| 1. |
- Ahlin, Åsa, 1970-
(författare)
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Compulsory Schooling in a Decentralized Setting: Studies of the Swedish Case
- 2004
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- Essay 1 (with Eva Johansson) investigates the demand for local public schooling using survey data, a method previously never applied to Sweden. Estimating a demand specification corresponding to that in U.S. studies, more elastic demand than in the U.S. is found. In an alternative specification, a more inelastic demand is indicated, in line with earlier findings on demand for total local spending in Sweden. Support for the hypothesis that municipal employees tend to have higher preferences for local public school spending than other employees is found. The differences in elasticities are, however, not statistically significant.Essay 2 investigates school competition and its implications for student performance. Using a value added specification, increased local school competition is shown to have positive effects on average performance in mathematics, but no significant effects in English or Swedish test performance. Immigrant pupils and those in need of special education tend to gain more from increased school competition, while adverse effects on students from low education families are found in terms of English and Swedish performance. Quantile regressions indicate homogeneous effects on low and high performing students.Essay 3 (with Eva Mörk) investigates the extent to which grants, local tax base, preferences and structural characteristics affected local school resources in connection with the decentralization of compulsory schooling in Sweden, using municipal panel data covering 1989-1995. The main arguments against decentralization are not supported by our findings. First, school spending as well as teacher density is found to be more equally distributed across municipalities following decentralization. Second, local tax capacity is not found to influence local school resources more in the decentralized than in the centralized regime. Furthermore, targeted grants have a significant impact on resources while general grants have not.Essay 4 examines teacher mobility in Sweden. Particular attention is paid to the role of working conditions. Various school attributes are used to proxy for teachers’ working conditions, including the average student performance, school resources and student composition. The results indicate a link, in the expected direction, between school attributes and the probability that a teacher will leave her teaching position in favour of another school. Also, teachers with higher wages tend to have a lower propensity of leaving their school. In contrast to previous US findings, the estimated impact of wages are not sensitive to whether or not controls for school attributes are included.
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| 2. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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On environmental taxation under uncertain environmental damage
- 2003
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Ingår i: Environmental and Resource Economics. - : Springer. - 0924-6460 .- 1573-1502. ; 24:2, s. 183-196
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Tidskriftsartikel (refereegranskat)abstract
- This paper addresses optimal taxation, when therelationship between the consumption of a`dirty' good and the resulting environmentaldamage is uncertain and treated as a randomvariable by policy makers. The main purpose isto analyze how increased uncertainty, measuredas a mean preserving increase in the spread ofthis random variable, affects the optimalcommodity tax on the dirty consumption good. Incase the only task of government is to correctthe environmental externality, and if thepreferences are characterized by nondecreasingabsolute risk aversion, we find that thecommodity tax on the dirty consumption goodincreases in response to additionaluncertainty. If, on the other hand, thegovernment provides a public good and uses alump-sum tax in addition to the commodity tax,it is possible that the commodity tax decreasesas a response to additional uncertainty, evenif the preferences are characterized bynondecreasing absolute risk aversion. A similarresult emerges, although for different reasons,if the lump-sum tax is replaced by a laborincome tax.
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| 3. |
- Aronsson, Thomas, et al.
(författare)
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On environmental taxation under uncertainty
- 1999
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper addresses optimal taxation, when the relationship between consumption and environmental damage is uncertain and treated as a random variable by policy makers. The main purpose is to analyze how additional uncertainty about this relationship affects the optimal unit tax on the consumption good that is causing environmental damage. We find that the optimal response to this tax depends on (i) the attitudes towards risk and (ii) how other policy instruments affect the demand for the good that is causing damage to the environment.
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| 4. |
- Aronsson, Thomas, et al.
