The desirability of inheritance and gift taxes depends on individuals’ tax responsiveness. This paper demonstrates how strongly, and in what way, the German inheritance and gift tax influences taxpayer behavior. To that end, it combines administrative data with cross-bracket tax variation: a...

The desirability of inheritance and gift taxes depends on individuals' tax responsiveness. This paper demonstrates how strongly, and in what way, the German inheritance and gift tax influences taxpayer behavior. To that end, it combines administrative data with cross-bracket tax variation: a...

This Handbook entry presents a conceptual, normative overview of the subject of taxation. It emphasizes the relationships among the main functions of taxation—notably, raising revenue, redistributing income, and correcting externalities—and the mapping between these functions and various...

We investigate bunching at personal tax thresholds over a 40-year period. At kinks, where the marginal tax rate rises, we find bunching among company owner-managers and the self-employed, but not those with only employment income. Notches, where the average rate rises, provide compelling...

In July, 2011, the Budgetary Affairs Commission of the Standing Committee of China’s National People’s Congress convened an international symposium on reform of China’s Personal Income Tax (PIT) system. Currently about 30 years old, the Chinese PIT system very roughly resembles the U.S....

We present an argument from micro-economic foundations suggesting that the federal Alternative Minimum Tax has potentially salutary – and heretofore unrecognized – effects that counteract pathologies of state budgets over the business cycle. AMT liability increases with income, and acts to...

We present an argument from micro-economic foundations suggesting that the federal Alternative Minimum Tax has potentially salutary – and heretofore unrecognized – effects that counteract pathologies of state budgets over the business cycle. AMT liability increases with income, and acts to...

This year’s $1.35 trillion tax cut reduced income tax rates and modestly liberalized the tax rules for retirement saving plans. However, the new tax law did not slow the progression of the tax code toward increasing levels of complexity. In fact, the law made 441 changes to the tax code and...