Download or read book Expected Future Tax Policy and Tax exempt Bond Yields written by James M. Poterba and published by . This book was released on 1984 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Relationship Between Government Financial Condition and Expected Tax Rates Reflected in Municipal Bond Yields written by Sangkyun Park and published by . This book was released on 1995 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Tax Reform and the Market for Tax exempt Debt written by James M. Poterba and published by . This book was released on 1989 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides clear evidence that the yield spread between long-term taxable and tax-exempt bonds responds to changes in expected individual tax rates, a finding that refutes theories of municipal bond pricing that focus exclusively on commercial banks or other financial intermediaries. The results support the conclusion that in the two decades prior to 1986, the municipal bond market was segmented, with different investor clienteles at short and long maturities. The Tax Reform Act of 1986 is likely to affect this market, however, since it has restricted tax benefits from tax-exempt bond investment by commercial banks. Individual investors are increasingly important suppliers of capital to states and localities, and their tax rates are likely to be the primary determinant of the yield spread between taxable and tax-exempt interest rates in the future.
Download or read book Was the Tax Exempt Bond Market Inefficient Or Were Future Expected Tax Rates Negative written by Levis A. Kochin and published by . This book was released on 1986 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Taxation of Municipal Bonds written by Michael Mussa and published by Studies in Tax Policy. This book was released on 1979 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Taxing Municipal Bond Income written by Lyle Craig Fitch and published by . This book was released on 1950 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Technical Information Release written by United States. Internal Revenue Service and published by . This book was released on 1969 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Studies in State and Local Public Finance written by Harvey S. Rosen and published by University of Chicago Press. This book was released on 2007-12-01 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: In fiscal year 1981-82, state and local government spending actually exceeded federal nondefense spending. However, past research in public finance has focused on federal spending and policies and paid little attention to the economic problems of state and local governments. Studies in State and Local Public Finance goes far in correcting this omission. Developed from a National Bureau of Economic Research conference on state and local financing, the volume includes papers summarizing and extending recent research as well as commentaries. Covering a wide range of topics, the papers share an empirical orientation and a concern with policy issues. The first two papers look at the role of tax-exempt bonds in local public finance. Their findings suggest that tax policies significantly affect municipal borrowing practices and that financial advantage can be achieved under certain of these practices. Other papers address specific issues related to state and local tax policy: the impact of local taxes on location decisions; efficient road-use charges for trucks; and the relation of income and general sales tax systems over time. Examining issues related to United States federalism, the last paper focuses on the impact of federal grant aid to states. The research and findings these papers report make an important contribution to the study of local public finance and should be of particular interest to policymakers and those involved in private and public financing at the local, state, or federal level.
Download or read book Stock Market Yields and the Pricing of Municipal Bonds written by N. Gregory Mankiw and published by . This book was released on 1996 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes an alternative to the traditional model for explaining the spread between taxable and tax-exempt bond yields. This alternative model is a special case of a general class of clientele models of portfolio choice and asset market equilibrium. In particular, we consider a setting with two types of investors, a taxable investor and a tax-exempt investor, who hold specialized bond portfolios. The tax-exempt investor holds only taxable bonds, and the taxable investor holds only tax-exempt bonds. Both investors hold equity, and the taxable and tax-exempt bond markets are linked through the equilibrium conditions governing equity holding and bond holding for each type of investor. In contrast to the traditional model, this alternative model has the potential to explain the small observed spread between taxable and tax-exempt yields. In addition, this model predicts that the yield spread between taxable and tax-exempt bonds should be an increasing function of the dividend yield on corporate stocks. Although the substantial changes in the tax code during the last four decades complicate the testing of this model, we find some support for the predicted relationship between the equity dividend yield and the yield spread between taxable and tax-exempt bonds.
