Essays on the normative and positive aspects of the theory of taxation: Tax reform, optimal tax, and tax incidence.

摘要

This research consists of independent essays in the areas of tax reform, optimal tax, and tax incidence, but the work also highlights the relationships between these distinct fields.; Chapter 1 of the dissertation extends the static Diamond-Mirrlees-Guesnerie model (which is essentially the Arrow-Debreu model but with commodity taxes) to a dynamic setting, and explicitly analyzes tax reform as a dynamic process. The link between the tax reform and optimal tax approaches is also highlighted in Chapter 1. That is, necessary conditions for the non-existence of an equilibrium preserving and Pareto improving policy reform process are, in fact, necessary conditions for the status quo to be (second-best) Pareto optimal. These conditions for second-best optimality in the dynamic model are compared to the corresponding conditions in the static Diamond-Mirrlees-Guesnerie model.; Chapter 2 is a more traditional essay in the field of optimal taxation. The model also combines both linear taxation of commodities and non-linear taxation of labor income. Non-linear (i.e., progressive) taxation of labor income is used by governments to achieve a more equitable distribution of income, but there are limits to how much redistribution can be achieved through the tax system. These limits suggest public expenditures can usefully supplement an optimal redistributive tax system. While most public expenditure programs of this sort are targeted and directly benefit low-income households (e.g., health services, pensions, welfare payments, etc.), a large proportion of public higher education expenditures is devoted to providing 'white collar' or professional level education through universities, rather than 'blue collar' or vocational training through technical colleges, apprenticeship programs, and the like. These expenditures would seem to favor high-skill high-productivity individuals, rather than low-skill low-productivity individuals. However, Chapter 2 argues that this (perhaps counter-intuitive) state of affairs is entirely consistent with an optimal redistributive program.; Chapter 3 is an essay on tax incidence and is therefore positive in nature, as opposed to the normative analyses of optimal tax and tax reform. It could be argued that tax reform has both positive and normative elements, and reflecting this mix Chapter 3 studies tax incidence using many of the techniques used in Chapter I to study tax reform. The analytical techniques and the model employed to study tax incidence in this work differ substantially from the approaches taken in the existing tax incidence literature. The question of interest is the incidence of substituting consumption taxes for income taxes, as many countries have recently increased or introduced consumption taxes and reduced income tax rates. Opponents of this trend from direct taxation to indirect taxation argue that these reforms make the tax system less progressive, and therefore hurt low-income families. Governments have responded by attempting to 'design' the tax changes in such a way as to protect the wellbeing of certain groups. However, Chapter 3 highlights the potential usefulness (or otherwise!) of these attempts by characterizing the conditions under which substituting consumption taxes for income taxes (i) cannot make a particular class of consumers better-off, (ii) cannot make a particular class of consumers worse-off, and (iii) can make a particular class of consumers better-off if the tax changes are 'appropriately' designed. (Abstract shortened by UMI.)