dunnettreader + tax_policy   17

Emmanuel Saez - Taxing the Rich More: Preliminary Evidence from the 2013 Tax Increase (Nov 2016) | NBER Working Papers
Taxing the Rich More: Preliminary Evidence from the 2013 Tax Increase
Emmanuel Saez
NBER Working Paper No. 22798 - Issued in November 2016
This paper provides preliminary evidence on behavioral responses to taxation around the 2013 tax increase that raised top marginal tax rates on capital income by about 9.5 points and on labor income by about 6.5 points. Using published tabulated tax statistics from the Statistics of Income division of the IRS, we find that reported top 1% incomes were significantly higher in 2012 than in 2013, implying a large short-run elasticity of reported income with respect to the net-of-tax rate in excess of one. This large short-run elasticity is due to income retiming for tax avoidance purposes and is particularly high for realized capital gains and dividends, and highest at the very top of the income distribution. However, comparing 2011 and 2015 top incomes uncovers only a small medium-term response to the tax increase as top income shares resumed their upward trend after 2013. Overall, we estimate that at most 20% of the projected tax revenue increase from the 2013 tax reform is lost through behavioral responses. This implies that the 2013 tax increase was an efficient way to raise revenue.
paywall  capital_gains  fiscal_policy  tax_collection  behavioral_economics  tax_increases  US_government  Obama_administration  1-percent  top-marginal_tax_rates  NBER  tax_policy  paper  tax_avoidance 
december 2016 by dunnettreader
Elena Seghezza - Fiscal capacity and the risk of sovereign debt after the Glorious Revolution: A reinterpretation of the North–Weingast hypothesis (2015) — ScienceDirect
European Journal of Political Economy, June 2015, Vol.38:71–81, doi:10.1016/j.ejpoleco.2014.12.002
Dept. of Economics, University of Genoa, Via Vivaldi 5, 16126 Genova, Italy
Several explanations have been given to account for the fact that, in contrast to the claim made by North and Weingast (1989), the decline in interest rates on British sovereign debt did not occur until several years after the Glorious Revolution in 1688. This paper puts forward the hypothesis that the decline in the risk premium on Britain's sovereign debt was due to the significant increase in excise duties in the early part of the eighteenth century. This increase was possible for two reasons. On the one hand, with the Glorious Revolution, parliament no longer had reason to fear that the King would strengthen his political power due to the availability of more fiscal revenue. On the other hand, the new excise taxes were borne mostly by the poor, that is a social class not represented in parliament. The delay in reducing the interest rate on British sovereign debt, following the Glorious Revolution, was, therefore, due to the length of time needed to increase and improve the fiscal bureaucracy responsible for the collection of excise duties.
Keywords -- Glorious Revolution Fiscal capacity Sovereign debt Interest rates
article  paywall  political_economy  institutional_economics  North-Weingast  Glorious_Revolution  fiscal-military_state  fiscal_space  tax_policy  tax_collection  bureaucracy  sovereign_debt  interest_rates  Parliament  Parliamentary_supremacy  interest_groups  inequality  excise  lower_orders  taxes-consumption  landed_interest 
december 2016 by dunnettreader
Rafael La Porta and Andrei Shleifer - "Informality and Development" (2014) Journal of Economic Perspectives
In developing countries, informal firms account for up to half of economic activity. They provide livelihood for billions of people. Yet their role in economic development remains controversial with some viewing informality as pent-up potential and others viewing informality as a parasitic organizational form that hinders economic growth. In this paper, we assess these perspectives. We argue that the evidence is most consistent with dual models, in which informality arises out of poverty and the informal and formal sectors are very different. It seems that informal firms have low productivity and produce low- quality products; and, consequently, they do not pose a threat to the formal firms. Economic growth comes from the formal sector, that is, from firms run by educated entrepreneurs and exhibiting much higher levels of productivity. The expansion of the formal sector leads to the decline of the informal sector in relative and eventually absolute terms. A few informal firms convert to formality, but more generally they disappear because they cannot compete with the much more-productive formal firms.
