西方财政学 Chap14

1 Chapter14 EfficientandEquitableTaxation PublicEconomics 2 OptimalCommodityTaxation Assumethatthegoalistofinanceexpenditureswithaminimumofexcessburden Assumelumpsumtaxesareinfeasible 3commodities GoodX Y andleisurePricesPX PY andw 3 OptimalCommodityTaxation Timeendowmentisfixedat Thefullbudgetconstraintcanbewrittenas 4 OptimalCommodityTaxation Case1 Allgoodscanbetaxed Ifallcommoditiescanbetaxed imposingequalad valoremtaxratesyields 5 OptimalCommodityTaxation Case1 Allgoodscanbetaxed Inthiscase theinabilitytoimposealumpsumtaxisirrelevant Thegovernmentcaneffectivelytakeawayalumpsumamountthroughequaltaxesonallcommodities includingleisure Noexcessburden 6 OptimalCommodityTaxation Case2 Notallgoodscanbetaxed Maybeimpossibletotaxnon marketwork AssumeonlytaxescanbeappliedtogoodsXandY Ingeneral someexcessburdenisinevitable KeyquestionishowtoselectratesonXandYtominimizeexcessburdensubjecttotherevenueconstraint 7 OptimalCommodityTaxation RamseyRule ConsidertheideaofmarginalexcessburdenTheadditionalinefficiencyfromincrementallyraisingataxbyasmallamount Figure14 1showstheinitialexcessburdenasatriangle abc andthemarginalexcessburdenasatrapezoid fbae Figure14 1 9 OptimalCommodityTaxation RamseyRule ThemarginalexcessburdenoftaxinggoodXisapproximately X Themarginaltaxrevenueraisedisapproximately X1 Thereforethemarginalexcessburdenperdollaroftaxrevenueis 10 OptimalCommodityTaxation RamseyRule SimilarreasoningisusedforgoodY Optimizationthereforeleadsto Ramseyrulesaysthattominimizetotalexcessburden taxratesshouldbesetsothepercentagereductioninthequantityofeachgooddemandedisthesame 11 OptimalCommodityTaxation RamseyRuleReinterpreted RecalltheformulaforexcessburdenforgoodX Planner soptimizationproblemistominimizetotalexcessburdenbychoosetaxesongoodsXandY subjecttoarevenueconstraint 12 OptimalCommodityTaxation RamseyRuleReinterpreted SettinguptheLaGrangian 13 OptimalCommodityTaxation RamseyRuleReinterpreted Solvingleadstoarelationshipbetweentaxratesandelasticities Orrearrangingwehavetheinverseelasticityrule 14 OptimalCommodityTaxation RamseyRuleReinterpreted Implicationoftheinverseelasticityrule Aslongasgoodsareunrelatedinconsumption neithercomplementsnorsubstitutes taxratesshouldbeinverselyproportionaltoelasticities WhengoodYisrelativelyinelastic taxitmore 15 OptimalCommodityTaxation EquityConsiderations Isit fair totaxinelasticgoodslikefoodandmedicine Clearlyitisnot Anothercriteriaforataxsystemisverticalequity itshoulddistributeburdensfairlyacrosspeoplewithdifferentabilitiestopay 16 OptimalCommodityTaxation EquityConsiderations Ramseyrulehasbeenmodifiedtoaccountforthedistributionalissues Degreeofdeparturefromoriginalruledependson HowmuchsocietycaresaboutequityExtenttowhichconsumptionpatternsofrichandpoordiffer 17 OptimalUserFees Ifgovernmentproducesagoodorservice mustdirectlychooseauserfee Auserfeeispricepaidbyusersofthegoodorservicetothegovernment Forexample naturalmonopoly Whatisthe best fee 18 OptimalUserFees ConsiderthenaturalmonopolyinFigure14 2 ContinuallydecreasingaveragecostsMarginalcostlieseverywherebelowaveragecost Figure14 2 20 OptimalUserFees AprivatefirmwouldsetMR MC andchooseZm Thisoutputlevelleadstoinefficiency SeeFigure14 3 Figure14 3 22 OptimalUserFees EfficiencywouldrequireP MC oroutputatZ Keyproblemisthatatthisquantity priceislessthanaveragecost sotheoperationsufferslosses 23 OptimalUserFees Policysolutions Averagecostpricing Zeroprofits butZA Z MarginalcostpricingwithLumpSumTaxes SetP MC provideZ ataloss andfinanceitwithalumpsumtax AssumessuchataxisavailableEquityconsiderations whousesthegood 24 OptimalUserFees Secondprincipleiscalledthebenefits receivedprinciple consumersofapubliclyprovidedservicepayforit ARamseySolutionIfgovernmentisrunningseveralenterprises choosemarkupovermarginalcostssubjecttoabreakevenconstraint 25 OptimalIncomeTaxation Edgeworth smodelimpliesaradicallyprogressivetaxstructure marginaltaxratesonhighincomeindividualsare100 Keyproblemisworkincentivesarenotaccountedfor 26 OptimalIncomeTaxation Modernstudies Accountforworkdisincentives Taxscheduleischaracterizedby Figure14 4showsthisequation Figure14 4 28 OptimalIncomeTaxation Modernstudies Thisscheduleisreferredtoasalinearincometaxschedule oraflatincometax Highervaluesoftmeanmoreprogressivetaxbutlargerexcessburdens Optimalincometaxfindsrightcombinationof andt 29 OptimalIncomeTaxation Modernstudies Typicalfindingsofoptimalincometaxproblems Allowingformodestamountofsubstitutionbetweenleisureandincomeleadstoincometaxratesconsiderablylessthan100 30 OtherCriteriaforTaxDesign Horizontalequity PeopleinequalpositionsshouldbetreatedequallyMeasuresrepresentoutcomesofpeople sdecisionssoitisdifficulttofigureoutwhethertheywereinitiallyinequalposition CostsofrunningataxsystemTaxevasionTaxavoidance 31 TaxEvasion Taxevasionisfailingtopaylegallyduetaxes Taxcheatingdifficulttomeasure andprobablymanifestsitselfinanumberofways KeepingtwosetsofbooksMoonlightingforcashBarterDealincash 32 TaxEvasion SupposepersoncaresonlyaboutmaximizingexpectedincomeGoalistochooseR theamountthatishiddenfromauthoritiesMarginalbenefitofhidingincomeisthetaxrateAssumeauthoritiesrandomlyauditwithprobability andincreasingpenaltyforgreateramountshidden 33 TaxEvasion Figure14 5showsthatoptimalunderreportingoccurswhentheexpectedmarginalbenefitfromdoingsoexceedsthemarginalcost Implications Cheatingincreaseswithtaxratesa