1、McGraw-Hill/IrwinCopyright 2008 by The McGraw-Hill Companies, Inc. All rights reserved.CHAPTER 1414-2VocabularyoStatutory Incidence oEconomic IncidenceoTax ShiftingoPartial Equilibrium Models 14-3Tax Incidence: General RemarksoOnly people can bear taxesnFunctional distribution of incomenSize distrib
2、ution of incomeoBoth sources and uses of income should be consideredoIncidence depends on how prices are determinedoIncidence depends on the disposition of tax revenuesnBalanced-budget tax incidencenDifferential tax incidencenLump-sum taxnAbsolute tax incidence14-4Tax Progressiveness Can Be Measured
3、 in Several WaysoAverage tax rate versus marginal tax rateoProportional tax systemoProgressive tax systemoRegressive tax systemTax Liabilities under a hypothetical tax systemIncomeTax LiabilityAverage Tax RateMarginal Tax Rate$2,000-$200-0.100.2 3,000000.25,0004000.080.210,0001,4000.140.230,0005,400
4、0.180.214-5Measuring How Progressive a Tax System isvIITITI1101100vTTTIII210010014-6Measuring How Progressive a Tax System is A Numerical ExamplevIITITI1101100vTTTIII2100100.0002510008003001000200800.0003100080036010002408002 03002002001000800800.2 03602402401000800800.14-7Before TaxAfter TaxConsume
5、rs PaySuppliers Receive$1.40$1.00$1.20$1.20D0S0D1S1Partial Equilibrium ModelsQuantity$14-80.60.811.21.41.61.822.22.42.6012345678DXSSXDXPerfectlyInelasticSupplyQuantity$14-90.60.811.21.41.61.822.22.42.6012345678DXSSXDXPerfectlyElasticSupplyQuantity$14-10Ad Valorem TaxesPounds of food per yearPrice pe
6、r Pound of foodDfSfQ0QmQrP0PmPrDf14-11Taxes on FactorsoThe Payroll TaxoCapital Taxation in a Global Economy14-12Commodity Taxation without CompetitionoMonopolyoOligopoly14-13Profits TaxesoEconomic profitoPerfect competitionoMonopolyoMeasuring economic profit14-14Tax Incidence and CapitalizationPR =
7、$R0 + $R1/(1 + r) + $R2/(1 + r)2 + + $RT/(1 + r)TPR = $(R0 u0) + $(R1 u1)/(1 + r) + $(R2 u2)/(1 + r)2 + + $(RT uT)/(1 + r)u0 + u1/(1 + r) + u2/(1 + r)2 + + uT/(1 + r)TCapitalization14-15General Equilibrium ModelsoPartial equilibrium oGeneral equilibrium14-16Tax Equivalence RelationstKF = a tax on ca
8、pital used in the production of foodtKM = a tax on capital used in the production of manufacturestLF = a tax on labor used in the production of foodtLM = a tax on labor used in the production of manufacturestF = a tax on the consumption of foodtM = a tax on consumption of manufacturestK = a tax on c
9、apital in both sectorstL = a tax on labor in both sectorst = a general income tax14-17Tax Equivalence RelationsoPartial factor taxestKFandtLFare equivalent totFandandandtKMandtLMare equivalent totMareareareequivalentequivalentequivalenttotototKandtLare equivalent totSource: McLure 1971.14-18The Harb
10、erger ModeloAssumptionsnTechnologyoElasticity of substitutionoCapital intensiveoLabor intensivenBehavior of factor suppliersnMarket structurenTotal factor suppliesnConsumer preferencesnTax incidence framework14-19Analysis of Various TaxesoCommodity tax (tF)oIncome tax (t)oGeneral tax on labor (tL)oP
11、artial factor tax (tKM)nOutput effectnFactor substitution effect14-20Some QualificationsoDifferences in individuals tastesoImmobile factorsoVariable factor supplies14-21An Applied Incidence StudyIncome CategoryAverage Federal Tax RateShare of Federal TaxesLowest Quintile 5.6%1.1%Second Quintile12.15
12、.2Third Quintile15.710.3Fourth Quintile19.819.0Highest Quintile26.564.2All Quintiles21.6100.0Top 1%31.221.3Source: Congressional Budget Office 2004. These figures are based on projections that rely on assumptions about inflation and income growth.They include all tax law as of 2001.Table 14.3Average federal tax rates and share of federal taxes by income quintile (2006)14-22The Payroll TaxHours per yearWage rate per hourDLSLL0 = L1wg = w0PrDLwn14-23MonopolyX per year$DXMRXATCXMXXX0P0ATC0abcdEconomicProfitsDXMRXPnigfhX1EconomicProfitsafter unittax