Citation -La Porta, Rafael and Andrei Shleifer. 2014. "Informality and Development." Journal of Economic Perspectives, 28(3): 109-26.
structural_adjustment  informal_economy  LDCs  access_to_finance  article  Labor_markets  doing_business  productivity  tax_avoidance  regulation  poverty_reduction  poverty  tax_policy  access_to_services  conditionality  entrepreneurs  economic_growth  aid  development  formal_economy  industrialization  downloaded 
august 2016 by dunnettreader
Mike Konczal, J.W. Mason, Amanda Page-Hoongrajok - Ending Short-Termism: An Investment Agenda for Growth - Roosevelt Institute - Nov 2015
The first part of this agenda will directly counter several of the specific trends known to increase short-termism. It will include ideas that are broadly applicable across industries, such as policies to address skyrocketing CEO pay, as well as more targeted solutions. A policy agenda to address corporate short-termism requires a comprehensive approach focused on building countervailing power, which is addressed in the second part of our proposal. The forces that push firms toward shorttermism will persist and find new ways to exert power, but the reforms outlined in this paper embrace wide-scale, long-term changes, such as granting workers power on boards, designed to attract long-term stakeholders. The agenda also includes practical, simple policy changes for regulators.The third part of our agenda contains solutions that point to a new role for the state. Taxes and full employment are two obvious and necessary ways of checking short-termism, and if companies are less interested in investment, government needs to fill in that gap, whether by providing high-speed cable or funding basic research. -- downloaded pdf to Note
US_economy  investment  investors  capital_markets  corporate_finance  corporate_governance  shareholder_value  shareholders  short-termism  financial_system  equity_markets  capital_formation  capital_allocation  executive_compensation  debt  buybacks  tax_policy  Labor_markets  labor_share  unions  investment-government  downloaded 
november 2015 by dunnettreader
J.W. Mason - Understanding Short-Termism: Questions and Consequences - Roosevelt Institute - Nov 2015
addresses the most common objections to the idea that short-termism is a serious problem for the US economy. These objections fall into 3 broad categories: short-termism is not real (because of an apparent increase in business investment), short-termism is not harmful (because increased payouts allocate capital more efficiently), and short-termism is not our problem (because shareholders alone should determine what to do with a corporation’s surplus funds). J.W. Mason provides answers to 12 common questions about short-termism and shareholder payouts. Questions 1 and 2 reflect the first objection, Questions 3 through 7 reflect the second objection, and questions 8 through 12 reflect the third objection. Drawing on the best available data, he concludes that none of these objections hold up under scrutiny.This report is part of the Roosevelt Institute’s comprehensive Rewriting the Rules agenda, which aims to level the playing field and grow the economy. A companion report, “Ending Short-Termism,” develops a policy agenda to respond to this challenge -- downloaded pdf to Note
US_economy  investment  investors  capital_markets  corporate_finance  corporate_governance  shareholder_value  shareholders  short-termism  financial_system  equity_markets  capital_formation  capital_allocation  executive_compensation  debt  buybacks  tax_policy  downloaded 
november 2015 by dunnettreader
The Omaha Platform: Launching the Populist Party | History Matters - US History Survey - GMU
Although historians often speak of a “Populist movement” in the 1880s, it wasn’t until 1892 that the People’s or Populist Party was formally organized. The Omaha Platform, adopted by the founding convention of the party on July 4, 1892, set out the basic tenets of the Populist movement. The movement had emerged out of the cooperative crusade organized by the Farmer’s Alliance in the 1880s. The preamble was written by Minnesota lawyer, farmer, politician, and novelist Ignatius Donnelly. Delegates to the convention embraced the platform with great enthusiasm. Many of the specific proposals urged by the Omaha Platform—the graduated income tax, the secret ballot, the direct election of Senators, the eight-hour day—won enactment in the progressive and New Deal eras of the next century. Yet at least one historian has argued that the fundamental cooperative and democratic spirit of the agrarian radicals was lost along the way.
