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Abstract Existing studies have relied on the notion of developmentalism to explain key aspects of the tax policies in Japan and Korea. However, limited efforts have been made to explore [...]

Introduction Although the use of a tobacco tax to reduce smoking is still relatively new in many countries, there is a long history throughout the world of governments implementing such [...], Objective To investigate the potential for tobacco tax to contribute to the 2030 agenda for sustainable development by reducing tobacco use, saving lives and generating tax revenues. Methods A model of the global cigarette market in 2014--developed using data for 181 countries--was used to quantify the impact of raising cigarette excise in each country by one international dollar (1$) per 20-cigarette pack. All currencies were converted into 1$ using purchasing power parity exchange rates. The results were summarized by income group and region. Findings According to our model, the tax increase Would lead the mean retail price of cigarettes to increase by 42%--from 3.20 to 4.55 1$ per 20-cigarette pack. The prevalence of daily smoking would fall by 9%--from 14.1% to 12.9% of adults--resulting in 66 million fewer smokers and 15 million fewer smoking-attributable deaths among the adults who were alive in 2014. Cigarette excise revenue would Increase by 47%--from 402 billion to 593 billion 1$--giving an extra 190 billion 1$s in revenue. This, in turn, could help create the fiscal space required to finance development priorities. For example, if the extra revenue was allocated to health budgets, public expenditure on health could increase by 4% globally. Conclusion Tobacco taxation can prevent millions of smoking-attributable deaths throughout the world and contribute to achieving the sustainable development goals. There is also potential for tobacco taxation to create the fiscal space needed to finance development, particularly in low- and middle-income countries. Objectif Examiner la maniere dont les taxes sur le tabac pourraient contribuer au Programme de developpement durable pour 2030 en reduisant la consommation de tabac, en sauvant des vies et en generant des recettes fiscales. Methodes Un modele du marche mondial des cigarettes en 2014--elabore a partir des donnees de 181 pays--a ete utilise pour quantifier l'impact de la hausse de l'accise sur les cigarettes d'un dollar international ($1) par paquet de 20 cigarettes dans chaque pays. Toutes les devises ont ete converges en $1 a l'aide de taux de change assurant la parite des pouvoirs d'achat. Les resultats ont ete synthetises par tranche de revenu et par region. Resultats D'apres notre modele, cette hausse des taxesferait augmenter le prix de detail moyen des cigarettes de 42%--de 3,20 a 4,55 $1 par paquet de 20 cigarettes. La prevalence du tabagisme quotidien baisserait de 9%--passant de 14,1% a 12,9% des adultes--et Ton observerait 66 millions de fumeurs en moins et 15 millions de morts attribuables au tabac en moins chez les adultes quietaientvivantsen 2014. Les produits des droits d'accise sur les cigarettes augmenteraient de 47%--passant de 402 milliardsa 593 milliards de $1--soit 190 milliards de $1 de recettes supplementaires. Cela pourrait offrir la marge de manoeuvre budgetaire necessaire au financement des priorites de developpement. Si, par exemple, ces recettes supplementaires etaient affectees aux budgets de la sante, les depenses publiques dans ce domaine pourraient augmenter de 4% au niveau mondial. Conclusion Les taxes sur le tabac permettent d'eviter des millions de morts attribuables au tabac dans le monde et contribuent a la realisation des objectifs de developpement durable. Elles pourraient egalement offrir la marge de manoeuvre budgetaire necessaire au financement du developpement, en particular dans les pays a revenu faible et intermediaire. Objetivo Investigar el potencial del Impuesto sobre el tabaco de contribuir a la Agenda 2030 para el Desarrollo Sostenible mediante la reduccion del consumo de tabaco, salvando vidas y generando ingresos fiscales. Metodos Se utilizo un modelo del mercado global de cigarrillos en 2014 (desarrollado a partir de datos recopilados en 181 paises) para cuantificar el Impacto del aumento del consumo de cigarrillos en cada pais por un dolar internacional (1$) por cada paquete de 20 cigarrillos. Se