(författare)
-
On environmental taxation under uncertainty
- 1999
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper addresses optimal taxation, when the relationship between consumption and environmental damage is uncertain and treated as a random variable by policy makers. The main purpose is to analyze how additional uncertainty about this relationship aff
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| 5. |
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| 6. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Optimal taxation, global externalities and Labor mobility
- 2003
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Ingår i: Journal of Public Economics. - : Elsevier. - 0047-2727 .- 1879-2316. ; 87:12, s. 2749-2764
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Tidskriftsartikel (refereegranskat)abstract
- This paper concerns transboundary environmental problems in the context of an optimal tax model. We assume that part of the labor force is mobile across countries, and that the set of tax instruments includes a nonlinear income tax and a commodity tax on the ‘dirty’ good that is causing damage to the environment. The purpose is to compare the (globally optimal) second best policy of a cooperative equilibrium with the policy implicit in a noncooperative equilibrium. We show that the commodity taxes differ between equilibria because of: (i) transboundary externalities not internalized by national governments, (ii) interaction effects between environmental and other policies, and (iii) labor mobility.
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| 7. |
- Aronsson, Thomas, et al.
(författare)
-
Optimal Taxation, Global Externalities and Labor Mobility
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper addresses transboundary environmental problems in the context of an optimal tax problem, when part of the labor force is mobile across countries. The policy instruments include both commodity taxation and nonlinear income taxation. We show how
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| 8. |
- Aronsson, Thomas, et al.
(författare)
-
Optimal taxation, global externalities and labor mobility
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper addresses transboundary environmental problems in the context of an optimal tax problem, when part of the labor force is mobile across countries. The policy instruments include both commodity taxation and nonlinear income taxation. We show how the tax policy in a noncooperative equilibrium differs from that corresponding to a cooperative equilibrium. The results also indicate how a ’global policy maker’ must act in order to make the national policy makers replicate the cooperative equilibrium.
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| 9. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Redistribution and provision of public goods in an economic federation
- 2008
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Ingår i: Journal of Public Economic Theory. - : John Wiley & Sons. - 1097-3923 .- 1467-9779. ; 10:1, s. 125-143
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Tidskriftsartikel (refereegranskat)abstract
- This paper concerns redistribution and public good provision in an economic federation with two levels of government: a local government in each locality and a (first mover) central government. Each locality is characterized by two ability-types, and the ability-distribution differs across localities. The central government redistributes via a nonlinear income tax and a lump-sum transfer to each local government, while the local governments use proportional income taxes and provide local public goods. We show how the redistributive role of taxation is combined with a corrective role, and how the central government can implement the second best resource allocation.
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| 10. |
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| 11. |
- Aronsson, Thomas, et al.
(författare)
-
Redistribution and provision of public goods in an economic federation
- 2004
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper concerns redistribution and provision of public goods in an economic federation with two levels of government: a local government in each locality and a central government for the economic federation as a whole. We assume that each locality is characterized by two ability-types (high and low), and that their distribution differs between localities. The set of policy instruments facing the central government consists of a nonlinear income tax and a lump-sum transfer to each local government, while the local governments use proportional income taxes and the transfers from the central government to finance the provision of local public goods. The purpose is to characterize the tax and expenditure structure in a decentralized setting, where the central and local governments have distinct roles to play, and also compare this tax and expenditure structure with the second best resource allocation. We show how the redistributive role of taxation is combined with a corrective role, since tax base sharing among the central and local governments gives rise to a vertical fiscal external effect. In addition, the central government does not in general implement the second best resource allocation with the instruments at its disposal.
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| 12. |
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| 13. |
- Aronsson, Thomas, et al.
(författare)
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The Standard Deviation of Life-Length, Retirement Incentives, and Optimal Pension Design
- 2010
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In this paper, we consider how the retirement age as well as a tax financed pension system ought to respond to a change in the standard deviation of the length of life. In a first best framework, where a benevolent government exercises perfect control over the individuals’ labor supply and retirement-decisions, the results show that a decrease in the standard deviation of life-length leads to an increase in the optimal retirement age and vice versa, if the preferences for “the number of years spent in retirement” are characterized by constant or decreasing absolute risk aversion. A similar result follows in a second best setting, where the government raises revenue via a proportional tax (or pension fee) to finance a lump-sum benefit per year spent in retirement. We consider two versions of this model, one with a mandatory retirement age decided upon by the government and the other where the retirement age is a private decision-variable.