Download or read book Expected Taxes and Household Consumption Behavior written by Lorenz Kueng and published by . This book was released on 2012 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation I ask two basic questions: First, how predictable are personal income tax changes in the U.S. and second, does household consumption respond to news about future tax changes, or does it mostly respond at the time when the tax rates actually change? These are interesting questions because they have broad implications for macroeconomics and public economics. The rational-expectations life-cycle theory of consumption is the workhorse in modern macroeconomics. While there are various specifications of this theory, two predictions are common across them. First, consumption should not respond to predictable income changes and second, consumption should respond to news about future after-tax lifetime income. There is a large literature that tests the first implication of the rational-expectations life-cycle theory and generally rejects the model by finding significant consumption responses to predictable income changes -- that is, it finds that consumption is in fact excessively sensitive to predictable income changes. Very few studies focus on the theory's second main prediction, that household consumption responds to news about after-tax income changes, even if current after-tax income has not changed yet. To the best of my knowledge this dissertation is indeed the first study to use micro-level data to estimate the consumption response to news. I use fiscal policy to study these two questions because it offers two main advantages over other empirical frameworks commonly used by macroeconomists to test the consumption theory and to analyze the effect of news on macroeconomic aggregates. First, exploiting the fact that there is a lag between the decision to change taxes and the implementation of the tax changes allows me to separate the behavioral response to news from the response to the actual policy changes. Therefore, the response to tax news is not confounded by the response to the actual tax change. Second, actual tax changes are directly observable without measurement issues, which is different from other news shocks that have been recently studied, in particular news about future total factor productivity. Therefore, my measure of news about future taxes can be directly compared with the actual evolution of the tax rates. Regarding public economics, this dissertation addresses another question that is of interest to public policy makers. During the current Great Recession, in which conventional monetary policy is not effective due to the zero lower bound on nominal interest rates, policy makers have shifted attention to fiscal interventions. In order to assess the effectiveness of fiscal policy we have to know the total effect of a tax reform on the economy, i.e. the tax multiplier. Unfortunately, almost all studies that provide estimates of tax multipliers focus on the response of the economy to actual tax changes. These estimates might miss a fraction of the total effect of a tax reform if tax changes are predictable and if the behavior of economic agents is forward-looking. Ignoring anticipation effects can therefore bias the tax multiplier downward. The identification of news about future tax rates is key for answering these questions. In this dissertation I exploit the fact that there exist two classes of fixed-income securities in the U.S. that are very similar except for the tax treatment of their income streams. Interest on municipal bonds is tax-exempt, while interest on Treasury bonds is subject to federal income taxes; thus, relative price changes between municipal and Treasury bonds reflect changes in expected future tax rates, holding fixed other risk factors. I go beyond identification of the timing of news to directly measure the entire path of expected tax rates. The fact that different bonds have different maturities quantifies the degree of tax foresight, since yield spreads of bonds with different maturities reflect information about future taxes over different horizons. Hence, the tax news shocks derived from the bond prices measure not only when households receive information, but also what information they receive. Identifying the entire path of expected tax rates in turn is important for testing the basic rational-expectations life-cycle model of consumption, as the theory predicts that consumption responds one-for-one to changes in expected after-tax lifetime income. The term structure of municipal yield spreads identifies the expected persistence of a tax shock, which is a crucial factor that determines the optimal consumption response according to the theory. For instance, if a tax change is expected to be only transitory, then the theory predicts that consumption does not respond much. On the other hand, if a tax reform is expected to have a large persistent component, then consumption should respond much stronger. Combining these market-based tax expectations with consumption data from the Consumer Expenditure Survey I find that consumption of high-income households increases by close to 1% in response to news of a 1% increase in expected after-tax lifetime income, consistent with the basic rational-expectations life-cycle theory. On the other hand, households who have lower income, less education, or are more credit constrained respond less to news. However, the same households also respond one-for-one with large news shocks, consistent with rational inattention.
Download or read book Estimates of Federal Tax Expenditures written by United States. Department of the Treasury and published by . This book was released on 1975 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Tax Reform Act of 1969 H R 13270 written by United States. Congress. Senate. Committee on Finance and published by . This book was released on 1969 with total page 424 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Tax Withholding and Estimated Tax written by and published by . This book was released on 1993 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Handbook of Fiscal Policy written by Jack Rabin and published by CRC Press. This book was released on 2001-12-19 with total page 824 pages. Available in PDF, EPUB and Kindle. Book excerpt: Providing forty articles written by experts, this book explores the development of government spending and revenue policymaking, the legacy of John Maynard Keynes, taxes and tax policies, government budgeting and accounting, and government debt management. Topics include the implications of the federal balanced budget amendment, factors that affect implementation of fiscal policies, the relationship between tax assessment and economic prosperity, and debt management strategies by government institutions. It covers the role of government in formulating economic policies for growth and full employment and reviews issues associated with the implementation of fiscal policies.
Download or read book List of Original Issue Discount Instruments written by United States. Internal Revenue Service and published by . This book was released on 1985 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Tax Policy Leverage and Macroeconomic Stability written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2016-12-10 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: Risks to macroeconomic stability posed by excessive private leverage are significantly amplified by tax distortions. ‘Debt bias’ (tax provisions favoring finance by debt rather than equity) has increased leverage in both the household and corporate sectors, and is now widely recognized as a significant macroeconomic concern. This paper presents new evidence of the extent of debt bias, including estimates for banks and non-bank financial institutions both before and after the global financial crisis. It presents policy options to alleviate debt bias, and assesses their effectiveness. The paper finds that thin capitalization rules restricting interest deductibility have only partially been able to address debt bias, but that an allowance for corporate equity has generally proved effective. The paper concludes that debt bias should feature prominently in countries’ tax reform plans in the coming years.
Download or read book Transactions to Resolve Failed Depository Institutions written by United States. Congress. House. Committee on Banking, Finance, and Urban Affairs and published by . This book was released on 1990 with total page 1108 pages. Available in PDF, EPUB and Kindle. Book excerpt:
