Behavioral Simulation Methods in Tax Policy Analysis
9780226240848
9780226241753
Behavioral Simulation Methods in Tax Policy Analysis
These thirteen papers and accompanying commentaries are the first fruits of an ongoing research project that has concentrated on developing simulation models that incorporate the behavioral responses of individuals and businesses to alternative tax rules and rates and on expanding computational general equilibrium models that analyze the long-run effects of changes on the economy as a whole.
The principal focus of the project has been on the microsimulation of individual behavior. Thus, this volume includes studies of individual responses to an over reduction in tax rates and to changes in the highest tax rates; a study of alternative tax treatments of the family; and studies of such specific aspects of household behavior as tax treatment of home ownership, charitable contributions, and individual saving behavior. Microsimulation techniques are also used to estimate the effects of alternative policies on the long-run financial status of the social security program and to examine the effects of alternative tax rules on corporate investment and of foreign-source income on overseas investment.
The papers devoted to the development of general equilibrium simulation models to include an examination of the implications of international trade and capital flows, a study of the effects of capital taxation that uses a closed economy equilibrium model, and an examination of the effect of switching to an inflation-indexed tax system. In the volume’s final paper, a life-cycle model in which individuals maximize lifetime utility subject to a lifetime budget constraint is used to simulate the effects of tax rules on personal savings.
The principal focus of the project has been on the microsimulation of individual behavior. Thus, this volume includes studies of individual responses to an over reduction in tax rates and to changes in the highest tax rates; a study of alternative tax treatments of the family; and studies of such specific aspects of household behavior as tax treatment of home ownership, charitable contributions, and individual saving behavior. Microsimulation techniques are also used to estimate the effects of alternative policies on the long-run financial status of the social security program and to examine the effects of alternative tax rules on corporate investment and of foreign-source income on overseas investment.
The papers devoted to the development of general equilibrium simulation models to include an examination of the implications of international trade and capital flows, a study of the effects of capital taxation that uses a closed economy equilibrium model, and an examination of the effect of switching to an inflation-indexed tax system. In the volume’s final paper, a life-cycle model in which individuals maximize lifetime utility subject to a lifetime budget constraint is used to simulate the effects of tax rules on personal savings.
520 pages | 6.00 x 9.00 | © 1983
National Bureau of Economic Research Project Report
Economics and Business: Economics--Government Finance
Table of Contents
Preface
Introduction by Martin Feldstein
1. Alternative Tax Treatments of the Family: Simulation Methodology and Results
Daniel R. Feenberg and Harvey S. Rosen
Comment: David A. Wise
2. Stochastic Problems in the Simulation of Labor Supply
Jerry A. Hausman
Comment: James J. Heckman
3. Alternatives to the Current Maximum Tax on Earned Income
Lawrence B. Lindsey
Comment: Joseph J. Minarik
4. The Distribution of Gains and Losses from Changes in the Tax Treatment of Housing
Mervyn A. King
Comment: Patric H. Hendershott
5. Simulating Nonlinear Tax Rules and Nonstandard Behavior: An Application to the Tax Treatment of Charitable Contributions
Martin Feldstein and Lawrence B. Lindsey
Comment: Harvey Galper
6. Alternative Tax Rules and Personal Saving Incentives: Microeconomic Data and Behavioral Simulations
Martin Feldstein and Daniel R. Feenberg
Comment: Martin J. Bailey
7. Modeling Alternative Solutions to the Long-Run Social Security Funding Problem
Michael J. Boskin, Marcy Avrin, and Kenneth Cone
Comment: Henry Aaron
8. Tax Reform and Corporate Investment: A Microeconometric Simulation Study
Michael A. Salinger and Lawrence H. Summers
Comment: Robert J. Shiller
9. Issues in the Taxation of Foreign Source Income
Daniel J. Frisch
Comment: Thomas Horst
10. Domestic Tax Policy and the Foreign Sector: The Importance of Alternative Foreign Sector Formulations to Results from a General Equilibrium Tax Analysis Model
Lawrence H. Goulder, John B. Shoven, and John Whalley
Comment: David G. Hartman
11. A Reexamination of Tax Distortions in General Equilibrium Models
Don Fullerton and Roger H. Gordon
Comment: Charles E. McLure, Jr.
12. A General Equilibrium Model of Taxation with Endogenous Financial Behavior
Joel Slemrod
Comment: Peter Mieszkowski
13. National Savings, Economic Welfare, and the Structure of Taxation
Alan J. Auerbach and Laurence J. Kotlikoff
Comment: Joseph E. Stiglitz
List of Contributors
Author Index
Subject Index
Introduction by Martin Feldstein
1. Alternative Tax Treatments of the Family: Simulation Methodology and Results
Daniel R. Feenberg and Harvey S. Rosen
Comment: David A. Wise
2. Stochastic Problems in the Simulation of Labor Supply
Jerry A. Hausman
Comment: James J. Heckman
3. Alternatives to the Current Maximum Tax on Earned Income
Lawrence B. Lindsey
Comment: Joseph J. Minarik
4. The Distribution of Gains and Losses from Changes in the Tax Treatment of Housing
Mervyn A. King
Comment: Patric H. Hendershott
5. Simulating Nonlinear Tax Rules and Nonstandard Behavior: An Application to the Tax Treatment of Charitable Contributions
Martin Feldstein and Lawrence B. Lindsey
Comment: Harvey Galper
6. Alternative Tax Rules and Personal Saving Incentives: Microeconomic Data and Behavioral Simulations
Martin Feldstein and Daniel R. Feenberg
Comment: Martin J. Bailey
7. Modeling Alternative Solutions to the Long-Run Social Security Funding Problem
Michael J. Boskin, Marcy Avrin, and Kenneth Cone
Comment: Henry Aaron
8. Tax Reform and Corporate Investment: A Microeconometric Simulation Study
Michael A. Salinger and Lawrence H. Summers
Comment: Robert J. Shiller
9. Issues in the Taxation of Foreign Source Income
Daniel J. Frisch
Comment: Thomas Horst
10. Domestic Tax Policy and the Foreign Sector: The Importance of Alternative Foreign Sector Formulations to Results from a General Equilibrium Tax Analysis Model
Lawrence H. Goulder, John B. Shoven, and John Whalley
Comment: David G. Hartman
11. A Reexamination of Tax Distortions in General Equilibrium Models
Don Fullerton and Roger H. Gordon
Comment: Charles E. McLure, Jr.
12. A General Equilibrium Model of Taxation with Endogenous Financial Behavior
Joel Slemrod
Comment: Peter Mieszkowski
13. National Savings, Economic Welfare, and the Structure of Taxation
Alan J. Auerbach and Laurence J. Kotlikoff
Comment: Joseph E. Stiglitz
List of Contributors
Author Index
Subject Index