convirtieron todas las divisas en 1$ mediante tipos de cambio de paridad del poder adquisitivo. Los resultados se resumieron por grupos de ingresos y por regiones. Resultados Segun nuestro modelo, el aumento de los impuestos daria lugar a una subida del precio minorista principal de los cigarrillos de un 42% (de 3,201$ a 4,551$ por cada paquete de 20 cigarrillos). La frecuencia del consumo de tabaco diario caeria un 9% (de un 14,1% a un 12,9% de los adultos), lo que se traduce en 66 millones menos de fumadores y 15 millones menos de fallecimientos a causa del tabaco en adultos vivos en 2014. Los ingresos obtenidos del consumo de cigarrillos aumentarian un 47% (de 402 000 millones de 1$ a 593000 millones de 1$), lo que ofrece unos ingresos adicionales de 190000 millones de 1$. Por su parte, esto ayudaria a crear el espacio fiscal necesario para financiar las prioridades de desarrollo. Por ejemplo, si los ingresos adicionales se asignaran a presupuestos sanitarios, el gasto publico en salud aumentaria un 4% a nivel mundial. Conclusion Los impuestos sobre el tabaco pueden evitar millones de fallecimientos atribuibles al tabaco en todo el mundo y pueden contribuira lograr los objetivos de desarrollo sostenible. Tambien existe la posibilidad de que los impuestos sobre el tabaco generen el espacio fiscal necesario para financiar el desarrollo, principalmente en paises con ingresos bajos y medios.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpubeco.2007.01.002 Byline: Martin Bossmann (a), Christian Kleiber (b), Klaus Walde (c) Keywords: Bequest; Taxation; Wealth inequality; OLG model; Analytical solution Abstract: This paper examines the role of bequests and of taxation on bequests for the distribution of wealth. We investigate a model with overlapping generations and heterogenous households where parents derive utility directly from their bequests. We obtain all results analytically. Using the coefficient of variation as the measure of inequality, bequests per se diminish the inequality of wealth since they raise private savings and hence average wealth holdings more than the variance of wealth. From a policy perspective, taxing bequests and redistributing government revenue lump-sum among the young generation further decreases wealth inequality. Author Affiliation: (a) University of Dresden, Germany (b) Department of Economics, University of Basel, 4003 Basel, Switzerland (c) University of Wurzburg, CESifo and UCL Louvain-La-Neuve, Germany Article History: Received 15 June 2005; Revised 12 December 2006; Accepted 8 January 2007 Article Note: (footnote) [star] We are grateful to Gregory Ponthiere and seminar participants at the 2006 CESifo Public Finance Workshop for discussions and comments and to two Referees for very constructive comments on an earlier version.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jedc.2005.08.009 Byline: Pierpaolo Benigno (a), Michael Woodford (b) Abstract: We reconsider the optimal taxation of income from labor and capital in the stochastic growth model analyzed by Chari et al. [1994. Optimal fiscal policy in a business cycle model. Journal of Political Economy 102, 617-652; 1995. Policy analysis in business cycle models. In: Cooley, T.F. (Ed.), Frontiers of Business Cycle Research. Princeton University Press, Princeton], but using a linear-quadratic (LQ) approximation to derive a log-linear approximation to the optimal policy rules. The example illustrates how inaccurate 'naive' LQ approximation - in which the quadratic objective is obtained from a simple Taylor expansion of the utility function of the representative household - can be, but also shows how a correct LQ approximation can be obtained, which will provide a correct local approximation to the optimal policy rules in the case of small enough shocks. We also consider the numerical accuracy of the LQ approximation in the case of shocks of the size assumed in the calibration of Chari et al. We find that the correct LQ approximation yields results that are quite accurate, and similar in most respects to the results obtained by Chari et al. using a more computationally intensive numerical method. Author Affiliation: (a) New York University, USA (b) Department of Economics, Columbia University, 10098 International Affairs Building, 420 W. 118th Street, New York, NY 10027, USA Article History: Received 3 October 2004; Accepted 9 August 2005

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-937X.2006.00394.x Byline: MATHIAS HUNGERBUHLER (a), ETIENNE LEHMANN (b), ALEXIS PARMENTIER (c), BRUNO VAN DER LINDEN (d) Abstract: This paper characterizes optimal non-linear income taxation in an economy with a continuum of unobservable productivity levels and endogenous involuntary unemployment due to frictions in the labour markets. Redistributive taxation distorts labour demand and wages. Compared to their efficient values, gross wages, unemployment, and participation are lower. Average tax rates are increasing. Marginal tax rates are positive, even at the top. Finally, numerical simulations suggest that redistribution is much more important in our setting than in a comparable Mirrlees-type setting. Author Affiliation: (a)University of Namur (b)ERMES, Universite Catholique de Louvain, and IZA (c)Universite Catholique de Louvain, EUREQua, and ERMES (d)Universite Catholique de Louvain, FNRS, IZA, and ERMES Article History: First version received December 2003; final version accepted November 2005 (Eds.)

A different form of tax system, based entirely on realization accounting, is to be formed to implement a uniform capital income tax or a wealth tax. Implementation of a system of uniform capital income taxation is more feasible.

An optimal tax policy where the two instruments: a non-linear(wage) income tax and a proportional tax on capital income are available are being discussed. It extends beyond the model of direct and indirect taxation to a dynamic setting of productive ability and inherited wealth.

Byline: Christoph Bohringer (1), Wolfgang Wiegard (2), Collin Starkweather (3), Anna Ruocco (4) Keywords: green tax reforms; computable general equilibrium models; optimal taxation; teaching of economics Abstract: The double or even triple dividend hypothesis of green tax reforms has beena major issue of dispute in both the scientific community and the politicalarena during the last decade. Theoretical analysis has provided a number ofimportant qualitative insights to the debate but lacks of actual policyrelevance due to very restrictive assumptions. Applied research that takes thestep from stylized analytical to complex numerical models usually comes as ablackbox to non-expert modelers. This paper aims at bridging the gap betweenstylized theoretical work and numerical analysis. We develop a flexible,interactive simulation model which is accessible underhttp://brw.zew.de. Users can specify their own green tax reforms andevaluate the induced economic and environmental effects. Based on illustrativesimulations, we demonstrate the usefulness of our do-it-yourself approach fora better understanding of the double (triple) dividend hypothesis. Author Affiliation: (1) Centre for European Economic Research (ZEW), Mannheim, Germany (2) Department of Economics, University of Regensburg, Regensburg, Germany (3) Department of Economics, University of Colorado, Boulder, U.S.A (4) Italy Article History: Registration Date: 06/10/2004

It is found that around the age of retirement, due to the fall in incomes, households appear to reduce their consumption expenditure level. It also explains, the difference in behaviour of single and family households during such a situation.

A study on household labor supply using the assumptions of collective approach is made. Two related extensions are presented. Also, how to measure the incidence of income tax on household labor supply is examined.

The relationship between, a representative democracy and marginal rate progressive income taxation, is revealed. It presents a set of political parties, with given preferences over tax schedules. The model gives out a game of electoral competition.

The optimal non-linear income taxation issue on the basis of equitability is studied. An allotment is equitable, if no agent resents a proportion of the bundle of any other agent. The properties of Pareto undominated allotments for an assortment of equitability requirements are also studied taking into considerations the various models.

A significant dissimilarity exists between the ideal price and the ideal level of environmental quality in a second-best world. For reasonable parameter values, an increase in tax distortions leads to a fall in the optimal Pigouvian tax rate, however, environmental quality improves in spite of the decrease in the Pigouvian tax increment.

The financial markets in China show many unusual features, that are consistent with a government choosing regulations to maximize a standard type of social welfare function. Under some particular situations, these regulations correspond to imposing explicit taxes on business and interest income, and according to the theory, China may face increasing incentives over a period of time, to shift to explicit taxes.

An analytical equilibrium model which considers benefits from reduced pollution, health and productivity is examined. These benefits affect labor supply and thus a benefit-side-tax-interaction effect is created.

This article provides an optimal taxation model which is applied to a two-class economy with two private commodities and labor. The author, focusing on merit goods and their effects on optimal tax policies, concludes governments will encourage the consumption of the merit goods and the subsidies imposed will result in the high-ability population to be overly subsidized and overconsume and the lower-ability population will be under subsidized and will underconsume the merit goods.

I develop a dynamic political economy theory of optimal taxation and budget distortions in a model with partisan politics. Under asymmetric information, politics affects the distribution of utilities in the economy. Political regime switching introduces fluctuations of this distribution. These fluctuations justify strategic budget distortions by governments currently holding office and willing to favour their redistributive concerns against future majority. Under quite general assumptions on preferences, these distortions take the form of budget deficits (resp. surpluses) with leftist (rightist) governments. Endogenizing the probabilities of getting elected may reverse this result.

