W hat would happen to the pension system if we replaced the federal income tax with a consumption tax? With more than $10 trillion in retirement savings at stake and with the baby boom generation rapidly approaching retirement age, the answer to this question is of considerable importance. In particular, policy makers need to be concerned about the impact that shifting to a consumption tax woul...

Following Mirrlees (1971) and Vickrey (1945), the optimal tax literature has studied the design of a personal income tax where the ideal would be to tax unobserved earnings ability but instead the only available information is actual earnings. In practice, though, taxes depend on a broader range of information about each individual than earnings. In principle, this supplementary information can...

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...

When product markets are monopolistic, an income redistributive policy affects social welfare not only through changes in disposable income but also through changes in product prices. In the optimal income tax formula, we then obtain a Pigouvian term correcting for this price externality. We provide sufficient conditions when the Pigouvian term is progressive among top earners. Moreover, if the...

Thirty-three states treat in-state municipal bond interest income differently from out-of-state municipal bond interest income. While they tax the interest income of out-of-state bonds, they exempt interest income of in-state bonds from state taxes. This differential treatment in taxes creates a demand for in-state bonds and provides a disincentive for holding out-of-state bonds. A priori, this...

Developing countries are characterized by a low level of tax compliance arising from weaknesses in administration and trust deficits. This poses critical challenge toward the attainment developmental goals. paper aims to examine moderating role authorities for relationship between personal income Nigeria. The study used survey design obtain data through structured questionnaire administered ran...

A dividend imputation tax system provides shareholders with a credit (for corporate tax paid) that can be used to offset personal tax on dividend income. This paper shows how to infer the value of imputation tax credits from the prices of derivative securities that are unique to Australian retail markets. We also test whether a tax law amendment that was designed to prevent the trading of imput...

Literature on tax compliance has experienced explosive growth in the past 20 years. Yet the vast majority of this work has focused on individuals and compliance with the personal income tax, rather than company compliance and compliance with other taxes. This paper explores the subject of sales tax audit selection and firm underreporting of statutory sales tax liabilities. The analysis relies o...

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...