税务英语文章阅读.docx

税务英语文章阅读.docx

《税务英语文章阅读.docx》由会员分享，可在线阅读，更多相关《税务英语文章阅读.docx（10页珍藏版）》请在冰豆网上搜索。

税务英语文章阅读

税务英语文章阅读——Laffercurve

Ineconomics,theLaffercurve（alsoKhaldun–Laffercurve）isarepresentationoftherelationshipbetweenpossibleratesoftaxationandtheresultinglevelsofgovernmentrevenue.Itillustratestheconceptoftaxableincomeelasticity—i.e., taxableincomewillchangeinresponsetochangesintherateoftaxation.Itpostulatesthatnotaxrevenuewillberaisedattheextremetaxratesof0%and100%andthattheremustbeatleastoneratewheretaxrevenuewouldbeanon-zeromaximum.

TheLaffercurveistypicallyrepresentedasagraphwhichstartsat0%taxwithzerorevenue,risestoamaximumrateofrevenueatanintermediaterateoftaxation,andthenfallsagaintozerorevenueata100%taxrate.Theactualexistenceandshapeofthecurveisuncertainanddisputed.

OnepotentialresultoftheLaffercurveisthatincreasingtaxratesbeyondacertainpointwillbecounter-productiveforraisingfurthertaxrevenue.AhypotheticalLaffercurveforanygiveneconomycanonlybeestimatedandsuchestimatesarecontroversial.TheNewPalgraveDictionaryofEconomicsreportsthatestimatesofrevenue-maximizingtaxrateshavevariedwidely,withamid-rangeofaround70%.

AlthougheconomistArthurLafferdoesnotclaimtohaveinventedtheLaffercurveconcept,itwaspopularizedwithpolicymakersfollowinganafternoonmeetingwithFordAdministrationofficialsDickCheneyandDonaldRumsfeldin1974inwhichhereportedlysketchedthecurveonanapkintoillustratehisargument.Theterm"Laffercurve"wascoinedbyJudeWanniski,whowasalsopresentatthemeeting.Thebasicconceptwasnotnew;LafferhimselfnotesantecedentsinthewritingsofIbnKhaldunandJohnMaynardKeynes.

Laffercurve:

t*representstherateoftaxationatwhichmaximalrevenueisgenerated.ThisisthecurveasdrawnbyArthurLaffer,however,thecurveneednotbesinglepeakednorsymmetricalat50%.

Lafferexplainsthemodelintermsoftwointeractingeffectsoftaxation:

an"arithmeticeffect"andan"economiceffect".The"arithmeticeffect"assumesthattaxrevenueraisedisthetaxratemultipliedbytherevenueavailablefortaxation（ortaxbase）.Ata0%taxrate,themodelassumesthatnotaxrevenueisraised.The"economiceffect"assumesthatthetaxratewillhaveanimpactonthetaxbaseitself.Attheextremeofa100%taxrate,thegovernmenttheoreticallycollectszerorevenuebecausetaxpayerschangetheirbehaviorinresponsetothetaxrate:

eithertheyhavenoincentivetoworkortheyfindawaytoavoidpayingtaxes.Thus,the"economiceffect"ofa100%taxrateistodecreasethetaxbasetozero.Ifthisisthecase,thensomewherebetween0%and100%liesataxratethatwillmaximizerevenue.Graphicalrepresentationsofthecurvesometimesappeartoputtherateataround50%,buttheoptimalratecouldtheoreticallybeanypercentagegreaterthan0%andlessthan100%.Similarly,thecurveisoftenpresentedasaparabolicshape,butthereisnoreasonthatthisisnecessarilythecase.

JudeWanniskinotedthatalleconomicactivitywouldbeunlikelytoceaseat100%taxation,butwouldswitchfromtheexchangeofmoneytobarter.Healsonotedthattherecanbespecialcircumstanceswhereeconomicactivitycancontinueforaperiodatanear100%taxationrate（forexample,inwartime）.

Variouseffortshavebeenmadetoquantifytherelationshipbetweentaxrevenueandtaxrates（forexample,intheUnitedStatesbytheCongressionalBudgetOffice）.Whiletheinteractionbetweentaxratesandtaxrevenueisgenerallyaccepted,theprecisenatureofthisinteractionisdebated.Inpractice,theshapeofahypotheticalLaffercurveforagiveneconomycanonlybeestimated.Therelationshipbetweentaxrateandtaxrevenueislikelytovaryfromoneeconomytoanotheranddependsontheelasticityofsupplyforlaborandvariousotherfactors.Eveninthesameeconomy,thecharacteristicsofthecurvecouldvaryovertime.Complexitiessuchasprogressivetaxationandpossibledifferencesintheincentivetoworkfordifferentincomegroupscomplicatethetaskofestimation.Thestructureofthecurvemayalsobechangedbypolicydecisions.Forexample,iftaxloopholesandoff-shoretaxsheltersaremademorereadilyavailablebylegislation,thepointatwhichrevenuebeginstodecreasewithincreasedtaxationislikelytobecomelower.

Lafferpresentedthecurveasapedagogicaldevicetoshowthat,insomecircumstances,areductionintaxrateswillactuallyincreasegovernmentrevenueandnotneedtobeoffsetbydecreasedgovernmentspendingorincreasedborrowing.Forareductionintaxratestoincreaserevenue,thecurrenttaxratewouldneedtobehigherthantherevenuemaximizingrate.In2007,Laffersaidthatthecurveshouldnotbethesolebasisforraisingorloweringtaxes.