etexts  US_history  19thC  20thC  populism  parties  agrarian_interests  US_politics  reform-political  Progressive_Era  New_Deal  labor_standards  tax_policy  US_constitution  movements-political  democracy  representative_institutions  Gilded_Age  website 
august 2015 by dunnettreader
Leonard E. Burman, William G. Gale, et al - Financial transaction taxes in theory and practice | Brookings Institution - June 30, 2015
By: Leonard E. Burman, William G. Gale, Sarah Gault, Bryan Kim, Jim Nunns and Steve Rosenthal -- In response to the financial market crisis and Great Recession, there has been a resurgence of interest in financial transaction taxes (FTTs) around the world. We estimate that a well-designed FTT could raise about $50 billion per year in the United States and would be quite progressive. We discuss the effects of an FTT on various dimensions of financial sector behavior and its ambiguous effects on economic efficiency. -- downloaded pdf to Note
paper  financial_system  capital_markets  markets-structure  HFT  taxes  financial_economics  financial_transaction_tax  liquidity  market_makers  tax_policy  tax_collection  downloaded 
july 2015 by dunnettreader
VOX ebook -The Age of Global Value Chains: Maps and Policy Issues | VOX, CEPR’s Policy Portal -July 2015
João Amador, Filippo di Mauro -- Global value chains (GVCs) - referring to the cross-border flows of goods, investment, services, know-how and people associated with international production networks - have transformed the world. Their emergence has resulted in a complete reconfiguration of world trade, bearing a strong impact on the assessment of competitiveness and economic policy. The contributions to this eBook are based on research carried out within the scope of the Eurosystem Competitiveness Research Network (CompNet), bringing together participants from EU national central banks, universities and international organisations interested in competitiveness issues. The mapping of GVCs and full awareness about their implications are essential to informed public debate and improved economic policy.-- downloaded pdf to Note
books  global_economy  cross-border  globalization  supply_chains  global_value_chains  economic_sociology  trade-policy  competitiveness  competition-interstate  manufacturing  transport  transaction_costs  tax_policy  business_practices  business_processes  economic_policy  development  development-impact  labor_standards  Labor_markets  downloaded 
july 2015 by dunnettreader
Sven Langedijk,et al - The corporate debt bias and the cost of banking crises | VOX, CEPR’s Policy Portal - 04 July 2015
Sven Langedijk, Gaëtan Nicodème, Andrea Pagano, Alessandro Rossi --Strengthening the banking sector through higher equity capital is one of the key elements of policies aiming to reduce the probability of crises. However, the ‘corporate debt bias’ – the tendency of corporate tax systems to favour debt over equity – is at odds with this objective. This column estimates the benefits for financial stability of eliminating the corporate debt bias. Fully removing the debt bias is estimated to reduce potential public finance losses by between 25 and 55% for the six large EU countries sampled.
paper  financial_system  financial_regulation  financial_crisis  banking  capital_adequacy  debt  corporate_finance  leverage  tax_policy  interest_rates  equity-corporate  EU 
july 2015 by dunnettreader
Era Dabla-Norris et al - Causes and Consequences of Income Inequality : A Global Perspective | IMF Research - June 2015
Era Dabla-Norris ; Kalpana Kochhar ; Nujin Suphaphiphat ; Frantisek Ricka ; Evridiki Tsounta -- This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive. (Duh!) -- didn't download
paper  IMF  economic_growth  inequality  OECD_economies  LDCs  emerging_markets  fiscal_policy  labor  labor_standards  supply-side  tax_policy  access_to_finance  poverty  working_class  middle_class  trickle-down 
july 2015 by dunnettreader
Lee Anne Fennell, Richard H. McAdams - The Distributive Deficit in Law and Economics :: SSRN - Minnesota Law Review, Forthcoming (April 2015)
Lee Anne Fennell, Richard H. McAdams, both University of Chicago Law School -- University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 713 -- Welfarist law and economics ignores the distributive consequences of legal rules to focus solely on efficiency, even though distribution unambiguously affects welfare, the normative maximand. The now-conventional justification for disregarding distribution is the claim of tax superiority: that the best means of influencing or correcting distribution is via tax-and-transfer. Critics have observed that optimal redistribution through tax may be politically infeasible, but have generally overlooked the rejoinder that the same political impediments to redistribution through tax will block redistribution through legal rules. This “invariance hypothesis,” as we label it, holds that there is only one distributive equilibrium and that Congress will offset through tax any deviations from it. We highlight the centrality of invariance to the conventional economic wisdom and assert that it is just as relevantly false as the zero transaction cost assumption. In contexts where political impediments to tax-based redistribution exceed the impediments to doctrinal redistribution, it may be possible to increase welfare by redistributing outside of tax. Welfarists should, therefore, devote as much scholarly attention to the “political action costs” of redistribution as they do to transaction costs.-- PDF File: 65. -- Keywords: redistribution, tax-and-transfer, legal rules, law and economics, welfare economics -- saved to briefcase
article  SSRN  philosophy_of_law  welfare_economics  behavioral_economics  law-and-economics  redistribution  tax_policy  transaction_costs  inequality  inequality-wealth  policymaking  US_politics 
july 2015 by dunnettreader
Ravi Kanbur, Michael Keen - Rethinking informality | VOX, CEPR’s Policy Portal - 05 June 2015
The ‘informal’ economy presents a key challenge for developing-nation policymakers due to its labour-market and tax-revenue implications. Informality is usually defined as the complement to formality, i.e. any activity that isn’t covered by a clear set of laws. This column argues that such a definition risks obscuring more than it reveals, by failing to understand and address the varieties of informality that exist. Sensible policy should focus on tailored interventions across different categories of taxpayer, not on reducing aggregate informality. -- nice way of looking at policy objectives - it's not just revenue collection, there's interactions with other types of regulation - they highlight labor laws, but lots of the "doing business" projects uncover many other regulatory compliance issues in developing countries that would interact as well
Instapaper  paper  development  regulation  regulation-enforcement  regulation-costs  informal_sectors  Labor_markets  labor_law  labor_standards  tax_policy  tax_collection  SMEs  micro-enterprises  doing_business 
june 2015 by dunnettreader
Bill Gale and David John - Retirement Security a Priority in the 2015 State of the Union | Brookings Institution - Jan 2015
In the 2015 State of the Union Address, President Obama made retirement security a priority for his Administration by promoting the Automatic IRA, a retirement savings plan that originated at the Retirement Security Project. The proposals would increase the ability of part-time workers to join their employer’s plan and improve tax incentives for businesses that either start an Automatic IRA or other type of retirement plan or add automatic enrollment to an existing plan
Obama_administration  tax_policy  retirement  savings  middle_class  SMEs  labor_standards 
january 2015 by dunnettreader
Bill Gale - Adjusting the President’s Capital Gains Proposal | Brookings Institution - Jan 2015
Galevpropoees a standard 20% of current asset value as the deduction for calculating capital gains on inherited assets -- Creating a standard basis would impose “rough justice” on the taxation of capital gains at death. That is not always ideal, but it is a lot better than the current “no justice” system we have now and it would make Obama’s proposal easier to implement while also eliminating one of the chief concerns with his proposal.
