| 来源类型 | Article |
| 规范类型 | 评论 |
| Tax Reform Requires Transparency | |
| Aparna Mathur; Cody Kallen; Matt Jensen | |
| 发表日期 | 2016-12-08 |
| 出版年 | 2016 |
| 语种 | 英语 |
| 摘要 | For a case study on the importance of these assumptions, let’s consider an example from recent memory: Hillary Clinton’ proposed 4 percent surtax on taxpayers with adjusted gross income over $5 million. The Clinton campaign calculated that the 4 percent surcharge would reap $150 billion in revenue over a decade. But that claim assumed that those paying the higher tax rate wouldn’t make an effort to reduce their taxable income – whether through shifting income into nontaxable forms or simply working and saving less. Statistical studies show that people – especially those with higher incomes – do exactly that when faced with higher tax rates. Executives, for example, may shift income away from salaries and bonuses towards stock options that are not immediately taxable. Investors may change the timing of their assets sales, to shift capital gains realizations into low tax years. When tax rates rise, taxpayers tend to shift from labor to leisure and from saving to consumption. Economists summarize the magnitude of these responses with numbers called “behavioral elasticities.” Higher elasticities mean larger responses. Using an open source economic model, Tax-Calculator and IRS data, we can examine how behavioral elasticities affect the revenue raised by Clinton’s proposed surtax. Without any behavioral response, we find that the surtax would have raised $144 billion over 10 years. This estimate is similar to the Tax Foundation’s static estimate of $147 billion and the Tax Policy Center’s estimate of $140 billion. However, the picture changes dramatically when we assume even small changes in taxpayers’ behavior. The interactive widget below allows you to observe the revenue impact of the Clinton tax plan under various assumptions about how people will behave. You can toggle between different levels of responses based on findings in the economic literature. The choices range from 0 (no behavioral response), 0.25 (the midpoint estimate from Saez, Slemrod and Giertz, 2012), 0.4 (Gruber and Saez, 2002), 0.55 (Burns and Ziliak, 2016) and 1.09 (Saez, 2004). The high estimate of 1.09 is specific to the top 0.01 percent of taxpayers. The widget also allows you to include additional, persistent, capital gains behavioral response based on the work of Dowd, McClelland and Muthitacharoen (2012), recognizing that capital gains realizations tend to be more responsive to tax rate changes than other types of income. The differences are stark. As individuals engage in more tax avoidance, the revenue effect of the surtax plummets, from $144 billion to negative $69 billion. This example highlights the importance of sensitivity analysis in revenue estimation. With so much at stake in the coming tax reform debate, policymakers and the public should demand transparency in revenue estimation. Estimators should disclose key assumptions and provide estimates reflecting a range of assumptions to ensure that we don’t adopt major policy changes under an illusion of certainty. |
| 主题 | Economics ; Public Economics |
| 标签 | Open Source Policy Center (OSPC) ; Tax reform ; tax revenues |
| URL | https://www.aei.org/articles/tax-reform-requires-transparency/ |
| 来源智库 | American Enterprise Institute (United States) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/261554 |
| 推荐引用方式 GB/T 7714 | Aparna Mathur,Cody Kallen,Matt Jensen. Tax Reform Requires Transparency. 2016. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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