A microeconomic theoretical model shows that two factors - the compensation and progressivity effects - produce the shifting (if any) of tax rates on wage formation. From an analytical viewpoint, they may be positive or negative and of equal or different sign. A microfounded nested macroeconomic...

Difficulties in European fiscal harmonization will mainly depend on present inter-country differences in effective rather than scheduled tax rates and tax structures. This paper therefore tries to evaluate the historical and current heterogeneities and similarities which characterize not only de...

We analyze the impact of micro-founded political institutions on economic growth in an overlapping-generations economy, where individuals differ in preferences over a public good (as well as in age). Labour and capital taxes finance the public good and a public input. The benchmark institution...

We evaluate the effectiveness of a more progressive tax scheme in raising government revenues. We develop a life-cycle economy with heterogeneity and endogenous labor supply. Households face a progressive income tax schedule, mimicking the Federal Income tax, and flat-rate taxes that capture...

This paper examines the impact of thin capitalization rules that limit the tax deductibility of interest on the capital structure of the foreign affiliates of US multinationals. We construct a new data set on thin capitalization rules in 54 countries for the period 1982-2004. Using confidential...

We use micro data from the U.S. Internal Revenue Service to document how Federal Income tax liabilities vary with income, marital status and the number of dependents. We report facts on the distributions of average taxes, properties of the joint distributions of taxes paid and income, and...