Working Paper: NBER ID: w0673
Authors: Donald Fullerton; Roger H. Gordon
Abstract: General equilibrium models have recently been used to simulate the effects of many proposed tax changes. However, in modeling the effects of the government on the economy, these models have assumed for simplicity that marginal tax rates equal the observed average tax rates, and that marginal benefit rates are zero. The main purpose of this paper is to derive improved estimates of various marginal tax and benefit rates. Most importantly, we include in the model recent theories concerning the effects of combined corporate and personal taxes on corporate financial and investment decisions. The conclusions previously derived concerning the effects of corporate tax integration are then reexamined in light of the proposed changes.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| tax integration (H20) | overall welfare (I31) |
| labor income tax rates (H31) | overall welfare (I31) |
| unemployment insurance taxes (J65) | labor supply decisions (J22) |
| transfer receipts (H87) | labor income tax payments (J39) |
| workmen's compensation programs (J28) | labor supply decisions (J22) |