This paper examines optimal income tax progressivity when avoidance responses to taxation are important, and can be controlled at some cost by the government. A simple example shows that ignoring the fact that avoidance can be controlled that the leak in Okun’s bucket can be fixed can lead to misleading implications about the optimal degree of tax rate progressivity. The paper then generalizes ...

The OASI eligibility provisions include a retirement test (or earnings test), and in 1979 aged beneficiaries who are under age 72 give up $1 in current benefits for each $2 of annual earnings above $4,500. If the retirement test were eliminated, total OASI payouts would increase because aged workers would no longer forfeit benefits. Aged workers also might increase earnings or delay retirement ...

The impact of pollution and abatement policy within a stochastic endogenous growth model is analyzed. Environmental care is provided by the government and financed through income taxation and government bonds. Due to environmental preferences and partial perception of the individual’s impact on pollution, government debt influences equilibrium growth. Hence, there is an additional growth effect...

This paper examines the economics of for-profit and not-for-profit hospitals through the prism of capital acquisitions. The exercise suggests that of two hospitals that are equally efficient in producing health care, the for-profit hospital would have to charge higher prices than the not-for-profit hospital would, to break even on capital acquisitions. The reasons for this divergence are (1) th...

A well-crafted retail sales tax on all goods and services could replace all 36 other state-level taxes in Kansas— including the personal and corporate income taxes. The tax rate could be eight percent (8%) or less, after the state government makes budget adjustments related to the recent recession-driven revenue shortfalls. Such a bold move holds the promise of making Kansas one of the most gro...

laffer curve indicates relationship between tax rate and tax income. the aim of this paper is estimating of laffer curve in iranian economy. to do so, we have used threshold regression method. empirical results indicate that since the tax rate is low (the threshold value is less than 0.0848) in two-regime model, tax rate and tax income have a significant positive relationship, but when the tax ...

Can Taxes Stabilize the Economy in the Presence of Consumption Externalities? Considering a finance constrained economy, we discuss the stabilization role of variable labour and capital income taxes under a balanced-budget rule in the presence of consumption externalities of the “keeping up with the Joneses” type. We find that sufficiently procyclical labor and/or capital income taxes are able ...

Introduction The role of education in local, state and national economic development has become a central public policy issue in recent years. Rural localities, in particular, which typically have lower education levels among the adult population than urban areas, view increased educational investments as an important component of an economic development strategy. At the same time, rural commun...

I use data from the 1994 Consumer Expenditure Survey as well as other sources to measure the distributional impact of green tax reforms and consumption tax reforms using both annual income and lifetime income approaches to rank households. A modest tax reform in which environmental taxes equal to 10% of federal receipts are collected has a negligible impact on the income distribution when the f...