Annual growth rates of real GDP in New Zealand have varied widely, from 18% to −8%, since World War II. During this period the tax burden (the ratio of tax revenue to GDP) has trended upward from 23% to 35%. The tax mix (the ratio of indirect taxes to direct taxes) has varied between 0.31 and 0.75, having increased recently with the introduction of the goods and services tax. In this paper we e...

We develop a model of commodity tax competition with monopolistically competitive internationally mobile firms, transport costs, and asymmetric country sizes. We investigate the impacts of non-cooperative tax setting, as well as of tax harmonization and changes in the tax principle, in both the short and the long run. The origin principle, when compared to the destination principle, is shown to...

The welfare-maximizing income tax structure, rate of money creation, and amounts of intergenerational transfers are jointly determined for given rates of government consumption. When government consumption is zero, it is found for the parameter values examined that the income tax structure is progressive, the rate of money change is negative, and positive transfers are made to the old. As gover...

We develop a model of commodity tax competition with monopolistically competitive internationally mobile firms, transport costs, and asymmetric country sizes. We investigate the impacts of non-cooperative tax setting, as well as of tax harmonization and changes in the tax principle, in both the short and the long run. The origin principle, when compared to the destination principle, is shown to...

Most people in the United States purchase health insurance through their employer due to the tax subsidy on employer-provided health insurance premiums. A large literature has developed that looks at impact of reductions in this tax subsidy. Recent papers tend to focus on changes in offers, eligibility, and take-up as a result of changes in the tax subsidy. One might consider these as changes a...

In Austrian theory, the business cycle is caused by expansive monetary policy, which artificially lowers the interest rate below equilibrium rates, necessarily lengthening the structure of production. Can tax alterations also cause an Ausman business cycle? Only if they affect time preference rates, the determinant of the shape of the Hayekian triangle. It is the contention of th is paper that ...

This note studies the choice of tax structure in a majority voting model with tax competition. Regions may tax mobile capital or immobile labor. Individuals differ with respect to their relative endowments of labor and capital. Even though a lump sum tax is available, the equilibrium capital tax in a jurisdiction may be positive. In a symmetric equilibrium, this will be true if the median capit...

Recent financial crises in Europe as well as the periodic battles in the U.S. over the debt ceiling point to the importance of fiscal discipline among developed countries. This paper develops an open economy model, calibrated to the U.S. and a subset of the EMU, to evaluate the impact of various permanent tax changes. The first set of experiments considers a targeted one percentage point reduct...

Growing inequality in the developed world has led to calls for increasing countries’ top marginal tax rates. Crucially, the optimal top marginal income tax rate depends on people’s tendency to migrate in response to changes in the tax rate. Changes in tax rates and and tax policy must take into account that increases in income tax rates may compel people to leave a country or state. This paper ...

The Health Security Act is a pragmatic plan for achieving universal health insurance coverage for a broad package of benefits at reasonable cost. It proposes necessary and reasonable changes in insurance market practices and administrative structure. It finances the reformed system with a credible combination of achievable cost savings, mandatory private-sector payments, and limited "sin" taxes...