Thirdly, as with any other consumer tax, increases in cigarette taxes are regressive among those who continue to consume (smoke). But people on lower incomes may well respond more to price changes than those on high incomes.4 Higher tobacco taxes would thus narrow differences in consumption between rich and poor. If more of the poor smokers quit, then the recent tobacco tax increases in the Uni...

Increases in Social Security taxes during the past decade or so have prompted frequent comparisons of Social Security taxes and Federal personal income taxes. In this article, new evidence is brought to bear on this issue. Two specific questions are addressed: For 1979, what percentage of family units paid more in Social Security tax than in Federal income tax? How did this relationship between...

We use a 1985-2005 panel of state data to investigate the relative tax base elasticities of two major US state taxes—corporate income taxes and sales taxes—with respect to changes in their tax rates. We focus on these two taxes because they are essentially flat-rate taxes at the state level, making it relatively straightforward to construct estimates of their bases using aggregate collections a...

We examine the relative dynamic responses of state personal tax revenues and sales tax bases to changes in state personal income. Our econometric analysis, which includes separate analyses of long-run and short-run dynamics for each state, permits the estimation of asymmetric short-run responses depending upon the relationship between current and expected tax base growth. Results indicate that ...

The next round of reform and cuts to federal taxes should focus on bringing down overall personal tax rates, so that the tax mix depends relatively more on consumption taxes rather than income taxes, says a study released today by the C.D. Howe Institute. And Ottawa should pay more attention to payroll tax design, the study suggests, since payroll taxes that are clearly seen to fund desired ben...

Lifetime income is less variable than annual household income, since the latter reflects transitory shocks to wages, family status, and employment. This implies that lowincome households in one year have some chance of being higherincome households in other years, and significantly affects the estimated distributional burden of excise taxes. This paper shows that household expenditures on gasol...

Governments impose multiple taxes on foreign investors, though studies of the effect of tax policy on the location of foreign direct investment (FDI) focus almost exclusively on corporate income taxes. This paper examines the impact of indirect (non-income) taxes on FDI by American multinational firms, using affiliate-level data that permit the introduction of controls for parent companies and ...

In recent years, with the implementation of the tax rate increases and ad hoc earnings base increases included in the 1977 amendments to the Social Security Act, many observers have noted that Social Security taxes (for the Old-Age and Survivors Insurance (OASI), Disability Insurance (DI), and Hospital Insurance (HI) programs combined) now exceed Federal income taxes for many families. A compar...

This paper is an attempt to analyze the impact of income taxes and market capitalization on fixed investment (investment in tangible assets) by manufacturing companies listed on KSE. This paper basically examines that how corporate income taxes affect fixed investment by reducing cash flow available for a firm to invest and how the firm size in the lights of market capitalization affects fixed ...

This paper estimates the dynamic effects of changes in taxes in the United States. We distinguish between the effects of changes in personal and corporate income taxes using a new narrative account of federal tax liability changes in these two tax components. We develop an estimator in which narratively identified tax changes are used as proxies for structural tax shocks and apply it to quarter...