资源简介

(共28张PPT)
TAXATION, PRICES, EFFICIENCY, AND THE DISTRIBUTION OF INCOME
C h a p t e r 11
Lump-Sum Taxes
Fixed sum that a person would pay per year, independent of that person’s income, consumption of goods and services, or wealth
Do not prevent prices from equaling marginal social cost and benefit of any goods or services
Reduce ability of consumers to purchase market goods and services and to save
Head tax is a lump-sum tax that would require all adults to pay an equal amount each year to governing authorities.
Price-Distorting Tax
One that causes net price received by sellers of a good or service to diverge from gross price paid by buyers
Individual excess burden of a tax measures the loss in well-being to a taxpayer caused by the substitution effect of a price-distorting tax.
Indifference curve analysis can be used to compare effects of lump-sum and price-distorting tax, each collecting the same amount.
Price-Distorting Versus Lump-Sum Tax
Unit Tax
A levy of a fixed amount per unit of a good exchanged in a market
Tax is independent of price, so if price rises, no more revenue would be collected per unit
Sellers must cover the tax to avoid losses
Effect is equivalent to an increase in marginal cost to sellers that decreases supply
Unit Tax
Excess Burden of a Tax
Tax prevents market interaction among buyers and sellers from automatically equating MSC and MSB, required to attain efficiency
Total excess burden of a tax is additional cost to society over amount of dollars paid in a tax
Total excess burden of a unit tax is loss in well-being to buyers and sellers over what they would suffer under a lump-sum tax
Formula for excess burden of a unit tax:
Excess Burden of a Tax
With perfectly inelastic demand, the tax causes price to rise, but because quantity demanded is not reduced, change in output is zero and excess burden is zero:
Excess Burden of a Tax
With perfectly inelastic supply, sellers suffer a net reduction in price, so net revenue falls, but does not alter quantity supplied:
Efficiency-Loss Ratio
Ratio of the excess burden of a tax to the tax revenue collected each year by that tax:
Sometimes called the “coefficient of inefficiency” of the tax
Estimates of efficiency-loss ratios of different kinds of taxes useful in achieving minimization of total excess burden of taxation
Incidence of a Tax
Incidence of a tax – the distribution of the burden of paying a tax
Shifting of a tax – the transfer of the burden of paying a tax from those who are legally liable for it to others
Forward shifting – transfer of a tax’s burden from sellers who are liable for its payment to buyers as a result of an increase in the price of the good
Backward shifting – transfer of a tax’s burden from buyers who are liable for its payment to sellers through a decrease in market price of the good
Ad Valorem Taxes
Taxes levied as a percentage of the price of a good or service
Retail sales taxes
Payroll tax
The higher the price of the taxed good or service, the greater the tax per unit.
T = tPG = Tax Revenue per Unit of Output
Loss due to excess burden of an ad valorem tax varies with the square of the tax rate
Ad Valorem Taxes on Labor
Tax Incidence and Liability for Tax
Tax Incidence and Price Elasticities
Tax Incidence and Price Elasticities
Tax Incidence and Price Elasticities
Shifting Under Monopoly
Minimizing Excess Burden
In order to minimize excess burden associated with sale and excise taxes, tax authorities must tax various goods at differing rates rather than uniform rates.
For example, food and clothing
Assume food more elastic than clothing
Demand for each independent of the price of the other
When price of either good changes, demand curve for the other does not shift
Minimizing Excess Burden
Multimarket Analysis of Incidence
Concepts of Incidence
Incidence of a specific government policy refers to the resulting change in distribution of income available for private use attributable to that policy
Three concepts of incidence that relate to government taxes and expenditures are:
Budget incidence – evaluates effects of both government expenditure and tax policies on distribution of income in the private sector
Expenditure incidence – evaluates effects of alternative government expenditure projects on distribution of income
Differential tax incidence – resulting change in distribution of income when one type of tax is substituted for some alternative tax, yielding equivalent revenue, while both mix and level of government expenditures are held constant
Lorenz Curve
The Gini Coefficient
Summary index of the information contained in a Lorenz curve
Measures the degree of inequality for any income distribution by calculating the ratio of the area between the Lorenz curve corresponding to that distribution and the 45-degree line to the total area under the 45-degree line
So, for previous Lorenz curve:
Effective Tax Rates
Given progressive nature of federal taxes overall, they are likely to shift the Lorenz curve inward and contribute to reducing income inequality in the U.S.
Appendix: Compensated Demand Curves
Show relationship between price and quantity demanded of a good due only to substitution effects of price changes:
Appendix: Compensated Demand Curves
Appendix: Compensated Supply Curves
Curve that reflects only the substitution effects of input price changes:

展开更多......

收起↑