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| 14. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Uncertain length of life, retirement age, and optimal pension design
- 2018
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In this paper, we consider how the hours of work and retirement age ought to respond to a change in the uncertainty of the length of life. In a first best framework, where a benevolent government exercises perfect control over the individuals' labor supply and retirement-decisions, the results show that a decrease in the standard deviation of life-length leads to an increase in the optimal retirement age and a decrease in the hours of work per period spent working. This result is robust, and is also derived in models of decentralized decision-making where individuals decide on their own consumption, labor supply, and retirement age, and where the government attempts to affect their behavior and welfare through redistribution and pension policy.
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| 15. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Uncertain length of life, retirement age, and pension design
- 2024
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Ingår i: Finanzarchiv. - : Mohr Siebeck. - 0015-2218 .- 1614-0974. ; 80:1, s. 111-128
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we consider how the hours of work and retirement age ought to respond to a change in the uncertainty of the length of life. The results show that a decrease in the standard deviation of life-length leads to an increase in the socially optimal retirement age and a decrease in the hours of work per period spent working, if the preferences for the number of years spent in retirement are characterized by constant or decreasing absolute risk version. We also show how a benevolent policy maker can implement the social optimum through an actuarially fair pension policy.
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| 16. |
- Aronsson, Thomas, et al.
(författare)
-
Vad är optimal beskattning?
- 2010
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Ingår i: Framtider. - 0281-0492. ; :3, s. 18-21
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Tidskriftsartikel (populärvet., debatt m.m.)abstract
- Hur tar man in skatter utan att det nämnvärt påverkar individernas ochföretagens agerande? Artikeln handlar om optimal beskattning som en vägatt skapa skatteintäkter för att finansiera omfördelningen till samhälletsbehövande – utan att samhällsekonomin störs. Ekonomerna ThomasAronsson, Spencer Bastani och Sören Blomquist presenterar forskningsfältetoch diskuterar samspelet mellan inkomstskatter och varuskatter.
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| 17. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Vad är optimal beskattning
- 2010
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Ingår i: Framtider. - Stockholm : Institutet för framtidsstudier. - 0281-0492. ; 3, s. 18-21
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Tidskriftsartikel (populärvet., debatt m.m.)
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| 18. |
- Aronsson, Tomas, et al.
(författare)
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Where Should the Elderly Live and Who Should Pay for their Care? A Study in Demographics and Geographical Economics
- 2007
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- There is a rich literature analyzing the problems that will arise as the share of elderly and retired in the population increases in the near future. However, the locational decisions among the elderly as well as their implications in terms of taxes/transfers and of allocation of responsibilities for elderly care between the federal and local levels have not received much attention. In this paper we aim at investigating these issues. For this purpose we explore a model where there is a big city and a set of small villages, and where congestion effects and agglomeration forces are at work at the level of the big city. We also assume that the population is divided between two groups of agents, workers and retired, which differ with respect to the degree of mobility. In the first part of the paper we study and characterize the inefficiencies that arise because of individuals’ free location choice in the context of a unitary government. In the second part of the paper we consider a fiscal federalism structure and we investigate the suitable instruments that are needed in order to decentralize the optimal allocation obtained under full centralization.
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| 19. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Where Should the Eldery Live and Who Should Pay for Their Care?
- 2010
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Ingår i: Scandinavian Journal of Economics. - : Wiley. - 0347-0520 .- 1467-9442. ; 112:2, s. 289-314
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Tidskriftsartikel (refereegranskat)abstract
- We consider a model with a population consisting of earners and retired persons; elderly care is publicly provided. There is one big city, where congestion effects and agglomeration forces are at work, and a number of small villages. We show how the externalities related to population mobility lead to an inefficient spatial distribution of earners and retirees, and we characterize the second-best solution. Decentralization of this solution in a fiscal federalism structure requires the use of taxes and subsidies proportional to the number of earners and retired persons living in the city and the villages.
