This paper considers an optimal income tax cum higher education policy. It shows that in the presence of an optimal income tax system higher education should be taxed rather than subsidized. Furthermore, income taxes should become less progressive when an optimal higher education policy is introduced. JEL Classification: H21, I22. Berthold U. Wigger Department of Economics University of Mannhei...

This study investigates whether personal taxes are related to asset valuations. The effective tax rate of investment income fluctuated considerably since federal income taxes were introduced. The main result of the paper demonstrates that there is an economically and statistically significant relationship between asset valuations and personal tax rates. Stock valuations tend to be higher when t...

Tax competition among states and jurisdictions has already been examined many times in the economic literature. However, the main scope of the research was focused on a tax rates competition in income taxes and its consequences in bringing direct investments. This scripture/commentary tries to analyze various instruments and beneficiaries of the tax system competition and provide a general over...

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 …nd that, when ability is positively related to a preference for a good, optimal marginal commodity taxes on this good may b...

[ Journa © 2013 market. We study this problem in the context of a directed search model of the labor market populated by homogeneous workers and heterogeneous firms. The optimal redistribution can be attained using a positive unemployment benefit and an increasing and regressive labor income tax. The positive unemployment benefit serves the purpose of lowering the search risk faced by workers. ...

This paper estimates that the US could attain large welfare gains by implementing an optimal Ramsey tax policy that taxes consumption and income. It is also found that the welfare implications associated with taxing consumption are quantitatively more important than those associated with dynamically taxing income. Indeed, replacing income taxes with a constant consumption tax leads to a welfare...

To finance expenditures on goods and services and government programs, governments levy taxes on many different economic activities. Large countries tend to raise much of their revenue by taxing income. For example, in the United States, taxes are levied on capital income, such as profits and interest, and also on labor income, such as wages and salaries. Taxes on income affect economic activit...

The Czech Republic has over the past decade carried out two waves of tax and benefit reforms. The first one took place in 2005–2006 during the left-wing government and the second one has been carried out in 2008 by the right-wing government. Using EUSILC data for selected types of households, the paper assesses changes in the distribution of gross incomes and effects of the changes in taxes and...

Can Taxes Stabilize the Economy in the Presence of Consumption Externalities? Considering a finance constrained economy, we discuss the stabilization role of variable labour and capital income taxes under a balanced-budget rule in the presence of consumption externalities of the “keeping up with the Joneses” type. We find that sufficiently procyclical labor and/or capital income taxes are able ...