One effective way of controlling the socio-economic effect of status-conferring consumption is to place higher taxes on the income of those whose earnings are large, instead of placing higher taxes on the status-conferring goods. Taxing income instead of the commodity is effective based on a signal theory approach to consumption. Such a form of control helps alleviate pressures on the labor supply as well as normalizing consumption and has the added benefit of improving public good through subsidies on social programs.

Marginal linear income taxes yield higher rates when income disparities are due to random factors rather than unobserved skills. When factors of precautionary behavior and life uncertainty are included, the optimum tax registers a rate higher than 25%, the figure arrived at by an earlier study on redistributive taxation. In addition, the first marginal rate of a pragmatic social planner and a linear revenue schedule is lower than the second marginal rate. This finding contradicts the classical model of income taxation which points to a lower second marginal rate.

This paper analyzes non-linear optimal taxation under asymmetric information in a general equilibrium model with endogenous firm formation. It first shows, under a weak separability assumption on technologies, that output and input taxes are not necessary if profits are optimally taxed. It then examines the progressivity (or lack of it) of the optimal profit tax and describes the corresponding effects on the structure of the production sector relative to the first-best solution. Finally, the paper investigates conditions under which the provision of public goods can be decentralized. Keywords: Non-linear optimal taxation; Occupational choice

Optimal tax and monetary policies in a stochastic monetary growth model are investigated. Our findings are of three general types. First, both capital income taxes and monetary growth are shown to influence the economy through effective risk-adjusted measures, expressed as a linear function of their respective means and variances. Second, two stochastic neutrality results relating to money and bonds, the two nominal assets in the economy, are identified. Third, optimal policy rules relating to taxes, bond finance and money creation are characterized. An essential component of optimal financial policy is a risk-adjusted balanced budget.

The impact of parking taxes and transit subsidies on the size of a central business district (CBD), CBD land values and the market shares of cars and transit was investigated. A general equilibrium model was utilized to test whether agglomeration economies increase continuously in relation to labor market size, whether locational equilibrium is maintained as reflected in the inability of firms and individuals to reduce costs or increase utility by moving, and whether traffic congestion arises from automobile use only. The conditions under which parking taxes are levied and used to subsidize transit and increase CBD land values and size were derived. Results showed that parking taxes can increase both CBD size and land values and that parking taxes, land values and transit use have nonmonotonic relationships.

The role of interjurisdictional competition for mobile factors of production in taming the Leviathan by forcing the government to improve the efficiency of the public sector was investigated. Specifically, benefit taxes such as environmental taxes, road pricing schemes and other fees paid for public-sector services were examined as an instrument for taming Leviathan governments. Results showed that tax competition tames bad governments and force them to redistribute resources from their own members to the public sector. In other words, interjurisdictional competition can be socially beneficial in a Leviathan government. Factor mobility tames the Leviathan that uses or abuses benefit taxes to generate rent income. However, the public sector may become more inefficient if the mobile factor is taxed.

The model of fiscal illusion in public finance was extended to include imperfect information about the tax price as well as the relationship between spending and public goods consumption. The model assumes that voters are uncertain about how much they must pay for additional services or about the services they receive in return for higher taxes. The overspending and flypaper effects predicted by the certainty model was also modified while showing how each type of voter imperfect information affects public spending. Empirical results from a study of municipal expenditures confirm the broader concept of fiscal illusion as tax price and public consumption imperfect information. It was also found that the degree of government budgetary complexity affects the output and flypaper effects of fiscal illusion.

The effects of taxes on strike activity and wage bargaining by labor unions were examined using a two period-screening model. The model assumes that the union demands wage increases and calls a strike if the demand is rejected while the firm reacts to the union's actions. Results showed that a more progressive income tax, lower income taxes and higher payroll taxes reduce wages and strike incidence. Thus, tax policy can be an effective deterrent of strikes.

The attainment of a successful tax policy remains possible even under the presence of uncertainty. The utilization of a political model showed that uncertainty can likewise generate stability to a tax policy. It was also revealed that stable linear tax functions can only be achieved under economies with high egalitarian income distributions and taxation levels.

An analysis of the effects of specific and ad valorem taxation reveals distinct results from factors, such as prices, profit, variety, and quality. The parity between the two types of taxes is shown to significantly affect interests of producers, consumers, and government. The prominence of specific taxation is shown to result in comparatively higher price levels, variety, and quality. Neither type of tax is shown to be better than the other since both are shown to be optimal in specific situations.

