《CHAP19The-Equity-Implications-of-Taxation-Tax-Inci.ppt》由会员分享，可在线阅读，更多相关《CHAP19The-Equity-Implications-of-Taxation-Tax-Inci.ppt（36页珍藏版）》请在taowenge.com淘文阁网|工程机械CAD图纸|机械工程制图|CAD装配图下载|SolidWorks_CaTia_CAD_UG_PROE_设计图分享下载上搜索。
1、Prepared by:FERNANDO QUIJANO,YVONN QUIJANO,KYLE THIEL&APARNA SUBRAMANIAN19The Equity Implications ofTaxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberPublic Finance and Public Policy,2/eJonathan GruberChapter 19 The Equity Implications of Taxation:Tax I
2、ncidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan Gruber19.5 ConclusionThe Equity Implications of Taxation:Tax Incidence19.3 General Equilibrium Tax Incidence19.2 Tax Incidence Extensions19.1 The Three Rules of Tax IncidenceChapter 1919.4 The Incidence of Taxation in the U
3、nited Statestax incidence Assessing which party(consumers or producers)bears the true burden of a tax.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Equity Implications of Taxation:Tax IncidenceChapter 19 The
4、 Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1The Statutory Burden of a Tax Does Not Describe Who Really Bears the Taxstatutory incidence The burden of a tax borne by the party that sends t
5、he check to the government.economic incidence The burden of taxation measured by the change in the resources available to any economic agent as a result of taxation.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan Gruber
6、Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1The Statutory Burden of a Tax Does Not Describe Who Really Bears the TaxChapter 19 The Equity Implications of Taxation:Tax Incide
7、nce 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1The Statutory Burden of a Tax Does Not Describe Who Really Bears the TaxBurden of the Tax on Consumers and Producerstax wedge The difference between what consumers pay and what producers
8、 receive(net of tax)from a transaction.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1The Side of the Market on Which the Tax Is Imposed Is Irrelevant to the Distribution of th
9、e Tax BurdensChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules o
10、f Tax Incidence19.1Parties with Inelastic Supply or Demand Bear Taxes;Parties with Elastic Supply or Demand Avoid ThemThe incidence of taxation on producers and consumers is ultimately determined by the elasticities of supply and demand on how responsive the quantity supplied or demanded is to price
11、 changes.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1Parties with Inelastic Supply or Demand Bear Taxes;Parties with Elastic Supply or Demand Avoid ThemPerfectly Inelastic D
12、emandChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax In
13、cidence19.1Parties with Inelastic Supply or Demand Bear Taxes;Parties with Elastic Supply or Demand Avoid ThemPerfectly Elastic DemandChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implicati
14、ons of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1Parties with Inelastic Supply or Demand Bear Taxes;Parties with Elastic Supply or Demand Avoid ThemSupply ElasticitiesChapter 19 The Equity Implications of Taxa
15、tion:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Three Rules of Tax Incidence19.1Reminder:Tax Incidence Is About Prices,Not QuantitiesWhen the demand for gas is perfectly elastic,we claimed that consumers bore none of the burden of taxation,and yet the
16、 quantity of gas consumed fell dramatically.Doesnt this decrease in consumption make consumers worse off?If so,shouldnt that be taken into account when determining tax incidence?The answer to both questions is“no”because,at both the old and new equilibria,consumers in this case are indifferent betwe
17、en buying the gas and spending their money elsewhere.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Pol
18、icy,2/e,Jonathan GruberTax Incidence Extensions19.2Tax Incidence in Factor MarketsChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberTax Incidence Extensions19.2Tax Incidence in Factor MarketsImpediments to Wage Adju
19、stmentminimum wage Legally mandated minimum amount that workers must be paid for each hour of work.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberTax Incidence Extensions19.2Tax Incidence in Factor MarketsImpedim
20、ents to Wage AdjustmentChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberTax Incidence Extensions19.2Tax Incidence in Imperfectly Competitive Marketsmonopoly markets Markets in which there is only one supplier of a
21、good.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberTax Incidence Extensions19.2Tax Incidence in Imperfectly Competitive MarketsBackground:Equilibrium in Monopoly MarketsChapter 19 The Equity Implications of Taxa
22、tion:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberTax Incidence Extensions19.2Balanced Budget Tax Incidencebalanced budget
