This paper uses data on actual returns on taxable bonds, tax-exempt bonds, and a small sample of equity mutual funds over the 1962-1998 period to compare two asset location strategies for retirement savers who invest in equities through equity mutual funds. The first strategy, ‘defer stocks first,’ gives priority to holding equity mutual funds in a saver’s tax-deferred account, while the second...

T he Tax Reform Act of 1986 (TRA 86) marked an' important shift in Federal income tax policy. While previous tax acts provided incentives or disincentives for various business activities and industries, TRA 86 attempted to create a more "level playing field" by broadening the tax base and lowering tax rates. However, while TRA 86 reduced the direct effect of the Federal income tax on alternativ...

A significant amount of non-compliance associated with the personal income tax is due to the taxpayers who are not “in the system,” not having filed a tax return in the recent past or perhaps ever. We use experimental laboratory methods to examine two types of positive incentives for filing tax returns: tax credits and social safety net benefits, both of which are conditional on tax filing. Our...

Europe and Japan are experiencing the aging of their populations. Aging implies a restructuring of the economy. Political issues which arise in an aging society include 1) a voting majority for the interests of the elderly, 2) a voting majority of females, 3) the domination of the decision power in corporate and similar ruling bodies, and 4) unemployment or a long wait for promotion for young...

This paper describes the positive effect that corporate income tax has on capital formation in the presence of liquidity constraints and uninsurable risk. The author uses a dynamic generalequilibrium model in which individuals choose whether to become entrepreneurs or workers. Workers save by holding corporate equity and therefore are subject to double taxation, as the return on their savings i...