Ecological tax reforms do not necessarily lead to an improvement in environmental quality. Using first-best and second-best world models, an increase in taxes on polluting goods may result in negative environmental consequences. Revenue-neutral ecological tax reforms in a second-best framework may actually deteriorate the environment. It can be deduced that improving the environment necessitates both ecological tax reforms and the accompanying initiatives taken by the government to ensure revenue neutrality.

A model representing a trade-off between tax plan revision value and revision benefit was devised to analyze the possibility of achieving optimal taxation in the absence of government commitment. It shows that the tax rate and the steady state capital vary in the second best tax plan when no commitment occurs. The model also shows that there exists positive limit taxes on capital.

A theoretical evaluation of the existing petroleum revenue tax reveals that there is unique rate for computing capital taxes so that they remain economically neutral. The study evaluated the UK petroleum revenue tax and finds that the tax policy is relatively efficient and neutral when computed against a neutral resource rent tax. The study raises questions on tax policies that were reevaluated and eventually scrapped.

The Barsky, Mankiw and Zeldes model on Tax-Insurance Effect (TIE) is extended to include an explicit labor supply decision. It is argued that the risky income distribution used in the Barsky, Mankiw and Zeldes model leads to Marginal Efficiency Costs of taxation as high as three to ten dollars per dollar of tax rebate. It is also shown that negative labor supply effects result in a decrease in current consumption.

The issues of an optimal tax system are examined in relation to the transformation of Central and Eastern Europe into market economies. A quantifiable model is designed in which the government is less opposed to inequality, even though inequality in skills continues to grow. Such conditions make up for changes in the optimal tax rate. However, the changes are trivial when compared with the changes in a capable tax collection system, or with decreasing business revenues. The latter two effect large decreases in optimal transfers.

This paper examines the role of public provision of goods as a redistributive mechanism when tax policies are designed optimally on the basis of the information available to the government. We characterize Pareto-efficient allocations that are attainable through the tax policy, and derive the conditions under which public provision will enhance welfare above the maximum that can be achieved through a mix of a general income tax and commodity taxes (price subsidies). First, when there are two produced goods, we prove that public provision is always Pareto-improving. The improvement is achieved through changing individuals' actual consumption levels. Second, with no restrictions on the number of goods, we derive a sufficient condition for public provision to be Pareto-improving. This is achieved by weakening self-selection constraints so that welfare improving tax changes are made possible. Suitable examples include provision of day care, basic health care and rights to a minimum old age pension. Keywords: In-kind transfers; Self-selection; Optimal tax policy

A model is developed to study the effects of volatile revenue receipts on a developing country. It is shown that reducing volatility can increase the effectiveness of economic programs. Changing the tax structure of a developing country by adopting a combination of taxes which allows an increase in tax revenue while reducing the variability of receipts can increase overall revenues. The tax structure of Fiji is also examined.

I. Introduction The traditional theory of optimal taxation assumes that wage and interest incomes are received and taxed at different times. For example, Atkinson and Sandmo [2] and King [9] [...]

The variation of optimal environmental tax rates from rates implied by the Pigovian principle in a second-best situation where other, distortionary taxes are present, is studied. The analytical model used shows that optimal environmental tax rates are lesser than the rates forecasted by the Pigovian principle. Simulations using the numerical model support these findings. Under central values for parameters, optimal carbon tax rates are between six and twelve percent below the marginal environmental damages.

A model reflects the activity between a government that maximizes tax revenue and a spatial monopolist that maximizes profit. The model assumes the government utilizes a per-unit output tax and a transport tax, while the monopolist is able to strategically change its location and mode of transport. The model demonstrates that if the government is only allowed to use one tax instrument, it would use a per-unit output tax as this forces the monopolist to use inefficient strategic choices in order to avoid profit losses.

A mathematical model is used to evaluate the effectivity of an emissions tax in an industry where there are only a few competitors, and whether emissions taxes spur oligopolists to spend for alternative pollution abatement technologies. Firms are assumed to act either simultaneously, coordinating decisions on whether or not to invest in pollution abatement technology. Another scenario assumes that firms act independently of each other in a sequential game of perfect information.