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Richard J Cebula - One of the best experts on this subject based on the ideXlab platform.
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federal aggregate Personal Income Tax evasion unreported Income and its real interest rate yield effects on longer term treasury debt issues
Journal of Financial Economic Policy, 2019Co-Authors: Richard J CebulaAbstract:The purpose of this study is to empirically investigate the impact of aggregate federal Personal Income Tax evasion on the real interest rate yield on 10-year Treasury notes, 20-year Treasury bonds and 30-year US Treasury bonds.,An open-economy loanable funds model is developed, with Income Tax evasion expressly included in the specification in the form of the AGI (adjusted gross Income) gap and the ratio of unreported AGI to actual AGI, expressed as a per cent.,The empirical estimations reveal compelling evidence that Income Tax evasion thus measured acts to elevate the real interest rate yields on 10-year Treasury notes and both 20-year and 30-year Treasury bonds, raising the possibility of a Tax evasion-induced form of “crowding out”.,Ideally, Tax evasion data for a longer time period would be very useful.,To the extent that greater federal Personal Income Tax evasion yields a higher interest rate yield on 10-year, 20-year and 30-year Treasury debt issues, it is likely that the Tax evasion will also elevate other interest rates in the economy.,Higher interest rates resulting from Tax evasion would likely slow-down macroeconomic growth and accelerate unemployment.,Neither the Tax evasion literature nor the interest rate literature has ever considered the impact of Tax evasion behavior on long-term interest rates.
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an empirical analysis of the effects of budget deficits total and primary and Personal Income Tax rates on the ex post real interest rate yield on long term u s treasury bonds
Review of Economic Analysis, 2019Co-Authors: Richard J CebulaAbstract:This empirical study adopts an open-economy loanable funds model to investigate the impact of post-Bretton Woods U.S. federal government budget deficits and Personal Income Tax rates on the ex post real interest rate yield on thirty-year Treasury bonds. In this study, the budget deficit is measured in two different ways, the total (“unified”) budget deficit and the primary deficit (the total/unified deficit minus net interest payments). Two different estimation techniques, autoregressive two stage least squares estimation and the ARCH (Autoregressive Conditional Heteroskedasticity) Method, for the 1973-2016 study period provide evidence that the ex post real interest rate yield on thirty-year Treasury bonds has been an increasing function of both federal budget deficit measures (expressed as a percent of GDP) and the maximum marginal federal Personal Income Tax rate. The estimations all imply that elevating either the total/unified or primary federal budget deficit appears to raise the cost of borrowing in the U.S., whereas reducing the maximum marginal Personal Income Tax rate appears to reduce the cost of borrowing. Given the potential effects of longer-term real interest rates on investment in new plant and equipment and overall economic growth, policy-makers should not overlook these findings.
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an empirical analysis for the us of the impact of federal budget deficits and the average effective Personal Income Tax rate on the ex post real interest rate yield on ten year treasuries
PSL Quarterly Review, 2019Co-Authors: Richard J Cebula, Robert BoylanAbstract:We investigate the impact of federal government budget deficits and federal Personal Income Tax rates on the ex post real interest rate yield on ten-year US Treasury notes. Using autoregressive two-stage least squares estimations for the post-Bretton Woods era, we find that the yield on these Treasury issues has been an increasing function of the federal budget deficit as a percent of GDP, both in the form of the total/unified deficit and the primary deficit, and also an increasing function of the average effective federal Personal Income Tax rate. The estimation reveals that growth in the M2 money supply (relative to GDP) acts to reduce the real interest rate yield on ten-year Treasuries. Consequently, while a growing money supply can help to keep real interest rates on Treasury notes (and hence federal debt service costs) down, policymakers should be sensitive to the fact that both budget deficit increases and Tax rate increases can elevate the real interest rate. JEL codes : E43, E62, H62
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does a lower higher labour force participation rate imply greater lower Income Tax evasion an exploratory empirical inquiry for the u s
Applied Economics Letters, 2019Co-Authors: Richard J CebulaAbstract:This exploratory study seeks to add to the Income Tax evasion literature by investigating a heretofore ignored potential determinant of aggregate federal Personal Income Tax evasion in the U.S., na...
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an empirical note on Income Tax evasion behavior and the real interest rate yield on municipal bonds
The Journal of Regional Analysis and Policy, 2018Co-Authors: Richard J CebulaAbstract:This exploratory note investigate the impact of the aggregate degree of federal Personal Income Tax evasion on the ex post real interest rate yield on high grade municipal bonds. Several financial-market, economic, and statutory control variables are included in the system. Empirical estimation for the 1973-2012 study period leads to the preliminary conclusion that the ex post real interest rate yield on high grade Tax-free municipal bonds is an increasing function of the aggregate degree of federal Personal Income Tax evasion, implying that a higher degree of Income Tax evasion acts to raise the real cost of borrowing to cities, counties, and states and thereby acts to adversely affect the pace (and perhaps the geographic pattern) of urban and regional development across the U.S.