Problems

Lafferassumesthatthegovernmentwouldcollectnoincometaxata100%taxratebecausetherewouldbenoincentivetoearnincome.ResearchhasdevelopedtheoreticalmathematicalmodelsinwhichaLaffercurvecanslopecontinuouslyupwardsallthewayto100%,thoughitisnotclearwhetherorwhentheassumptionsonwhichsuchmathematicalmodelsarebasedholdinrealeconomies.Additionally,theLaffercurvedependsontheassumptionthattaxrevenueisusedtoprovideapublicgoodthatisseparableinutilityandseparatefromlaborsupply,whichmaynotbetrueinpractice.TheLaffercurveaspresentedisalsosimplisticinthatitassumesasingletaxrateandasinglelaborsupply.Actualsystemsofpublicfinancearemorecomplex.Thereisseriousdoubtabouttherelevanceofconsideringasinglemarginaltaxrate.Inaddition,revenuemaywellbeamultivaluedfunctionoftaxrate-forinstance,anincreaseintaxratetoacertainpercentagemaynotresultinthesamerevenueasadecreaseintaxratetothesamepercentage（akindofhysteresis）.

Empiricaldata

Taxrateatwhichrevenueismaximized

Apossiblenon-symmetricLafferCurvewithamaximumrevenuepointatarounda70%taxrate,basedon"HowFarAreWeFromTheSlipperySlope?

TheLafferCurveRevisited"byMathiasTrabandtandHaraldUhlig.

TheNewPalgraveDictionaryofEconomicsreportsthatacomparisonofacademicstudiesyieldsarangeofrevenuemaximizingratesthatcentersaround70%.EconomistPaulPecorinopresentedamodelin1995thatpredictedthepeakoftheLaffercurveoccurredattaxratesaround65%.A1996studybyY.HsingoftheUnitedStateseconomybetween1959and1991placedtherevenue-maximizingaveragefederaltaxratebetween32.67%and35.21%.A1981paperpublishedintheJournalofPoliticalEconomypresentedamodelintegratingempiricaldatathatindicatedthatthepointofmaximumtaxrevenueinSwedeninthe1970swouldhavebeen70%.ApaperbyTrabandtandUhligoftheNBERfrom2009presentedamodelthatpredictedthattheUSandmostEuropeaneconomieswereontheleftoftheLaffercurve（inotherwords,thatraisingtaxeswouldraisefurtherrevenue）.

CongressionalBudgetOfficeanalysis

In2005,theCongressionalBudgetOffice（CBO）releasedapapercalled"AnalyzingtheEconomicandBudgetaryEffectsofa10PercentCutinIncomeTaxRates".Thispaperconsideredtheimpactofastylizedreductionof10%inthethenexistingmarginalrateoffederalincometaxintheUS（forexample,ifthosefacinga25%marginalfederalincometaxratehaditloweredto22.5%）.Unlikeearlierresearch,theCBOpaperestimatesthebudgetaryimpactofpossiblemacroeconomiceffectsoftaxpolicies,thatis,itattemptstoaccountforhowreductionsinindividualincometaxratesmightaffecttheoverallfuturegrowthoftheeconomy,andthereforeinfluencefuturegovernmenttaxrevenues;andultimately,impactdeficitsorsurpluses.Inthepaper'smostgenerousestimatedgrowthscenario,only28%oftheprojectedlostrevenuefromthelowertaxratewouldberecoupedovera10-yearperiodaftera10%across-the-boardreductioninallindividualincometaxrates.Inotherwords,deficitswouldincreasebynearlythesameamountasthetaxcutinthefirstfiveyears,withlimitedfeedbackrevenuethereafter.Throughincreasedbudgetdeficits,thetaxcutsprimarilybenefitingthewealthywillbepaidfor—plusinterest—bytaxesbornerelativelyevenlybyalltaxpayers.Thepaperpointsoutthattheseprojectedshortfallsinrevenuewouldhavetobemadeupbyfederalborrowing:

thepaperestimatesthatthefederalgovernmentwouldpayanextra$200billionininterestoverthedecadecoveredbythepaper'sanalysis.

Other

LafferhaspresentedtheexamplesofRussiaandtheBalticstates,whichinstitutedaflattaxwithrateslowerthan35%andwhoseeconomiesstartedgrowingsoonafterimplementation.HehassimilarlyreferredtotheeconomicoutcomeoftheKemp-Rothtaxact,theKennedytaxcuts,the1920staxcuts,andthechangesinUScapitalgainstaxstructurein1997.SomehavealsocitedHauser'sLaw,whichpostulatesthatUSfederalrevenues,asapercentageofGDP,haveremainedstableatapproximately19.5%overtheperiod1950to2007despitechangesinmarginaltaxratesoverthesameperiod.Othershowever,havecalledHauser'sLaw"misleading"andcontendthattaxchangeshavehadlargeeffectsontaxrevenues.

Optimaltaxation

OneoftheusesoftheLaffercurveisindeterminingtherateoftaxationwhichwillraisethemaximumrevenue（inotherwords,"optimizing"revenuecollection）.However,therevenuemaximizingrateshouldnotbeconfusedwiththeoptimaltaxrate,whicheconomistsusetodescribeataxwhichraisesagivenamountofrevenuewiththeleastdistortionstotheeconomy.

Relationshipwithsupply-sideeconomics

Supply-sideeconomicsisaschoolofmacroeconomicthoughtthatargues