公共政策的经济分析（英文）Chap13 Taxation and Efficiency

Chapter13–TaxationandEfficiencyIntroductionArepeopleunaffectedbyataxincreaseiftheypayzerointaxesafterwards?No,consumptionmayhavechangedinresponsetothetaxincreaseBundleconsumedislessdesirableExcessburdenisalossofwelfareaboveandbeyondthetaxrevenuescollected.ExcessBurdenDefinedTwocommoditiesBarleyandcornFixedincomePbandPcarepricesofgoodsNodistortionssuchasexternalities,imperfectcompetition,publicgoods,etc.ExcessBurdenDefinedFigure13.1showsthebudgetconstraint(AD),withutilitymaximizedatbundleE1.Ad-valoremtaxleviedonbarleyatratetbraisesthepriceto(1+tb)Pb,androtatesthebudgetconstraintalongthex-axis.ThenewbudgetconstraintisAF.ExcessBurdenDefinedAteachconsumptionlevelofbarley,theverticaldistancebetweenADandAFshowstaxpaymentsintermsofforgonecorn.NormalizePc=$1sothatverticaldistancecanbemeasuredineitherquantityofcornordollars.ExcessBurdenDefinedFigure13.2showsnewoptimizingchoicewiththehigherpricesalongbudgetconstraintAF.UtilitymaximizedatbundleE2.Verticaldistancebetweenold&newbudgetconstraintsisGE2isthe“taxbill.〞ExcessBurdenDefinedAnytaxwilllowerutility,butisthereanalternativetaxthatraisesthesamerevenue,GE2,butentailsasmallerutilityloss?Orgreaterrevenuewiththesameutilityloss?Ifso,thetaxonbarleyleadstoexcessburden.ExcessBurdenDefinedEquivalentvariationistheamountofincomewewouldhavetotakeaway(beforeanytaxwasimposed)toinduceamovetothelowerindifferencecurve.Takingawayincomeisequivalenttoaparallelmovementinwardonthebudgetconstraint.BudgetconstraintHIinFigure13.3showsthis.ExcessBurdenDefinedNotethatME3=GN>GE2,butbothgivetheconsumerthesameutility.Thus,thedifferenceE2Nistheexcessburdenofthebarleytax.Thebarleytaxmakesthepersonworseoffbyanamountthatexceedstherevenueitgenerates.ExcessBurdenDefinedLumpsumtaxisataxthatmustbepaidregardlessofthetaxpayer’sbehavior.BudgetconstraintHIsatisfiesthis.Revenueyieldexactlyequalstheequivalentvariation.Conclusion:Lumpsumtaxhasnoexcessburden.QuestionsandAnswersWhyaren’tlumpsumtaxeswidelyused?Construedasunfairbecausepeople’sabilitiestopayvaryHowdolumpsumtaxesrelatetowelfareeconomics?Theequilibriumconditionsbecome:QuestionsandAnswersIntuitively,whenMRS>MRTthemarginalutilityofsubstitutingbarleyconsumptionforcornconsumptionexceedsthechangeinproductioncostsfromdoingso.Inthepresenceofthetax,thereisnofinancialincentivetodoso.QuestionsandAnswersIntuitively,whenMRS>MRTthemarginalutilityofsubstitutingbarleyconsumptionforcornconsumptionexceedsthechangeinproductioncostsfromdoingso.Inthepresenceofthetax,thereisnofinancialincentivetodoso.QuestionsandAnswersDoesanincometaxentailexcessburden?Itusuallydoesentailexcessburden,ifathirdcommodity,leisure,exists.Ifdemandforacommodityisperfectlyinelastic,isthereexcessburden?QuestionsandAnswersInFigure13.4,theordinary(uncompensated)demandcurveisinelastic–B1=B2whenthepriceincreases.Butthisisbecausetheincomeeffectoffsetsthesubstitutioneffect.Thesubstitutioneffectisthepartnecessarytocomputeexcessburden.Thecompensateddemandcurve(whichholdsutilityconstantaspriceschange)istherelevantone,andtheelasticityforitisnon-zero.ExcessBurdenMeasurementwithDemandCurvesConsideracompensateddemandcurve,suchastheoneinFigure13.5.Imposeanad-valoremtaxonbarley,sothatitspriceincreasesto(1+tb)Pb.Equivalenttothesupplycurveshiftingupward.ExcessBurdenMeasurementwithDemandCurvesExcessburdenequaltotrianglefid.Throughsomemathematicalmanipulation,thiscanbeexpressedas:ExcessBurdenMeasurementwithDemandCurvesImplicationsofformula:Higher(compensated)elasticitiesleadtolargerexcessburdenExcessburdenincreaseswiththesquareofthetaxrateThegreatertheinitialexpenditureonthetaxedcommodity,thelargertheexcessburdenDifferentialTaxationofInputsSomeinputsaretaxeddifferentlydependingonwheretheyareused:Capitalusedinthecorporatesectorissubjecttoahighertaxratethancapitalusedinthenoncorporatesector.LaborusedinthehouseholdisuntaxedFigure13.8measurestheefficiencycostDifferentialTaxationofInputsInthisfigure,totalamountoflaborisfixedatOO’.Movingalongthex-axissimplyshiftslaborfromthelabormarkettothehouseholdsector.VMPisthevalueofmarginalproduct,orthedollarvalueoftheadditionalinputproducedfromanhourofwork.VMPdeclineswithhoursworkedinasector.Optimalallocationofhoursequatesmargins,suchthatOH*isspentinhouseholdproduction,andO’H*isspentinthemarket.DifferentialTaxationofInputsIfataxisleviedonmarketwork,butnothouseholdproduction,thenthe“effective〞VMPcurveformarketworkrotatesdownward.Figure13.9showstheeffects.DifferentialTaxationofInputsPeopleshifthoursintonon-marketwork.HouseholdproductionincreasesfromOH*toOHt,whilemarketworkdecreasesfromO’H*toO’Ht.Excessburdenequaltoabe.RecapofTaxationandEfficiencyExcessBurdenDefinedQuestionsandAnswersExcessBurdenMeasurementwithDemandCurvesDifferentialTaxationofInputs