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Friday, August 20, 2021

Tax Papers At Today’s Conference On Public Finance In The Era Of The COVID-19 Crisis


Listed here are some tax displays and papers of curiosity at at the moment’s concluding session of the 77th Annual Congress of the International Institute of Public Finance: Public Finance in the Era of the COVID-19 Crisis:

Ole Agersnap (Princeton; Google Scholar) &  Owen Zidar (Princeton; Google Scholar), The Tax Elasticity of Capital Gains and Revenue-Maximizing Rates:

This paper makes use of a direct-projections method to estimate the impact of capital features taxation on realizations on the US state degree, after which develops a framework for figuring out revenue-maximizing charges on the federal degree. We discover that the elasticity of revenues with respect to the tax charge over a ten-year interval is -0.5 to -0.3, indicating that capital features tax cuts don’t pay for themselves, and {that a} 5 proportion level charge improve would yield $18 to $30 billion in annual federal tax income. Our long-run estimates yield revenue-maximizing capital features tax charges of 38 to 47 %.

Zachary Liscow (Yale; Google Scholar) & Edward Fox (Michigan; Google Scholar), The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule:

The belief rule is central to earnings taxation, however usually decreases the effectivity, fairness, and ease of taxation. So it’s stunning that we would not have a superb rationalization for why the rule exists for liquid belongings. Students have lengthy speculated in regards to the function of the general public’s views right here, however little is thought empirically about them. We conduct the primary survey experiment to know the psychology of taxing features on unsold belongings. We’ve three important findings. First, respondents are far much less supportive of taxing features in unsold publicly-traded inventory than bought inventory. Second, informing folks of the arguments on “either side” of taxing unsold inventory significantly decreases help (by 19 proportion factors) for taxing unsold inventory. And, third, addressing respondents’ acknowledged causes for opposing taxing unsold features doesn’t change their thoughts, suggesting {that a} deep instinct, maybe pushed by psychological accounting, could also be driving respondents’ opposition.

R. Alison Felix (Federal Reserve Financial institution of Kansas Metropolis) & James R. Hines Jr. (Michigan; Google Scholar), Corporate taxes and union wages in the United States:

This paper evaluates the impact of U.S. state company earnings taxes on union wage premiums. American employees who belong to unions are paid greater than their non-union counterparts, and this distinction is larger in low-tax places, presumably reflecting that unions and employers share tax financial savings related to low tax charges. In 2000 the distinction between common union and non-union hourly wages was $1.88 larger in states with company tax charges beneath 4 % than in states with tax charges of 9 % and above. Controlling for observable employee traits, a one % decrease state tax charge is related to a 0.36 % increased union wage premium, suggesting that employees in a completely unionized agency seize roughly 54 % of the advantages of low tax charges.

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