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| 20. |
- Bastani, Spencer, Docent, 1982-, et al.
(författare)
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Child care subsidies, quality and optimal income taxation
- 2020
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7731 .- 1945-774X. ; 12:4, s. 1-37
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Tidskriftsartikel (refereegranskat)abstract
- We study child care subsidies in a Mirrleesian optimal tax framework where parents choose both the quantity and quality of child care. Child care services not only enable parents to work, but also contribute to children’s human capital. We examine the conditions under which child care expenditures should be encouraged or discouraged by the tax system under different assumptions regarding the available policy instruments. Using a quantitative model calibrated to the US economy, we illustrate the possibility that child care expenditures should be taxed rather than subsidized, and discuss the merits of public provision schemes for child care.
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| 21. |
- Bastani, Spencer, et al.
(författare)
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Child Care Subsidies, Quality, and Optimal Income Taxation
- 2017
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In this paper we examine the desirability of subsidizing child care expenditures in a model where parents can choose both the quantity and the quality of child care services they purchase in the market. Our vehicle of analysis is a Mirrleesian optimal tax framework where child care services not only enable parents to work, but also contribute to children's formation of human capital. In addition, there are externalities related to the parents' choice of child care arrangements for their offspring. Using a quantitative simulation model calibrated to the US economy, we evaluate the relative merits of some the most common forms of child care subsidies (tax deductions, tax credits, and opting-out public provision schemes) in terms of their effectiveness in alleviating the distortions associated with income taxation and increasing the quality of child care chosen by parents.
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| 22. |
- Bastani, Spencer, 1982-
(författare)
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Essays on the Economics of Income Taxation
- 2012
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- This thesis consists of five self-contained essays.Essay 1. (with Sören Blomquist and Luca Micheletto) Using a calibrated overlapping-generations model we quantify the welfare gains of an age-dependent labor income tax. Agents face uncertainty regarding future abilities and can transfer consumption across periods through savings. The welfare gain of switching from an age-independent to an age-dependent nonlinear tax varies between 2.4% and 4% of GDP. Part of the welfare gain is due to capital accumulation effects and part descends from relaxing incentive-compatibility constraints. The welfare gain is of about the same magnitude as the welfare gain that can be achieved by moving from a linear- to a nonlinear labor income tax. Finally, the welfare loss from tax-exempting interest income is negligible under an optimal age-dependent labor income tax.Essay 2. (with Sören Blomquist and Luca Micheletto)Previous literature has shown that public provision of private goods can be a welfare-enhancing device in second-best settings where governments pursue redistributive goals. However, three issues have so far been neglected. First, the case for supplementing an optimal nonlinear income tax with public provision of private goods has been made in models where agents differ only in terms of market ability. Second, the magnitude of the welfare gains achievable through public provision schemes has not been assessed. Third, the similarities/differences between public provision schemes and tagging schemes have not been thoroughly analyzed. Our purpose in this paper is therefore threefold: first, to extend previous contributions by incorporating in the theoretical analysis both heterogeneity in market ability and in the need for the publicly provided good; second, to perform numerical simulations to quantify the size of the potential welfare gains achievable by introducing a public provision scheme, and to characterize the conditions under which these welfare gains are sizeable; finally, to compare the welfare gains from public provision with the welfare gains from tagging. Essay 3. (with Sören Blomquist and Luca Micheletto)Subsidized child care is a common phenomenon in both Europe and the United States. In this paper we study the efficiency of some of the most common types of child care subsidies. These are a (refundable) tax credit, tax deductibility and public provision. We evaluate the relative efficiency of these instruments using a quantitative simulation model calibrated to resemble the US economy. In our framework there is a special tax treatment for families with children of child care age, which is based on an assumption that agrees with facts pertaining