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870 records from EconBiz based on author Name
1. A personalized VAT with capital transfers : a reform to protect low-income households in Mexico
abstractThe Value-Added Tax (VAT) is the most prevalent consumption tax globally, yet it is frequently deemed highly regressive. To address this, we propose a Personalized VAT (PVAT) devised in conjunction with a distributional policy. We aim to achieve three objectives: increase revenue collection, achieve progressivity, and disrupt the intergenerational dependency of low-income households. We use Mexico as a case study, showing that eliminating all special VAT regimes and standardizing the rate at 16% could contribute an additional 2.2% of GDP to fiscal revenues. However, such a reform could have severe negative welfare impacts on the poor. To tackle this dilemma, we propose several PVAT scenarios. Our results indicate that a PVAT could be fiscally neutral or even increase revenues by up to 0.83% of GDP, while benefiting the lowest-income households. Lastly, we analyze the general equilibrium effects of a PVAT and various distributional policies, including lump-sum and capital transfers. For this purpose, we employ an overlapping generations model calibrated for Mexico. Our simulations reveal welfare enhancing and output growth results through a PVAT policy that includes capital transfers, thereby presenting a viable strategy for breaking intergenerational dependency.
Kotlikoff, Laurence J.; LaGarda, Guillermo; Marin, Gabriel;2023
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability:
Link Link 2. Is Our Fiscal System Discouraging Marriage? A New Look at the Marriage Tax
abstractWe develop, apply, and test a new measure of the marriage tax - the reduction in future spending from getting married - using SCF and ACS data. Our measure incorporates all major and most minor U.S. tax and benefit programs. And it assumes clone marriage - marrying oneself - to ensure the living-standard loss from marrying is unaffected by spousal choice. Our calculated high and highly variable marriage taxes materially reduce the probability of marriage particularly for low-income females with children
Ilin, Elias; Kotlikoff, Laurence J.; Pitts, Melinda;2022
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
Citations: 1 (based on OpenCitations)
3. The Future of Global Economic Power
abstractWhich region(s) will come to dominate the world economy? This paper develops the Global Gaidar Model (GGM), a 17-region, 2-skills, 100-period OLG model, to address this and other questions. The model is carefully calibrated to 2017 UN demographic and IMF fiscal data. Productivity growth and its interaction with demographic change are the main drivers of future economic power. Fiscal conditions and automation matter are secondary factors. Our baseline simulations, which forecast productivity growth using each region's long-term record, predict China and India becoming the world's top two economic hegemons. GGM also predicts an evolving global savings glut, major reductions in world interest rates, substantial increases in tax rates in China and other regions due to population aging, and permanent differences in regional living standards. Our findings are, however, highly sensitive to productivity growth. If productivity growth continues at each region's very recent pace, India will account for one third of 2100 world output and China for over one fifth. The US output share will grow slightly. Under other scenarios, productivity growth in China and India dramatically slows; Sub Saharan Africa's sky rockets, leaving China's plus India's 2100 output share at only 16 percent and Africa's at an astounding 17 percent
Benzell, Seth G.; Kotlikoff, Laurence J.; Kazakova, Marija; LaGarda, Guillermo; Nesterova, Kristina; Ye, Victor Yifan; Zubarev, Andrej;2022
