On the Marginal Excess Burden of Taxation in an Overlapping Generations Model

Tran, Chung; Wende, Sebastian

doi:10.2139/ssrn.3050953

Cited by 10 publications

(7 citation statements)

References 33 publications

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“…Judd (1985). The following estimate is from Tran and Wende (2017). This study appears to have used uncompensated labor supply elasticities but is not entirely clear on this point.…”

Section: Estimates Of the Metbmentioning

confidence: 99%

Efficiency without Apology: Consideration of the Marginal Excess Tax Burden and Distributional Impacts in Benefit–Cost Analysis

Boardman

Greenberg²,

Vining

et al. 2020

J. Benefit Cost Anal.

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Some issues in the application of benefit–cost analysis (BCA) remain contentious. Although a strong conceptual case can be made for taking account of the marginal excess tax burden (METB) in conducting BCAs, it is usually excluded. Although a strong conceptual case can be made that BCA should not include distributional values, some analysts continue to advocate doing so. We discuss the cases for inclusion of the METB and the exclusion of distributional weights from what we refer to as “core” BCA, which we argue should be preserved as a protocol for assessing allocative efficiency. These issues are topical because a recent article in this journal recommends ignoring the METB on the grounds that desirable distributional effects offset its cost. We challenge the logic of this article and explain why it may encourage inefficient policies.

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“…Judd (1985). The following estimate is from Tran and Wende (2017). This study appears to have used uncompensated labor supply elasticities but is not entirely clear on this point.…”

Section: Estimates Of the Metbmentioning

confidence: 99%

Efficiency without Apology: Consideration of the Marginal Excess Tax Burden and Distributional Impacts in Benefit–Cost Analysis

Boardman

Greenberg²,

Vining

et al. 2020

J. Benefit Cost Anal.

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“…A sizeable number of computable general equilibrium (GE) models of the proposed tax cuts have been produced. Rimmer et al (), Cao et al (), Kouparitsas et al (), Murphy (, ), Dixon and Nassios () and Tran and Wende () model the incidence of Australia’s corporate tax based on the assumption that price of corporate risk capital in Australia is determined by grossing up the assumed perfectly elastic supply of foreign risk capital by 1 minus the Australian corporate tax rate, currently yielding a huge margin of about 43 per cent on the world supply price.…”

Section: Introductionmentioning

confidence: 99%

Investment, the Corporate Tax Rate, and the Pricing of Franking Credits

Swan¹

2019

Economic Record

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I apply a new single‐pass capital asset pricing model methodology for assessing systematic risk to all ASX stocks which indicates that securities which pay franking credits in Australia appear to face far less systematic risk than do stocks that never pay franking credits. But in this context, this apparent reduction in systematic risk can be interpreted as being due to franking credits that are close to being fully priced. An efficient equilibrium is reached in which the marginal investor in Australia pays little or no Australian corporate tax because, once she exhausts compulsory savings, she borrows offshore and converts debt to equity.

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“…For the purposes of our analysis, we considered it appropriate to choose a country comparable to Slovakia the achieved results are difficult to compare across other countries, due to differences in decomposition and differences in country tax settings. Tran and Wende (2017)…”

Section: Discussionmentioning

confidence: 99%

The Tax Burden CGE Analysis for Slovakia and Slovenia

Mitkova

Jánošová

2019

Naše Gospodarstvo/Our Economy

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In the paper, the static computable general equilibrium model for Slovakia and Slovenia is used for a tax burden analysis. There was considered simultaneous 1% increase in taxes on primary factors, on firms’ and government domestic and imported purchases, on import taxes, on output (or income) tax, on private domestic and imported consumption taxes and export subsidies. The direct tax burden as well as the allocative efficiency effects of a tax, the welfare effects and welfare decomposition of such change for both countries is analysed. The most sensitive sectors on tax rate changes is heavy manufacturing and processed food and the most distorting effect has the tax increase on private consumption tax. The government’s tax increase should generate return at least 105.75% of its costs in Slovakia and 101.92% in Slovenia, otherwise the welfare will decline.

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On the Marginal Excess Burden of Taxation in an Overlapping Generations Model

Cited by 10 publications

References 33 publications

Efficiency without Apology: Consideration of the Marginal Excess Tax Burden and Distributional Impacts in Benefit–Cost Analysis

Efficiency without Apology: Consideration of the Marginal Excess Tax Burden and Distributional Impacts in Benefit–Cost Analysis

Investment, the Corporate Tax Rate, and the Pricing of Franking Credits

The Tax Burden CGE Analysis for Slovakia and Slovenia

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