to actual circumstances in the United States, as well as many other countries. We keep the net tax revenue for this group of tax payers constant, hence the subsidies to child care are paid for by the group itself. It is a commonly held view that in a 'good society' all children should have equal opportunities in life. Many proponents of subsidized childcare argue that one way to move in this direction is to allow all children access to good quality child care. We capture this ideological perspective by using a paternalistic social welfare function which places special emphasis on the quality of child care purchased by households. Using a standard social welfare function we find tax deductibility to be the most efficient instrument to subsidize child care and public provision the least efficient instrument. These results are completely reversed when using the paternalistic welfare function and when society has the goal of providing all children with access to good quality child care. Public provision then becomes the best way to subsidize child care. An important aspect of public provision is that it is an efficient instrument in raising the quality of child care. Essay 4. In a recent paper Alesina et al. (2011) construct a model in which different labor supply elasticities for men and women emerge endogenously from intra-household bargaining. In this paper I explore the optimal tax implications of their model in an economy with both singles and couples and inequality across as well as within households. In the model, the welfare of married women can be improved by lowering taxes for single women. However, this benefit must be weighed against the welfare cost of taxing single men and women at different rates. Moreover, if single men earn more than single women, the welfare of married women can alternatively be improved by a gender-neutral tax scheme which taxes singles at a higher rate. Because the government is concerned not only with equalizing utilities within families, but also with the redistribution between high income and low income households, gender-based adjustments in the income tax must be weighed against the welfare consequences of changing the progressivity of the tax system. I find that larger lump-sum transfers to women is always optimal. Interestingly, marginal tax rates, on the other hand, should be lower for women only if the exogenous bargaining power of men is moderate. The welfare gains of gender based taxation are sizable and the welfare gains of having tax instruments which depend on household composition are even larger.Essay 5. (with Håkan Selin) Recent microeconometric studies of taxpayers' responsiveness to taxation have shown that intensive margin labor supply and earnings elasticities typically are modest and sometimes equal to zero. However,a common view is that long-run responses might still be large since micro-estimates are downward biased owing to optimization frictions. In this paper we estimate the taxable income elasticity at a very large kink point of the Swedish tax schedule using the bunching method. During the period of study the change in the log net-of-tax rate reached a maximum value of 45.6%. Interestingly, we obtain a precise elasticity estimate of zero for wage earners at this large kink. The size of the kink allows us to derive tighter bounds on the long-run elasticity than previous studies. If wage earners on average tolerate 1% of their disposable income in optimization costs, the upper bound on the long-run taxable income elasticity is 0.39. We also evaluate the performance of the bunching estimator by performing Monte Carlo simulations.
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| 23. |
- Bastani, Spencer, et al.
(författare)
-
How should commodities be taxed? : A counter-argument to the recommendation in the Mirrlees Review
- 2015
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Ingår i: Oxford Economic Papers. - : Oxford University Press (OUP). - 0030-7653 .- 1464-3812. ; 67:2, s. 455-478
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Tidskriftsartikel (refereegranskat)abstract
- The Mirrlees Review recommends that commodity taxation should in general be uniform, but with some goods consumed in conjunction with labour supply (such as child care) left untaxed. This article examines the validity of this claim in an optimal income tax framework. Contrary to the recommendation of the review, our theoretical results imply that even if all goods other than the good needed for working are separable from leisure, the optimal tax on these goods should not be uniform. Instead, commodity taxes should discourage consumption of goods with large expenditure elasticities. Our results imply that the optimal commodity tax system is dependent on the expenditure side of the government. For instance, if the government fully subsidizes the cost of the good needed for working, then commodity taxation is uniform under the standard separability assumption. Calibration exercises suggest that these results can be quantitatively important.
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| 24. |
- Bastani, Spencer, 1982-, et al.