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
4. Can today's and tomorrow’s world uniformly gain from carbon taxation?
Kotlikoff, Laurence J.; Kubler, Felix; Polbin, Andrej; Scheidegger, Simon;2024
Type: Aufsatz in Zeitschrift; Article in journal;
Availability:
Link 5. Inflation's Impact on American Households
abstractThe post-COVID price surge has reignited interest in inflation's impact on American households. Even if anticipated and with full market adjustments, inflation affects households through its interaction with the fiscal system, which is the focus of this paper. Inflation affects households through its interaction with the fiscal. We run the 2019 Survey of Consumer Finances (SCF), assuming different inflation rates, through the Fiscal Analyzer (TFA) - a life cycle, consumption-smoothing tool incorporating all major federal and state fiscal programs. Before doing so, we adjust the SCF data to neutralize inflation's non-fiscal effects. A permanent increase in the inflation rate from zero to 10 percent reduces median lifetime spending by 6.82 percent. This impact is smaller - 4.74 percent - when fiscal COLAs aren't lagged. But the big stories are the progressivity of inflation's increase in net taxation, its age pattern, and its heterogeneity. The 15.9 percent median lifetime spending loss of the top 1 percent from 10 percent inflation is roughly 2.5 times that of the bottom quintile. Middle aged households are hit far harder because they have more asset income, which, with inflation, is taxed at a higher effective rate. The 25th percentile of spending changes is a reduction of 9.84 percent. The 75th percentile change is still a reduction of 4.83 percent. The maximum spending decline (increase) across all households is 64.9 (46.7) percent. Thus, the distribution of welfare is highly sensitive to significant, ongoing inflation
Altig, David; Auerbach, Alan J.; Eidschun, Erin F.; Kotlikoff, Laurence J.; Ye, Victor Yifan;2024
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
6. The Global Life-Cycle Optimizer – Analyzing Fiscal Policy's Potential to Dramatically Distort Labor Supply and Saving
abstractFiscal policy in the U.S. and other countries renders intertemporal budgets non-differentiable, nonconvex, and discontinuous. Consequently, assessing work and saving responses to policy requires global optimization. This paper develops the Global Life-Cycle Optimizer (GLO), a stochastic pattern-search algorithm. The GLO robustly, precisely, and quickly locates global optima in highly complex fiscal settings. We use the GLO to study how a stylized U.S. fiscal system distorts workers' labor supply and saving assuming standard preferences. The system incorporates kinks from federal personal income tax brackets, Social Security's FICA tax, and a notch from the provision of basic income below a threshold. The GLO reproduces theoretically predicted earnings bunching and flipping over a remarkably wide range of wage rates. Saving distortions can be equally dramatic. Associated excess burdens range from substantial to massive. Restricting labor supply to full-or part-time work can eliminate flipping when it's optimal and produce flipping when it's suboptimal. Joint filing can significantly reduce the earnings of lower-wage spouses relative to that of higher-wage spouses. The GLO can be applied to assess a country's or state's full set of work and saving disincentives. Consequently, it can facilitate analyses of structural labor supply and tax reform
Brumm, Johannes; Kotlikoff, Laurence J.; Krause, Christopher;2024
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
7. Can today's and tomorrow's world uniformly gain from carbon taxation?
Kotlikoff, Laurence J.; Kubler, Felix; Polbin, Andrej; Scheidegger, Simon;2021
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability:
Link 8. When Interest Rates Go Low, Should Public Debt Go High?
abstractIs deficit finance, explicit or implicit, free when borrowing rates are routinely lower than growth rates? Specifically, can the government make all generations better off by perpetually taking from the young and giving to the old? We study this question in simple closed and open economies and show that achieving Pareto gains requires implausible calibrations. Even then, the gains reflect, depending on the economy's openness, improved intergenerational risk-sharing, improved international risk-sharing, and beggaring thy neighbor - not intergenerational redistribution per se. Low government borrowing rates, including borrowing rates running far below growth rates, justify improved risk-sharing between generations and countries. They provide no convincing basis for using deficit finance to redistribute from young and future generations or other countries
Brumm, Johannes; Feng, Xiangyu; Kotlikoff, Laurence J.; Kubler, Felix;2021
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
Citations: 7 (based on OpenCitations)
9. Deficit Follies
abstractDeficit finance is free when the growth rate routinely exceeds the government's borrowing rate. Or so many people say. This note presents three counterexamples. Each features a simple OLG economy with a zero growth rate and a negative government borrowing rate. None provides a basis for taking from the young and giving to the old. One example features idiosyncratic risk, one features policy uncertainty, and one features a safe borrowing rate that exceeds the safe lending rate. Progressive taxation cures the first problem. Policy resolution cures the second. And improved intermediation, perhaps organized by the government, cures the third. The three models are parables. Each conveys an inconvenient truth. Seemingly free deficits may, on careful inspection, be far more costly than they appear. Indeed, government intergenerational redistribution can lower the government borrowing rate, encouraging yet more inefficient deficit finance
Brumm, Johannes; Feng, Xiangyu; Kotlikoff, Laurence J.; Kubler, Felix;2021
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
Citations: 1 (based on OpenCitations)
10. Simulating Endogenous Global Automation
abstractThis paper develops a 17-region, 3-skill group, overlapping generations, computable general equilibrium model to evaluate the global consequences of automation. Automation, modeled as capital- and high-skill biased technological change, is endogenous with regions adopting new technologies when profitable. Our approach captures and quantifies key macro implications of a range of foundational models of automation. In our baseline scenario, automation has a moderate effect on regional outputs and a small effect on world interest rates. However, it has a major impact on inequality, both wage inequality within regions and per capita GDP inequality across regions. We examine two policy responses to technological change -- mandating use of the advanced technology and providing universal basic income to share gains from automation. The former policy can raise a region's output, but at a welfare cost. The latter policy can transform automation into a win-win for all generations in a region
Benzell, Seth G.; Kotlikoff, Laurence J.; LaGarda, Guillermo; Ye, Victor Yifan;2021
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link
Citations: 2 (based on OpenCitations)
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