Macroeconomics Chapter 131 Taxes C h a p t e r 1 3.

Macroeconomics Chapter 13 1

Taxes

C h a p t e r 1 3


Taxes in the United States


Taxes in China

0

0. 05

0. 1

0. 15

0. 2

0. 25

0. 3

0. 35

财政收入中央地方


Types of Taxes


Types of Taxes

项目国家财政收入

2007 　　

中央地方

　

总计 51321.78 27749.16 23572.62

税收收入 45621.97 26369.85 19252.12

国内增值税 15470.23 11602.61 3867.62

国内消费税 2206.83 2206.83

进口货物增值税、消费税 6153.41 6153.41

出口货物退增值税、消费税

-5635.00 -5635.00

营业税 6582.17 202.66 6379.51

企业所得税 8779.25 5646.97 3132.28

个人所得税 3185.58 1911.80 1273.78

资源税 261.15 261.15

城市维护建设税 1156.39 7.69 1148.70

房产税 575.46 575.46

印花税 2261.75 1945.15 316.60

# 证券交易印花税 2005.31 1945.15 60.16

项目国家财政收入

2007 　　

中央地方

　

城镇土地使用税 385.49 385.49

土地增值税 403.10 403.10

车船税 68.16 68.16

船舶吨税 18.20 18.20

车辆购置税 876.90 876.90

关税 1432.57 1432.57

耕地占用税 185.04 185.04

契税 1206.25 1206.25

烟叶税 47.80 47.80

其他税收收入 1.24 0.06 1.18

非税收入 5699.81 1379.31 4320.50

专项收入 1241.85 153.69 1088.16

行政事业性收费 1897.35 353.66 1543.69

罚没收入 840.26 28.25 812.01

其他收入 1720.35 843.71 876.64


Types of Taxes

taxes fall on forms of income: individual income taxes, corporate profits

taxes, and contributions for Social Security and Medicare.

taxes are based on expenditures: sales taxes, excise taxes, and customs

duties.

Property taxes


Types of Taxes

The marginal tax rate is the additional tax paid on an additional dollar of income.

The average tax rate is the ratio of total taxes paid to total income.

An important property of the U.S. federal individual income tax is that the marginal tax rate rises with income.


Types of Taxes


Types of Taxes

（工资、薪金所得适用）个人所得税税率表一　　级数全月应纳税所得额税率（％）

1 不超过 500 元的 5

2 超过 500 元至 2000 元的部分 10

3 超过 2000 元至 5000 元的部分 15

4 超过 5000 元至 20000 元的部分 20

5 超过 20000 元至 40000 元的部分 25

6 超过 40000 元至 60000 元的部分 30

7 超过 60000 元至 80000 元的部分 35

8超过 80000 元至 100000 元的部

分 40

9 超过 100000 元的部分 45


Types of Taxes


Taxes in the Model

Household Budget Constraint

C + (1/P)·B+ K = (w/P)·Ls+ r·(B/P+K) + V − T


Taxes in the Model

Let τw be the marginal tax rate on labor income. a higher τw will generate more tax

revenue for the government unless the amount of labor income falls sharply.

Let τw be same for all levels of income same for all time

--- no intertemporal substitution.


Taxes in the Model

Income effects from a change inτw

V − T = −G Therefore, if government purchases, G,

are unchanged ， real transfers net of real taxes, V − T, must also be unchanged. For given G, we do not get any changes in household real income through the term V − T.

In other words, if G is fixed, there are no income effects from a change inτw.


Taxes in the Model

after-tax real wage rate = (1−τw)·(w/P)

If the marginal tax rate, τw, rises, for a given

w/P, (1−τw)·(w/P) falls.

We predict that the household would reduce the quantity of labor supplied, take more leisure time, and consume less.

--- intratemporal substitution


Taxes in the Model


Taxes in the Model

For a given pretax real wage rate, w/P, a higher τw implies a lower after-tax real wage rate, (1 − τw) · (w/P) .

A rise in τw shifts the labor supply curve leftward from the blue one labeled Ls to the green one labeled (Ls ) .

This decrease in labor supply reflects the substitution effect from the higher labor-income tax rate, τw


Taxes in the Model

a higher marginal tax rate on labor income, τw, lowers the quantity of labor input, L.

(1 − τw) · (w/P) also decreases.

This effect will spill over to the market for capital services because the reduction in L tends to reduce the marginal product of capital services, MPK.


Taxes in the Model


Taxes in the Model

Y= A· F(κ K, L) we found that a rise in the labor-income

tax rate, τw, reduced the quantities of labor, L, and capital services, κK.

A higher marginal tax rate on labor income, τw, leads to a reduction in overall market activity, as gauged by real GDP, Y.


Taxes in the Model

A Tax on Asset Income C+ (1/P)·B+ K = ( w/P) ·Ls+ r · ( B/P +K) + V − T

r = ( R/ P) · κ − δ(κ)

Let τr be the marginal tax rate on asset income.


Taxes in the Model

A Tax on Asset Income

(1−τr) · r = (1−τr)·[(R/P)·κ−δ(κ) ]


Taxes in the Model

For the choice between C1 and C2 is the after-tax real interest rate, (1−τr)·r . If τr rises, for given r, (1−τr)·r declines.

Households have less incentive to defer consumption, and it reacts by increasing C1 compared to C2. For given real income in year 1, an increase in τr motivates the household to consume more and save less in year 1.


Taxes in the Model

(κK )d : does not change. (κK )s : choose κ to maximize (1−τr)·r.

Hence, no change in the rental market.

No change in labor and GDP.

In the long run, the decrease in I leads to a lower GDP.


Taxes in the Model

A Tax on consumption C+ ( 1/P)·B+ K = ( w/P) ·Ls+ r · ( B/P +K) + V − T Suppose now that real taxes, T, depend

on a household’s consumption Let τc be the marginal tax rate on asset

income.


Taxes in the Model

A Tax on consumption T = τc C C+ ( 1/P)·B+ K = (w/P) ·Ls+ r · (B/P+K) + V −τc C

The net real wage: (w/P) / (1+τc)

The net real interest rate: r / (1+τc)


An Increase in Government Purchases Financed by a Labor Income Tax

Effects from a permanent increase in government purchases, G. assumed, that the increase in G was financed by lump-sum taxes. Our finding was that an increase in G by one

unit left real GDP, Y, unchanged and reduced consumption, C, by about one unit.

Gross investment, I, was unchanged. Also unchanged were the real wage rate, w/P,

the real rental price, R/P, and the real interest rate, r.



Now combine the permanent increase in G and the higher marginal income tax

rateτw

The income effect increases the supply of labor.



We found in this chapter that the substitution effect from a higher marginal tax rate, τw, on labor income reduces the quantity of labor supplied.

The net effect on the supply of labor is not so large.



Empirically, the overall effect from permanently increased government purchases, G, on the quantity of labor supplied, Ls , seems to be small.


Transfer Payments

Suppose that the government increases real transfers, V, and finances these expenditures with increased real taxes, T, collected by a tax on labor income.

In this case, marginal income tax rates, τw, rise for two reasons. First, the rise in T goes along with a higher τw for

households that pay individual income taxes. Second, for households that are receiving transfers—

such as poor welfare recipients—the expansion of the transfer program raises the implicit marginal income tax rate, τw, because of the income testing for benefits.

We therefore predict even stronger effects In particular, labor input, L, capital services, κK, and real GDP, Y, tend to decline.

Macroeconomics Chapter 131 Taxes C h a p t e r 1 3.

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Transcript of Macroeconomics Chapter 131 Taxes C h a p t e r 1 3.