(författare)
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Nonlinear and piecewise linear income taxation, and the subsidization of work-related goods
- 2019
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Ingår i: International Tax and Public Finance. - : SPRINGER. - 0927-5940 .- 1573-6970. ; 26:4, s. 806-834
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Tidskriftsartikel (refereegranskat)abstract
- We investigate how the social welfare gain of subsidizing work-related goods depends on whether the underlying income tax system is linear, piecewise linear or fully nonlinear, focusing on child care services as a paradigmatic example of goods/services that are complements with labor supply. Our quantitative analysis employs an empirically relevant labor supply model and shows that the welfare gain of an optimally chosen subsidy is negligible when the optimal income tax is restricted to be linear but about the same as under fully nonlinear taxation when the optimal income tax is restricted to be piecewise linear. Our findings enhance the policy relevance of the optimal tax argument in favor of providing subsidies to work-related goods and also shed light on the relative welfare gains of employing piecewise linear rather than fully nonlinear income taxes.
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| 25. |
- Bastani, Spencer, et al.
(författare)
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Optimal commodity taxation with varying quality of goods
- 2016
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Ingår i: Research in Economics. - : Elsevier. - 1090-9443 .- 1090-9451. ; 70:1, s. 89-100
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Tidskriftsartikel (refereegranskat)abstract
- A standard result in the optimal taxation literature is that when agents differ in market ability and the government aims at redistributing from high- to low-skilled agents by means of an optimal nonlinear labor income tax and a set of commodity taxes, an optimally designed commodity tax structure should encourage (discourage) the consumption of goods/services that are complement with labor (leisure). In this paper we highlight that when agents can choose both the quality and the quantity of a given good/service, this standard commodity tax result needs to be qualified. First, we show that it becomes relevant to distinguish between specific and ad valorem taxes/subsidies. Second, whether the standard result holds or not depends on how the concept of labor (leisure) complement is defined, namely, whether it is defined in terms of number of units or in terms of expenditure. We also show that levying specific and ad valorem taxes at opposite signs on a given good can be a feature of the second-best optimum.
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| 26. |
- Bastani, Spencer, et al.
(författare)
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Optimal Inequality behind the Veil of How Should Commodities Be Taxed? : A Counterargument to the Recommendation in the Mirrlees Review
- 2013
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The Mirrlees Review recommends that commodity taxation should in general be uniform, but with some goods consumed in conjunction with labour supply (such as child care) left untaxed. This paper examines the validity of this claim in an optimal income tax framework. Contrary to the recommendation of the Review, our theoretical results imply that even if all goods other than the good needed for working are separable from leisure, the optimal tax on these goods should not be uniform. Instead, goods with larger expenditure elasticities should be discouraged relatively more by the tax system. If the government fully subsidises the cost of the good needed for working, then commodity taxation is uniform under the standard separability assumption. Our results imply that the optimal commodity tax system is dependent on the expenditure side of the government. A calibration exercise presented in the paper suggests that these results can be quantitatively important.
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| 27. |
- Bastani, Spencer, Docent, 1982-, et al.
(författare)
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Pareto efficient income taxation without single-crossing
- 2020
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Ingår i: Social Choice and Welfare. - : Springer. - 0176-1714 .- 1432-217X. ; 55:3, s. 547-594
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Tidskriftsartikel (refereegranskat)abstract
- We provide a full characterization of a two-type optimal nonlinear income tax model where the single-crossing condition is violated due to an assumption that agents differ both in terms of market abilities and in terms of their needs for a work-related good. We set up a Pareto-efficient tax problem and analyze the entire second-best Pareto-frontier, highlighting several non-standard results, such as the possibility of income re-ranking relative to the laissez-faire and gaps in the Pareto-frontier.
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| 28. |
- Bastani, Spencer, Docent, 1982-, et al.
(författare)
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Public pensions in a multi-period Mirrleesian income tax model
- 2016
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Using an OLG model with skill uncertainty and private savings, we investigate whether an optimally designed set of public pension transfers can usefully supplement a nonlinear labor income tax as a welfare-enhancing policy instrument. We consider a Mirrleesian setting where agents' skills are private information and highlight that, even though pensions, by crowding out private savings, adversely affect the achievement of the golden-rule, they can be used as a mimicking-deterring device that makes it easier for the government to achieve the desired redistributive goals.
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| 29. |
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| 30. |
- Bastani, Spencer, et al.
