Tax-tariff reform with costs of tax administration

Tax Reform and Poverty

The tax system has a pervasive impact on poverty, both directly through its role in the distribution of society’s resources and indirectly through its effects on the incentives for economic decisions like working and saving. The two most important facets of the tax system for low-income families are payroll taxes and the Earned Income Tax Credit (EITC), the former of which levies a tax on earne...

Evaluating International Tax Reform

This paper introduces “capital ownership neutrality” (CON) and “national ownership neutrality” (NON) as benchmarks for evaluating the desirability of international tax reforms, and applies them to analyze recent U.S. tax reform proposals. Tax systems satisfy CON if they do not distort the ownership of capital assets, which promotes global efficiency whenever the productivity of an investment di...

Property tax reform in India

The property tax is an important local revenue source in many countries, but it is often underused as a source for financing local expenditures. In India, many local governments have initiated administrative and valuation reforms to increase the yield from property taxes. In this paper, we examine the fiscal and distributional implication of the ongoing and potential assessment reforms in two I...

The Truth About Tax Reform

Tax Reform and Automatic Stabilization

A fundamental property of a progressive income tax is that it provides implicit collective insurance against idiosyncratic shocks to income by dampening the variability of disposable income and consumption. The Economic Recovery Tax Act of 1981 (ERTA) and the Tax Reform Act of 1986 (TRA86) greatly reduced the number of marginal tax brackets and the maximum marginal rate, which limits the abilit...