ELASTICITIES, TAX RATES, AND TAX REVENUE

Using Elasticities to Derive Optimal Income Tax Rates

This paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates. A simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution. In the general non-linear income tax problem, this method using elasticities shows precisely how t...

Resource Mobilization and Tax Elasticities in Pakistan

The paper is focused to identify shortcomings in the tax revenue collection in Pakistan. For this purpose, elasticities of different taxes were estimated. Partial adjustment and regression models were estimated to quantify the values for these elasticities. Short-run and long-run elasticities for direct and indirect taxes were identified. The results indicated that long-run revenue elasticities...

E-ZTax: Tax Salience and Tax Rates

This paper tests the hypothesis that the salience of a tax system affects equilibrium tax rates. I analyze how toll rates change after toll facilities adopt electronic toll collection, under which tolls are automatically deducted as the car drives through the toll plaza, eliminating the need to hand over cash. A survey I conducted indicates that drivers are much less aware of toll rates when th...

State Government Tax Revenue , Tax Revenue Composition and Tax Effort Index : An Assessment of the 1978 - 97 period

Fiscal deficit concerns, especially during sever downturns, and uncertainties regarding future federal grants have underscored the importance of relying on state own-revenues including taxes. In this paper, we derive an equation for state total tax revenue-output ratio and estimate it using a panel of forty-nine states over the period 1978-97 (the sample period reflects a break in some key seri...

Tax revenue mobilisation in Ethiopia