results in enough variation to permit analysis of their influence on migration. Speci...

This paper characterizes the optimal linear financial transaction tax in an equilibrium model of competitive financial markets. As long as investors hold heterogeneous beliefs about the returns of assets in fixed supply and the planner calculates welfare using any single belief, we expect the optimal tax to be positive, even when a fraction of trading is fundamental. Strikingly, the optimal tax...

This paper presents an analysis of the extent to which tax planning affects the level of the inheritance tax rate that is perceived to be fair. In a factorial survey conducted in Germany, tax planning was found to increase the fair tax rate by approximately 4 percentage points. The fair tax rate is determined by not only the size of the bequest, the relationship of the heir to the bequeather, a...

This paper studies the impact of corporate tax policy on the economy in the presence of both convex and nonconvex capital adjustment costs in a dynamic general equilibrium model. We show that corporate tax policy generates both intensive and extensive margin effects via the channel of marginal Q. Its impact is determined largely by the strength of the extensive margin effect, which in turn depe...

Fernandez (2004b) argues that the present value effect of the tax saving on debt cannot be calculated as simply the present value of the tax shields associated with interest. This contradicts standard results in the literature. It implies that, even though the capital market is complete, value-additivity is violated. As a consequence, adjusted present value formulae of a standard sort cannot be...

Tax treaties are often viewed as a mechanism for eliminating tax competition, however this approach ignores the need for bargaining over the treaty’s terms. This paper focuses on how bargaining can affect the withholding taxes set under the treaty. In a simple framework, we develop hypotheses about patterns in treaty tax rates. A key determinant for these patterns is the relative size of bilate...

We consider the implications of ethical behaviour on the effect of a redistributive tax-transfer system. In choosing their labour supplies, individuals take into account whether their tax liabilities correspond to what they view as ethically acceptable. If tax liabilities are viewed as ethically acceptable, a taxpayer behaves ethically, does not distort her behaviour, and chooses to work as if ...

The stock market participation rate for U.S. households with assets in both taxable and tax-deferred accounts is increasing with age in taxable accounts and decreasing with age in tax-deferred accounts. This paper asks whether a quantitative life-cycle model of portfolio choice can match these life-cycle patterns of stock market participation. The model incorporates several key features into a ...