Jose Felix Sanzsanz - One of the best experts on this subject based on the ideXlab platform.
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the relative revenue power of the marginal Tax rates in Personal Income Tax schedules the revenue equivalent marginal rate increase remi
Applied Economics Letters, 2020Co-Authors: Jose Felix SanzsanzAbstract:ABSTRACTThe aim of this paper is to explore how the revenue power of the marginal Tax rates in Personal Income Tax rate schedules can be computed. Analytical expressions to measure the relative rev...
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the relative revenue power of the marginal Tax rates in Personal Income Tax schedules the revenue equivalent marginal rate increase remi
Applied Economics Letters, 2020Co-Authors: Jose Felix SanzsanzAbstract:The aim of this paper is to explore how the revenue power of the marginal Tax rates in Personal Income Tax rate schedules can be computed. Analytical expressions to measure the relative revenue eff...
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modelling aggregate Personal Income Tax revenue in multi schedular and multi regional structures
Economic Modelling, 2011Co-Authors: John Creedy, Jose Felix SanzsanzAbstract:Abstract This paper derives analytical expressions for aggregate Personal Income Tax revenue obtained from a multi-schedular and multi-regional Personal Income Tax system, with revenue divided among central and regional governments. Aggregate Income Tax revenue is expressed as a function of characteristics of the distribution of Taxable Income, making it possible to identify the sources of revenue differences among regions. The approach is applied to the Tax structure in Spain, and the effects of Income distribution differences among the Spanish regions are examined.
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modelling aggregate Personal Income Tax revenue in multi schedular and multi regional structures
Research Papers in Economics, 2010Co-Authors: John Creedy, Jose Felix SanzsanzAbstract:This paper derives analytical expressions for aggregate Personal Income Tax revenue obtained from a multi-schedular and multi-regional Personal Income Tax system, with revenue divided among central and regional governments. Aggregate Income Tax revenue is expressed as a function of characteristics of the distribution of Taxable Income, making it possible to identify the sources of revenue differences among regions. The approach is applied to the Tax structure in Spain, and the effects of Income distribution differences among the Spanish regions is examined.
Gilberto Turati - One of the best experts on this subject based on the ideXlab platform.
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what explains the redistribution achieved by the italian Personal Income Tax evidence from administrative data
Public Finance Review, 2018Co-Authors: Gianpaolo Barbetta, Simone Pellegrino, Gilberto TuratiAbstract:We analyze the Italian Personal Income Tax (PIT) in the light of the different tools available to the government to achieve Income redistribution. We focus in particular on three mechanisms: marginal Tax rates, deductions, and Tax credits. Exploiting an extended version of the standard Pfahler decomposition, we estimate the contribution of each of these three tools to the overall redistributive effect of the PIT using administrative data on more than 1.3 million individual Tax returns. Our estimates suggest that more than half of the total PIT redistributive effect is due to the two most important Tax credits (the Tax credit for employment and the Tax credit for retirement Income), while the marginal rates schedule contribution is about 40 percent. On the contrary, most of the itemized expenditures do not show any sizable impact on redistribution.
Liliana Cano - One of the best experts on this subject based on the ideXlab platform.
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Personal Income Tax and Income inequality in Ecuador between 2007 and 2011
CEPAL Review, 2017Co-Authors: Liliana CanoAbstract:This paper uses data from individual Income Tax returns to explore the redistributive effect of Personal Income Tax in Ecuador between 2007 and 2011. Following common practice in Tax incidence analysis, we first compute indices of Income Tax progressivity and redistributive impact. We then mobilize microsimulation techniques to simulate the redistributive effect of Personal Income Tax under different Taxable Income scenarios. Finally, we calculate the effective Tax rates paid by top Income groups and derive a range of optimal Income Taxes for the top 1% Income group. We obtain two main empirical results. First, although Ecuador’s Personal Income Tax is highly progressive, its redistributive capacity is low: our findings show that high-Income individuals are more likely to reduce their Taxable Income through legal Tax deductions than low-Income individuals. Second, while the effective Tax rates paid by high-Income individuals are relatively low, optimal Tax rates could be as high as 63%
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Personal Income Tax and Income inequality ecuador 2007 2011
Social Science Research Network, 2016Co-Authors: Liliana CanoAbstract:This paper assesses the redistributive impact of Ecuador’s Personal Income Tax (PIT) over the 2007-2011 period. First, using individual Income Tax return data we compute different indicators of Tax progressivity and redistributive impact (i.e. Kakwani, Suits and Reynolds-Smolensky indices) to estimate the extent to which Income inequality is modified by the PIT. Second, we mobilize microsimulation techniques to assess the redistributive effect of the PIT while testing different definitions of Taxable Income. Third, based on the top Incomes literature, we compute the effective Income Tax rates paid by top Income groups. Finally, based on the elasticity of Taxable Income literature, we derive optimal Income Tax rates for top Income groups. We find two main empirical results. First, although Ecuador’s PIT is highly progressive its redistributive capacity is very low because high-Income individuals are more likely to reduce their Taxable Income through legal Tax deductions than low-Income individuals. Second, the effective Tax rates paid by high-Income individuals are relative low (e.g. 7% for the top 1% group) while optimal Tax rates for top earners could be as high as 63%.