(författare)
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Public Provision of Private Goods, Tagging and Optimal Income Taxation with Heterogeneity in Needs
- 2010
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Previous literature has shown that public provision of private goods can be a welfareenhancing device in second-best settings where governments pursue redistributive goals. However, three issues have so far been neglected. First, the case for supplementing an optimal nonlinear income tax with public provision of private goods has been made in models where agents dier only in terms of market ability. Second, the magnitude of the welfare gains achievable through public provision schemes has not been assessed. Third, the similarities/dierences between public provision schemes and tagging schemes have not been thoroughly analyzed. Our purpose in this paper is therefore threefold: rst, to extend previous contributions by incorporating in the theoretical analysis both heterogeneity in market ability and in the need for the publicly provided good; second, to perform numerical simulations to quantify the size of the potential welfare gains achievableby introducing a public provision scheme, and to characterize the conditions under which these welfare gains are sizeable; nally, to compare the welfare gains from public provision with the welfare gains from tagging.
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| 31. |
- Bastani, Spencer, et al.
(författare)
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The Welfare Gains of Age Related Optimal Income Taxation
- 2010
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Using a calibrated overlapping generations model we quantify the welfare gains of an age dependent income tax. Agents face uncertainty regarding future abilities and can by saving transfer consumption across periods. The welfare gain of switching from an age-independent to an age-dependent nonlinear tax amounts in our benchmark model to around three percent of GDP. The gains are particularly high when there are restrictions on debt policy. The gains of using a nonlinear- as opposed to a linear tax are even larger. Surprisingly, it is of secondary importance to optimally choose the tax on interest income.
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| 32. |
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| 33. |
- Bastani, Spencer, et al.
(författare)
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Welfare Gains Of Age-Related Optimal Income Taxation
- 2013
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Ingår i: International Economic Review. - : Wiley. - 0020-6598 .- 1468-2354. ; 54:4, s. 1219-1249
-
Tidskriftsartikel (refereegranskat)abstract
- Using an overlapping generations model with skill uncertainty and private savings, we quantify the gains of age-dependent labor income taxation. The total steady-state welfare gain of switching from age-independent to age-dependent nonlinear taxation varies between 2.4% and 4% of GDP. Part of the gain descends from relaxing incentive-compatibility constraints and part is due to capital-accumulation effects. The welfare gain is of about the same magnitude as that which can be achieved by moving from linear to nonlinear income taxation. Finally, the welfare loss from tax-exempting interest income is negligible under an optimal age-dependent labor income tax.
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| 34. |
- Blomquist, N. Sören, et al.
(författare)
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The political economy of publicly provided private goods
- 1998
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- A large share of public funds is spent on private goods (education, health care, day care, etc.). This paper integrates two different approaches to the analysis of public provision of private goods. While normative public economics has established an effi
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| 39. |
- Blomquist, Sören, et al.
(författare)
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Age related optimal income taxation
- 2003
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The focus of the present paper is on the intragenerational effects of nonlinear income taxation in a multiperiod framework. We investigate whether it is possible to achieve redistribution at smaller efficiency costs by enlarging the message space adopted in standard tax system (which only includes reported income) to consider also the age of taxpayers. Since it would be awkward to analyze an age related tax without taking into account the time-dimension, we use an intertemporal extension of the Stiglitz-Stern (1982, 1982) discrete adaptation of the Mirrlees (1971) optimal income taxation model. In the simplest version of the model we neglect the possibility of savings. This case can be interpreted as a situation with extreme liquidity constraints. It is shown that switching to an age related tax system opens the way for a Pareto improving tax reform entailing a cut in marginal tax rates for young agents. In a second version of the model we retain the possibility of savings and, assuming that the policy maker can tax interest incomes on a linear scale, we also analyze the optimal values of the interest income tax rate for the age dependent and the age independent tax systems.
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| 40. |
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| 41. |
- Blomquist,, Sören, et al.
