We analytically and quantitatively examine a prominent justi…cation for capital income taxation: goods preferred by those with high ability ought to be taxed. We study an environment where commodity taxes are allowed to be nonlinear functions of income and consumption and show that a relationship between ability and preferences over goods provides a novel reason for sophisticated distortionary ...

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...

HE U.S. Congress has recently passed historic legislation that revises the fundamental structure of U.S. income tax law. Promoters of this legislation hope that the new tax system will encourage more productive use of economic resources and faster economic growth. Economists disagree very little about the general objectives of tax refor-m. The new law, however, has drawn significant criticism, ...

HE U.S. Congress has recently passed historic legislation that revises the fundamental structure of U.S. income tax law. Promoters of this legislation hope that the new tax system will encourage more productive use of economic resources and faster economic growth. Economists disagree very little about the general objectives of tax refor-m. The new law, however, has drawn significant criticism, ...

In this chapter I offer, from an outsider’s perspective, some observations about tax complexity in Australia. The outsider’s perspective offers the promise of a fresh viewpoint unencumbered by an intimate familiarity with the status quo and the economic, political and social pressures that have led to it. It also means I may have misunderstood some aspects of the Australian tax system and may b...

Taxing capital in open economies su¤ers from a rather wasteful tax competition. According to Konrad & Schjelderup (1999) harmonizing capital income taxes within a subgroup of countries is bene…cial to all countries. Although economists and politicians advocate a coordinated tax policy within a federation or a federal system like the EU they favor national tax sovereignty over a harmonization of...

This paper describes the framework of the institutional relationship between financial reporting and taxation in Japan and discusses how the relationship contributes corporate governance from viewpoints of reduction of some kinds of costs concerning tax compliance and political processes and both honest financial reporting and tax filing, in Japan. It has been criticized that the connection bet...

This article uses data from survey questions fielded on the 2011 wave of the Cognitive Economics Study to uncover systematic errors in perceptions of income tax rates. First, when asked about the marginal tax rates (MTRs) for households in the top tax bracket, respondents underestimate the top MTR on wages and salary income, overestimate the MTR on dividend income, and therefore significantly u...

We study the no arbitrage characterization of asset prices in the presence of capital gains and income taxes. The distinguishing feature of our analysis is that we impose on the model two important features of the tax code that have received little attention in the academic literature: the limited use of capital losses and the inability to wash sell. We show that under remarkably mild condition...