Obama_administration  tax_policy  tax_reform  capital_gains  inheritance  US_politics  fiscal_policy 
january 2015 by dunnettreader
Chuck Marr and Chye-Ching Huang - Obama’s Capital Gains Tax Proposals Would Make Tax Code More Efficient and Fair | Center on Budget and Policy Priorities -Jan 2015
The tax code strongly favors income from capital gains — increases in the value of assets, such as stocks — over income from wages and salaries. These preferences are economically inefficient: they promote tax schemes that convert ordinary income into capital gains and encourage people to hold assets just to escape tax, even if they have better investment opportunities. They are also highly regressive, since capital gains are heavily concentrated at the top of the income scale. The President has proposed to make the tax code more efficient and equitable by reducing one of the biggest subsidies for capital gains (a preferential rate compared to wage and salary income) and largely eliminating another (the ability to avoid capital gains tax completely by holding on to an asset until death). These changes would allow investments to flow to where they are most productive and reduce investment in creating tax avoidance schemes instead of in real economic activity, among other economic benefits. And, because the benefits of the current preferences for capital gains flow overwhelmingly to the top, fully 99 percent of the revenue from the President’s capital gains proposals would come from the top 1 percent of filers, the Treasury Department estimates. -- 7 page report downloaded as pdf to Note
US_economy  US_politics  Obama_administration  taxes  tax_policy  tax_reform  capital  investment  1-percent  inheritance  tax_collection  public_finance  public_policy  trickle-down  incentives  incentives-distortions  distribution-wealth  distribution-income  downloaded  EF-add 
january 2015 by dunnettreader
Mike Konczal - The 2003 Dividend Tax Cut Did Nothing to Help the Real Economy | Next New Deal January 2015
Pre Obama proposal to reverse part of Bush tax cuts - Berkeley economist Danny Yagan’s fantastic new paper, “Capital Tax Reform and the Real Economy: The Effects of the 2003 Dividend Tax Cut” -- He uses a large amount of IRS data on corporate tax returns to compare S-corporations with C-corporations. C-corps are publicly-traded, S-corps are closely held without institutional investors. But they are largely comparable in the range Yagan looks at (between $1 million and $1 billion dollars in size), as they are competing in the same industries and locations. -- S-corps don’t pay a dividend tax and thus didn’t benefit from the big 2003 dividend tax cut, while C-corps do pay them and did benefit. So that allows Yagan to set up S-corps as a control group and see what the effect of the massive dividend tax cut on C-corporations has been. -- [Yagan finds no difference in things we want to encourage] -- The one thing that does increase for C-corps of course, is the disgorgement of cash to shareholders -- an increase in dividends and share buybacks. This shows that these corps are responding to the tax cut; they just happen to be decisions that benefit, well, probably not you. If right now you are worried that too much cash is leaving firms to benefit a handful of investors while the real economy stagnates, suddenly Clinton-era levels of dividend taxation don’t look so bad. -- downloaded pdf to Note
paper  US_economy  US_politics  21stC  taxes  corporate_finance  corporate_tax  capital  dividends  investment  shareholders  investors  GOP  shareholder_value  tax_policy  tax_reform  supply-side  trickle-down  Obama_administration  Bush_administration  distribution-income  distribution-wealth  1-percent  downloaded  EF-add 
january 2015 by dunnettreader

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