1、CHAPTER 14TAXATION AND INCOME DISTRIBUTION第1頁，共23頁。VocabularyStatutory Incidence Economic IncidenceTax ShiftingPartial Equilibrium Models 0第2頁，共23頁。Tax Incidence: General RemarksOnly people can bear taxesFunctional distribution of incomeSize distribution of incomeBoth sources and uses of income shou

2、ld be consideredIncidence depends on how prices are determinedIncidence depends on the disposition of tax revenuesBalanced-budget tax incidenceDifferential tax incidenceLump-sum taxAbsolute tax incidence第3頁，共23頁。Tax Progressiveness Can Be Measured in Several WaysAverage tax rate versus marginal tax

3、rateProportional tax systemProgressive tax systemRegressive tax systemTax Liabilities under a hypothetical tax systemIncomeTax LiabilityAverage Tax RateMarginal Tax Rate$2,000-$200-0.100.2 3,000000.25,0004000.080.210,0001,4000.140.230,0005,4000.180.2第4頁，共23頁。Measuring How Progressive a Tax System is

4、第5頁，共23頁。Measuring How Progressive a Tax System is A Numerical Example第6頁，共23頁。Before TaxAfter TaxConsumers PaySuppliers Receive$1.40$1.00$1.20$1.200D0S0D1S1Partial Equilibrium ModelsQuantity$第7頁，共23頁。0DXSSXDXPerfectlyInelasticSupplyQuantity$第8頁，共23頁。0DXSSXDXPerfectlyElasticSupplyQuantity$第9頁，共23頁。A

5、d Valorem TaxesPounds of food per yearPrice per Pound of foodDfSfQ0QmQrP0PmPrDf第10頁，共23頁。Taxes on FactorsThe Payroll TaxCapital Taxation in a Global Economy第11頁，共23頁。Commodity Taxation without CompetitionMonopolyOligopoly第12頁，共23頁。Profits TaxesEconomic profitPerfect competitionMonopolyMeasuring econ

6、omic profit第13頁，共23頁。Tax Incidence and CapitalizationPR = $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)TCapitalization第14頁，共23頁。General Equilibrium ModelsPartial equilibrium Gener

7、al equilibrium第15頁，共23頁。Tax Equivalence RelationstKF = a tax on capital 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 consumpti

8、on of foodtM = a tax on consumption of manufacturestK = a tax on capital in both sectorstL = a tax on labor in both sectorst = a general income tax第16頁，共23頁。Tax Equivalence RelationsPartial factor taxestKFandtLFare equivalent totFandandandtKMandtLMare equivalent totMareareareequivalentequivalentequi

9、valenttotototKandtLare equivalent totSource: McLure 1971.第17頁，共23頁。The Harberger ModelAssumptionsTechnologyElasticity of substitutionCapital intensiveLabor intensiveBehavior of factor suppliersMarket structureTotal factor suppliesConsumer preferencesTax incidence framework第18頁，共23頁。Analysis of Vario

10、us TaxesCommodity tax (tF)Income tax (t)General tax on labor (tL)Partial factor tax (tKM)Output effectFactor substitution effect第19頁，共23頁。Some QualificationsDifferences in individuals tastesImmobile factorsVariable factor supplies第20頁，共23頁。An Applied Incidence StudyIncome CategoryAverage Federal Tax

11、 RateShare of Federal TaxesLowest Quintile 5.6%1.1%Second Quintile12.15.2Third 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)第21頁，共23頁。The Payr