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Personal Income Tax and Income inequality new evidence from a south american country ecuador 2007 2011
2015Co-Authors: Liliana CanoAbstract:This paper assesses the redistributive impact of Ecuador’s Personal Income Tax (PIT) over the 2007-2011 period. First, using individual Income Tax return data we compute different indicators of Tax progressivity and redistributive impact (i.e. Kakwani, Suits and Reynolds-Smolensky indices) to estimate the extent to which Income inequality is modified by the PIT. Second, we mobilize microsimulation techniques to assess the redistributive effect of the PIT while testing different definitions of Taxable Income. Third, based on the top Incomes literature, we compute the effective Income Tax rates paid by top Income groups. Finally, based on the elasticity of Taxable Income literature, we derive optimal Income Tax rates for top Income groups. We find two main empirical results. First, although Ecuador’s PIT is highly progressive its redistributive capacity is very low because high-Income individuals are more likely to reduce their Taxable Income through legal Tax deductions than low-Income individuals. Second, the effective Tax rates paid by high-Income individuals are relative low (e.g. 7% for the top 1% group) while optimal Tax rates for top earners could be as high as 63%.
John Creedy - One of the best experts on this subject based on the ideXlab platform.
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modelling aggregate Personal Income Tax revenue in multi schedular and multi regional structures
Economic Modelling, 2011Co-Authors: John Creedy, Jose Felix SanzsanzAbstract:Abstract This paper derives analytical expressions for aggregate Personal Income Tax revenue obtained from a multi-schedular and multi-regional Personal Income Tax system, with revenue divided among central and regional governments. Aggregate Income Tax revenue is expressed as a function of characteristics of the distribution of Taxable Income, making it possible to identify the sources of revenue differences among regions. The approach is applied to the Tax structure in Spain, and the effects of Income distribution differences among the Spanish regions are examined.
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Personal Income Tax structure theory and policy
Research Papers in Economics, 2010Co-Authors: John CreedyAbstract:There is now a large and complex literature on optimal Income Taxation, within the context of second-best welfare economics. This paper considers the potential role of this analysis in the practical design of direct Tax and transfer structures. It is stressed that few results are robust, even in simple models, in view of the important role played by alternative social welfare functions, the nature of the distribution of abilities and the preferences of individuals. In view of these negative results, it is suggested that a range of empirical Tax analyses, capturing particular issues, can provide helpful guidance for policy analysts. Numerical illustrations are provided, paying attention to the role of a ‘top’ marginal Tax rate applied to higher-Income groups. In particular, behavioural microsimulation models can be used to examine marginal direct Tax reform. Such models have the advantages of capturing the full extent of population heterogeneity and the complexity of the Tax structure.
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modelling aggregate Personal Income Tax revenue in multi schedular and multi regional structures
Research Papers in Economics, 2010Co-Authors: John Creedy, Jose Felix SanzsanzAbstract:This paper derives analytical expressions for aggregate Personal Income Tax revenue obtained from a multi-schedular and multi-regional Personal Income Tax system, with revenue divided among central and regional governments. Aggregate Income Tax revenue is expressed as a function of characteristics of the distribution of Taxable Income, making it possible to identify the sources of revenue differences among regions. The approach is applied to the Tax structure in Spain, and the effects of Income distribution differences among the Spanish regions is examined.
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Personal Income Tax structure theory and policy
Chapters, 2010Co-Authors: John CreedyAbstract:The eminent contributors (including Altshuler, Creedy, Freebairn, Gravelle, Heady, Kalb, Sorensen and Zodrow) investigate the beneficial directions for medium-term Tax reform in the light of global developments and lessons from the latest Taxation research. In addressing this issue, they review recent advances in both the theoretical and empirical Tax literature and reform evidence from individual countries. Topics covered include the impact of Taxes on economic performance; international and corporate Taxation; Personal Tax and welfare systems; environmental Taxation; and country-specific Tax reform experiences.