(författare)
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Age-related optimal income taxation
- 2008
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Ingår i: Scandinavian Journal of Economics. - : Wiley. - 0347-0520 .- 1467-9442. ; 110:1, s. 45-71
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Tidskriftsartikel (refereegranskat)abstract
- In most countries, average income varies with age. In this paper we investigate if and how it is possible to enhance the redistributive mechanism by relating tax payments to age. Using an OLG model where some individuals are low skilled all their life while others are low skilled when young but high skilled when old, we first show how an age dependent optimal income tax can Pareto improve upon an age independent income tax. We then characterize the optimal age dependent income tax. A tax on interest income is part of the optimal tax structure..
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| 46. |
- Blomquist, Sören, et al.
(författare)
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Hourly Wage Rate and Taxable Labor Income Responsiveness to Changes in Marginal Tax Rates
- 2008
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Recently, a voluminous literature estimating the taxable income elasticity has emerged as an important field in empirical public economics. However, to a large extent it is still unknown how the hourly wage rate, an important component of taxable income, reacts to changes in marginal tax rates. In this study we use a rich panel data set and a sequence of tax reforms that took place in Sweden during the 1980’s to estimate the elasticity of the hourly wage rate with respect to the net-of-tax rate. While carefully accounting for the endogeneity of marginal tax rates as well as other factors that determine wage rates we do find a statistically significant response both among married men and married women. The hourly wage rate elasticity with respect to the net-of-tax rate is estimated to 0.14-0.16 for males and 0.41-0.57 for females. In addition, we obtain uncompensated taxable labor income elasticities of around 0.21 for men and 0.96-1.44 for women. In contrast to earlier studies, we also find significant income effects for males. Accordingly, for males the compensated taxable labor income elasticity is about 4 percentage points higher than the uncompensated one.
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| 47. |
- Blomquist, Sören, et al.
(författare)
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Hourly wage rate and taxable labor income responsiveness to changes in marginal tax rates
- 2010
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Ingår i: Journal of Public Economics. - : Elsevier BV. - 0047-2727 .- 1879-2316. ; 94:11-12, s. 878-889
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Tidskriftsartikel (refereegranskat)abstract
- Recently, a voluminous literature estimating the taxable income elasticity has emerged as an important field in empirical public economics. However, to a large extent it is still unknown how the hourly wage rate, an important component of taxable income, reacts to changes in marginal tax rates. In this study we use a rich panel data set and a sequence of tax reforms that took place in Sweden during the 1980s to estimate the elasticity of the hourly wage rate as well as the taxable labor income elasticity with respect to the net-of-tax rate. We also estimate elasticities with respect to the non-labor income in a way that is novel in the literature. While carefully accounting for the endogeneity of marginal tax rates we find a statistically significant response in wage rates both among married men and women. The estimates of the hourly wage rate elasticity with respect to the net-of-tax rate fall in the range of 0.14-0.16 for males and 0.41-0.57 for females, whereas the corresponding taxable labor income elasticity estimates hover between 0.19-0.21 for males and 0.96-1.44 for women. Moreover, for men we find that the taxable labor income elasticity with respect to non-labor income is statistically significant; the point estimate being -0.07. This implies that the compensated taxable labor income elasticity is about 5 percentage points higher than the uncompensated one. In general, we consider the estimates for males to be more certain and robust than the estimates for females.
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| 48. |
- Blomquist, Sören, et al.
(författare)
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Individual Heterogeneity, Nonlinear Budget Sets, and Taxable Income
- 2014
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Given the key role of the taxable income elasticity in designing an optimal tax system there are many studies attempting to estimate this elasticity. A problem with most of these studies is that strong functional form assumptions are used and that heterogeneity in preferences is not allowed for. Building on Blomquist and Newey (2002) we in this paper develop a nonparametric method to estimate expected taxable income as a function of a nonlinear budget set, taking multidimensional heterogeneity and optimization errors fully into account. We reduce the dimensionality of the problem by exploiting structure implied by utility maximization with piecewise linear convex budget sets. We apply the method to Swedish data and estimate for prime age males a significant net of tax elasticity of 0.6 and a significant income elasticity of -0.08.
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| 49. |
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| 50. |
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