Part4FrameworkforTaxAnalysisCh14TaxationandIncomeDistributionCh15TaxationandEfficiencyCh16EfficientandEquitableTaxationCHAPTER14

TAXATIONANDINCOMEDISTRIBUTIONSections:TaxIncidence:GeneralRemarksPartialEquilibriumModelsGeneralEquilibriumModelsConclusionsVocabularyStatutoryIncidenceEconomicIncidenceTaxShiftingPartialEquilibriumModels0TaxIncidence:GeneralRemarksOnlypeoplecanbeartaxesFunctionaldistributionofincomeSizedistributionofincomeBothsourcesandusesofincomeshouldbeconsideredIncidencedependsonhowpricesaredeterminedIncidencedependsonthedispositionoftaxrevenuesBalanced-budgettaxincidenceDifferentialtaxincidenceLump-sumtaxAbsolutetaxincidenceTaxProgressivenessCanBeMeasuredinSeveralWaysAveragetaxrateversusmarginaltaxrateProportionaltaxsystemProgressivetaxsystemRegressivetaxsystem中華人民共和國(guó)個(gè)人所得稅法TaxLiabilitiesunderahypotheticaltaxsystemIncomeTaxLiabilityAverageTaxRateMarginalTaxRate$2,000-$200-0.100.2

3,000000.25,0004000.080.210,0001,4000.140.230,0005,4000.180.2MeasuringHowProgressiveaTaxSystemisMeasuringHowProgressiveaTaxSystemis–ANumericalExampleBeforeTaxAfterTaxConsumersPaySuppliersReceive$1.40$1.00$1.20$1.200D0S0D1S1PartialEquilibriumModelsQuantity$0DXSSXDX’Perfectly

Inelastic

SupplyQuantity$0DXSSXDX’Perfectly

Elastic

SupplyQuantity$AdValoremTaxesPoundsoffood

peryearPriceperPoundoffoodDfSfQ0QmQrP0PmPrDf’TaxesonFactorsThePayrollTaxCapitalTaxationinaGlobalEconomy農(nóng)民工喊“加工資”，企業(yè)承諾繳“五金”？談不攏！ThePayrollTaxHoursperyearWagerateperhourDLSLL0=L1wg=w0PrDL’wnCommodityTaxationwithoutCompetitionMonopolyOligopolyMonopolyXperyear$DXMRXATCXMXXX0P0ATC0abcdEconomic

ProfitsDX’MRX’PnigfhX1Economic

Profitsafterunit

taxProfitsTaxesEconomicprofitPerfectcompetitionMonopolyMeasuringeconomicprofitTaxIncidenceandCapitalizationPR=$R0+$R1/(1+r)+$R2/(1+r)2+…+$RT/(1+r)TPR’=$(R0–u0)+$(R1–u1)/(1+r)+$(R2–u2)/(1+r)2+…+$(RT–uT)/(1+r)Tu0+u1/(1+r)+u2/(1+r)2+…+uT/(1+r)TCapitalizationGeneralEquilibriumModelsPartialequilibriumGeneralequilibriumTaxEquivalenceRelationstKF=ataxoncapitalusedintheproductionoffoodtKM=ataxoncapitalusedintheproductionofmanufacturestLF=ataxonlaborusedintheproductionoffoodtLM=ataxonlaborusedintheproductionofmanufacturestF=ataxontheconsumptionoffoodtM=ataxonconsumptionofmanufacturestK=ataxoncapitalinbothsectorstL=ataxonlaborinbothsectorst=ageneralincometaxTaxEquivalenceRelationsPartialfactortaxestKFandtLFareequivalenttotFandandandtKMandtLMareequivalenttotMareareareequivalentequivalentequivalenttotototKandtLareequivalenttotSource:McLure[1971].TheHarbergerModelAssumptionsTechnologyElasticityofsubstitutionCapitalintensiveLaborintensiveBehavioroffactorsuppliersMarketstructureTotalfactorsuppliesConsumerpreferencesTaxincidenceframeworkAnalysisofVariousTaxesCommoditytax(tF)Incometax(t)Generaltaxonlabor(tL)Partialfactortax(tKM)OutputeffectFactorsubstitutioneffectSomeQualificationsDifferencesinindividuals’tastesImmobilefactorsVariablefactorsuppliesAnAppliedIncidenceStudyIncomeCategoryAverageFederalTaxRateShareofFederalTaxesLowestQuintile5.6%1.1%SecondQuintile12.15.2ThirdQuintile15.710.3FourthQuintile19.819.0HighestQuintile26.564.2AllQuintiles21.6100.0Top1%31.221.3Source:CongressionalBudgetOffice[2004].Thesefiguresarebas