23、 incidence Tax incidence analysis thataccounts for both the tax andthe benefits it brings.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberGeneral Equilibrium Tax Incidence19.3partial equilibrium tax incidence Anal
24、ysis that considers the impact of a tax on a market in isolation.general equilibrium tax incidenceAnalysis that considers the effects on related markets of a tax imposed on one market.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,
25、2/e,Jonathan GruberGeneral Equilibrium Tax Incidence19.3Effects of a Restaurant Tax:A General Equilibrium ExampleChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implications of Taxation:Tax I
26、ncidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberGeneral Equilibrium Tax Incidence19.3Issues to Consider in General Equilibrium Incidence AnalysisEffect of Time Period on Tax Incidence:Short Run Versus Long RunFactors that are always inelastically demanded or suppli
27、ed in both the short and long run bear taxes in the long run.What does it mean for capital supply to be elastic?Think of capital investments already made as irretrievable;that is why capital supply is inelastic in the short run.In the long run,however,restaurants need new infusions of capital to sta
28、y afloat.The elasticity of capital supply in the long run arises from the ability of investors to choose whether to reinvest in a firm.If there is a tax on the good produced by the firm,and this tax is passed on to capital investors in the form of a lower return,then they are less likely to reinvest
29、 in the restaurant.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberGeneral Equilibrium Tax Incidence19.3Issues to Consider in General Equilibrium Incidence AnalysisEffect of Tax Scope on Tax IncidenceThe scope of
30、the tax matters to incidence analysis because it determines which elasticities are relevant to the analysis:taxes that are broader based are harder to avoid than taxes that are narrower,so the response of producers and consumers to the tax will be smaller and more inelastic.Chapter 19 The Equity Imp
31、lications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Incidence of Taxation in the United States19.4The C
32、BO analysis considers the incidence of the full set of taxes levied by the federal government.Their key assumptions follow:1.Income taxes are borne fully by the households that pay them.2.Payroll taxes are borne fully by workers,regardless of whether these taxes are paid by the workers or by the fir
33、m.3.Excise taxes are fully shifted to prices and so are borne by individuals in proportion to their consumption of the taxed item.4.Corporate taxes are fully shifted to the owners of capital and so are borne in proportion to each individuals capital income.CBO Incidence AssumptionsChapter 19 The Equ
34、ity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,Jonathan Gruber,2eTHE INCIDENCE OF EXCISE TAXATIONAnalysts can compare the change in goods prices in the states raising their excise tax relative to states not changing their excise tax,to measure the e
35、ffect of each 1 rise in excise taxes on goods prices.An excellent example is excise taxes on cigarettes.The excise tax on cigarettes varies widely across the U.S.states,from a low of 2.5 per pack in Virginia to a high of$1.51 per pack in Connecticut and Massachusetts.Since 1990,New Jersey has increa
36、sed its tax rate nearly sixfold(from 27 per pack to$1.50),while Arizona has increased its tax nearly eightfold(from 15 to$1.18).A number of studies have examined the change in cigarette prices when there are excise tax increases on cigarettes,comparing states increasing their tax to other states tha
37、t do not raise taxes.These studies uniformly conclude that the price of cigarettes rises by the full amount of the excise tax.E M P I R I C A L E V I D E N C EChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe In
38、cidence of Taxation in the United States19.4Results of CBO Incidence AnalysisChapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Incidence of Taxation in the United States19.4Results of CBO Incidence AnalysisChapt
39、er 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberThe Incidence of Taxation in the United States19.4Current Versus Lifetime Income Incidencecurrent tax incidence The incidence of a tax in relation to an individuals curre
40、nt resources.lifetime tax incidence The incidence of a tax in relation to an individuals lifetime resources.Chapter 19 The Equity Implications of Taxation:Tax Incidence 2007 Worth Publishers Public Finance and Public Policy,2/e,Jonathan GruberConclusion19.5The“fairness”of any tax reform is one of the primary considerations in policy makers positions on tax policy.Therefore,it is crucial for public finance economists to have a deep understanding of who really bears the burden of taxation so that we can best inform these distributional debates over the fairness of a proposed or existing tax.