Research Library

Since the progressivity of the sales tax is difficult to directly measure, this paper introduces an indirect approach combining simulated household income with realizations of consumption behavior from survey data.  

This issue brief presents the results of a dynamic model similar in nature to the macroeconomic models used by the Congressional Budget Office and Joint Committee on Taxation in evaluating the Tax Cuts and Jobs Act of 2017. The model shows a modest decline in wealth inequality due to the corporate tax cuts in the TCJA.

This study uses a dynamic equilibrium model to project the long-term economic impact of the corporate tax cuts.

Many argue that sales and excise taxes are regressive based on the strict relationship between annual income and taxes paid, but the burden of higher sales taxes may actually fall more heavily on households with higher lifetime incomes.

In an economy with heterogeneous firms and heterogeneous consumers, the authors describe a general equilibrium where firm equity is priced by a supply and demand process. With a model robust to arbitrary, nonlinear tax functions, they investigate the efficiency of replacing the current U.S. tax regime with a policy of no corporate taxes and taxation of capital distributions to the household at progressive personal income tax rates.