In this paper, we study the optimal choices of the federal income tax, federal transfers, and local taxes in a dynamic model of capital accumulation and with explicit gamestructure s among multipleprivateage nts, multiplelocal governments, and the federal government. In general, the optimal...

We analyse the question of optimal taxation in a dual economy, when the government is concerned about the distribution of labour income. Income inequality is caused by the presence of sunk capital investments, which creates a 'good jobs' sector due to the capture of quasi-rents by trade unions....

This paper will discuss the creation of a system-wide quality service agenda for tax preparation for low-income families, with the chief focus on the Earned Income Tax Credit (“EITC”). The EITC is an important anti-poverty measure for low-income families. Therefore its administration will...

This paper analyzes the effects that differential tax treatment of married and single individuals has on marriage behavior, using a modified version of the two-sided search model of Burdett and Wright (1998). The main results are the following: i) although an increase in the "marriage tax"...

This paper utilizes the 1992 household budget survey of Bulgaria to show the poor revenue effects of the income tax structure prevailing in 1992 which did not take into account the underlying distribution of income. We also show that Bulgaria can benefit from a much simpler and lower income tax...

Discussion of marginal tax rates (MTRs) on low-income households often ignores the significance of income-conditioned benefits such as TANF, Food Stamps, Medicaid, and housing vouchers, and fails to account properly for the payroll tax or the possible accrual of expected Social Security...

We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in, and choose the amount of their sector-specific investments in human and...

This note examines how the income tax code can be altered to stabilize the economy in the face of fluctuations. First, the note suggests that tax expenditures for goods with high income elasticities should be replaced with government spending, while tax expenditures for inferior goods should be...

New Hampshire bills itself as a highly attractive state to individuals and businesses seeking to relocate. This claim is made in part because of its tax structure and its lack of individual income or sales taxes. Taxes have been, and continue to be, a central item of debate each election cycle...

The Earned Income Tax Credit (EITC) expansion in 1993 substantially increases the maximum credits available to a family with two or more children compared to a family with one child and a family with no children. Using national survey data and this differential increase in the maximum credits,...