Download or read book Taxation of Human Capital and Wage Inequality written by Fatih Guvenen and published by DIANE Publishing. This book was released on 2010-10 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: Wage inequality has been significantly higher in the U.S. than in continental European countries since the 1970s. This report studies the role of labor income tax policies (LITP) for understanding these facts. Countries with more progressive LITP have significantly lower before-tax wage inequality at different points in time. Progressivity is also negatively correlated with the rise in wage inequality during this period. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. Illustrations. This is a print-on-demand publication; it is not an original.
Download or read book Risk Taking and Optimal Taxation with Nontradable Human Capital written by Zuliu Hu and published by International Monetary Fund. This book was released on 1992-12-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: What are the effects of taxation on individual/entrepreneurs’ risk-taking behavior? This paper re-examines this old question in a continuous time life-cycle model. We demonstrate that the stream of uncertain income from human capital has systematic effects on demand for the risky physical capital asset. If labor supply is inelastic and real wages are known with certainty, then a labor income tax will reduce holdings of the risky physical asset. However, if there are random fluctuations in labor income, then the effect depends on the nature of interaction between wage risk and investment income risk. A labor income tax may actually raise demand for the risky capital asset if human capital risk and physical capital risk are positively correlated. The idiosyncratic risk and nontradability of human capital also have implications for optimal taxation. When the insurance and disincentive effects are jointly taken into account, a Pareto efficient tax structure implies a strictly positive tax rate.
Download or read book Human Capital Under an Ideal Income Tax written by Louis Kaplow and published by . This book was released on 1994 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Human capital and income tax written by National Bureau of Economic Research and published by . This book was released on 1993 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Investment in Human Capital Under a Negative Income Tax written by S. A. Rea (Jr.) and published by . This book was released on 1977 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Human Capital Flight written by International Monetary Fund and published by International Monetary Fund. This book was released on 1994-12-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyses the impact of government tax and subsidy policy on immigration of human capital and the effect of such immigration on growth and incomes. In the context of a two-country endogenous growth model with heterogeneous agents and human capital accumulation, we argue that human capital flight or “brain drain” arising out of wage differentials, say because of differences in income tax rates or technology, can bring about a reduction in the steady state growth rate of the country of emigration. Additionally, permanent difference in the growth rates as well as incomes between the two countries can occur making convergence unlikely. While in a closed economy, tax-financed increases in subsidy to education can have a positive effect on growth, such a policy can have a negative effect on growth when human capital flight is taking place. Since subsidizing higher education is more likely to induce substantial brain drain, it is likely to be inferior to subsidy to lower levels of education if growth is to be increased.
Download or read book Human Capital and the Income Tax written by Louis Kaplow and published by . This book was released on 1993 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article examines how to treat human capital -- perhaps the vast majority of the capital stock -- under an ideal, Haig-Simons income tax. Innate ability, investments in human capital, and uncertainty in future earnings are considered. It is demonstrated that conventional income tax treatment and proposed modifications are closer to implementing a consumption tax than an income tax. Approximating ideal income tax treatment may be feasible, but assessing its desirability would require further inquiry.
Download or read book Taxation Human Capital and Uncertainty written by Jonathan Eaton and published by . This book was released on 1979 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Taxation and Endogenous Growth in Open Economies written by Mr.Gian Milesi-Ferretti and published by International Monetary Fund. This book was released on 1994-07-01 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effects of taxation of human capital, physical capital and foreign assets in a multi-sector model of endogenous growth. It is shown that in general the growth rate is reduced by taxes on capital and labor (human capital) income. When the government faces no borrowing constraints and is able to commit to a given set of present and future taxes, it is shown that the optimal tax plan involves high taxation of both capital and labor in the short run. This allows the government to accumulate sufficient assets to finance spending without any recourse to distortionary taxation in the long run. When restrictions to government borrowing and lending are imposed, the model implies that human and physical capital should be taxed similarly.
Download or read book Investment in Human Capital Under a Negative Income Tax written by Samuel A. Rea and published by . This book was released on 1977 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Tax Policy Investments in Human and Physical Capital and Productivity written by Marc Nerlove and published by . This book was released on 1990 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the implications of tax policy for the accumulation of human and physical capital and for the overall productivity level of the economy. A comprehensive income tax, applying to both labour income and capital income. discriminates against investments in human capital relative to investments in physical capital. Hence. it has an adverse impact on human capital accumulation. Taking into account a positive external effect of investments in human capital on overall productivity, the adverse effect of income taxation on human capital investments is significantly magnified.
Download or read book Taxation of Human Capital and Wage Inequality written by Fatih Guvenen and published by . This book was released on 2013-05-12 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: Wage inequality has been significantly higher in the U.S. than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened as the U.S. has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts, focusing on male workers. The authors construct a life cycle model in which individuals decide each period whether to go to school, work, or stay non-employed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Countries with more progressive labor income tax schedules are shown to have (1) significantly lower before-tax wage inequality at different points in time and (2) experienced a smaller rise in wage inequality since the early 1980s. In a comparison between the U.S. and Germany, the combination of skill-biased technical change and changing progressivity of tax schedules explains all the difference between the evolution of inequality in these two countries since the early 1980s. Figures and tables. This is a print on demand report.
Download or read book On the Divergence Between ideal and Conventional Income Tax Treatment of Human Capital written by Louis Kaplow and published by . This book was released on 1996 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Taxation of Human Capital and Wage Inequality written by Fatih Guvenen and published by . This book was released on 2009 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts. We begin by documenting two new empirical facts that link these inequality differences to tax policies. First, we show that countries with more progressive labor income tax schedules have significantly lower before-tax wage inequality at different points in time. Second, progressivity is also negatively correlated with the rise in wage inequality during this period. We then construct a life cycle model in which individuals decide each period whether to go to school, work, or be unemployed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. We find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 76% of the difference in inequality at the upper end (log 90-50 differential). When this economy experiences skill-biased technological change, progressivity also dampens the rise in wage dispersion over time. The model explains 41% of the difference in the total rise in inequality and 58% of the difference at the upper end.
Download or read book Second Best Income Taxation with Endogenous Human Capital and Borrowing Constraints written by Bas Jacobs and published by . This book was released on 2013 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Human Capital and the Personal Distribution of Income written by Gary Stanley Becker and published by . This book was released on 1967 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book On the Optimal Taxation of Capital Income written by Larry E. Jones and published by . This book was released on 1993 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the best known results in modern public finance is the Chamley-Judd result showing that the optimal tax rate on capital income is zero in the long-run. In this paper, we reexamine this result by analyzing a series of generalizations of the Chamley-Judd formulation. We show that in a model with human capital, if the tax code is sufficiently rich and there are no pure profits from accumulating human capital, then all distorting taxes are zero in the long-run under the optimal plan. In this sense, income from physical capital is not special. To gain a better understanding of these two conditions, we study examples in which they are not satisfied and show that the optimal tax rate on income from physical capital does not go to zero. In those cases where the limiting tax rate is non-zero, we calculate its value for alternative specifications of the marginal welfare cost of taxation. Our results indicate that even for conservative specifications, tax rates of 10% and higher are possible under the optimal code.
