财政学英文版课件：Chap014 TAXATION AND INCOME DISTRIBUTION

1、TAXATION AND INCOME DISTRIBUTION Chapter 14Vocabulary Statutory Incidence Economic Incidence Tax Shifting Partial Equilibrium Models 14-2Tax Incidence: General Remarks Only people can bear taxes Functional distribution of income Size distribution of income Both sources and uses of income should be c

2、onsidered Incidence depends on how prices are determined Incidence depends on the disposition of tax revenues Balanced-Budget tax incidence Differential tax incidence Lump-sum tax Absolute tax incidence14-3Tax Progressiveness Can Be Measured in Several Ways Average tax rate versus marginal tax rate

3、Proportional tax system Progressive tax system Regressive tax systemTax Liabilities under a hypothetical tax systemIncomeTax LiabilityAverage Tax RateMarginal Tax Rate$2,000-$200-0.100.2 3,000000.25,0004000.080.210,0001,4000.140.230,0005,4000.180.214-4Measuring How Progressive a Tax System IsvIITITI

4、1101100vTTTIII210010014-5Measuring How Progressive a Tax System is A Numerical ExamplevIITITI1101100vTTTIII2100100.0002510008003001000200800.0003100080036010002408002 03002002001000800800.2 03602402401000800800.14-6Partial Equilibrium Models Models that study only one market and ignore possible spil

5、lover effects on other markets Economic incidence depends on: Elasticities of Supply and Demand Tax Salience: the extent to which a tax rate is made prominent to a taxpayer Economic incidence does not depend on whether it is levied on Consumers or Producers. 14-7Before TaxAfter TaxConsumers PaySuppl

6、iers Receive$1.40$1.00$1.20$1.20D0S0D1S1QuantityPrice14-8Unit Tax on Commodities0.60.811.21.41.61.822.22.42.6012345678DXSSXDXPerfectlyInelasticSupplyQuantityPrice14-90.60.811.21.41.61.822.22.42.6012345678DXSSXDXPerfectlyElasticSupplyQuantityPrice14-10Ad Valorem TaxesPounds of food per yearPrice per

7、Pound of foodDfSfQ0QmQrP0PmPrDf14-11Taxes on FactorsStatutory vs. Economic Incidence The Payroll Tax Tax on labor that finances Social Security Tax on Capital in a Global Economy14-12The Payroll TaxHours per yearWage rate per hourDLSLL0 = L1wg = w0PrDLwn14-13Commodity Taxation without Competition Mo

8、nopoly Despite market power a monopolist is generally made worse off QD does down Price paid by consumers goes up Price received by the monopolist goes down Profits go down Oligopoly Can result in higher or lower profits14-14MonopolyX per year$DXMRXATCXMXXX0P0ATC0abcdDXMRXPnigfhX114-15Economic Profi

9、tsEconomic Profits after unit taxProfits Taxes Economic profit Perfect competition Monopoly Measuring economic profit14-16Tax Incidence and Capitalization PR = $R0 + $R1/(1 + r) + $R2/(1 + r)2 + + $RT/(1 + r)T PR = $(R0 u0) + $(R1 u1)/(1 + r) + $(R2 u2)/(1 + r)2 + + $(RT uT)/(1 + r) u0 + u1/(1 + r)

10、+ u2/(1 + r)2 + + uT/(1 + r)T Capitalization: A stream of tax liabilities becomes incorporated into the price of an asset14-17General Equilibrium Models Show how various markets are interrelated Consider a 2-commodity, 2-factor economy resulting in the following 9 possible ad valorem taxestKF = a ta

11、x on capital used in the production of foodtKM = a tax on capital used in the production of manufacturestLF = a tax on labor used in the production of foodtLM = a tax on labor used in the production of manufacturestF = a tax on the consumption of foodtM = a tax on consumption of manufacturestK = a t

12、ax on capital in both sectorstL = a tax on labor in both sectorst = a general income tax14-18Tax Equivalence Relations Partial factor tax: tax levied on an input in only some of its uses. tKF, tLF, tKM, tLM Tax Equivalence: any two sets of taxes that generate the same changes in relative prices.tKFa

13、ndtLFare equivalent totFandandandtKMandtLMare equivalent totMareareareequivalentequivalentequivalenttotototKandtLare equivalent totSource: McLure 1971.14-19The Harberger Model Assumptions Technology Elasticity of substitution Capital intensive Labor intensive Behavior of factor suppliers Market stru

14、cture Total factor supplies Consumer preferences Tax incidence framework14-20Analysis of Various Taxes Commodity tax (tF) Income tax (t) General tax on labor (tL) Partial factor tax (tKM) Output effect Factor substitution effect14-21Some Qualifications Differences in individuals tastes Immobile fact

15、ors Variable factor supplies14-22An Applied Incidence StudyAverage Federal Tax Rates and Share of Federal Taxesby Income Quintile (2009)Income CategoryAverage Federal Tax Rate Share of Federal TaxesLowest Quintile1.0%0.3%Second Quintile6.8%3.8%Third Quintile11.1%9.4%Fourth Quintile15.1%18.3%Highest Quintile23.2%67.9%All Quintiles17.4%100.0%Top 1% 28.9% 22.3%Source: Congressional Budget Office (2012a)14-23Chapter 14 Summary Who bears the burden of a tax? It depends on price changes, which, in turn, depend on: Time frame Disposition