Chapter

Effective Tax Rates

Dale W. Jorgenson and Kun‐Young Yun

in Tax Reform and the Cost of Capital

Published in print August 1991 | ISBN: 9780198285939
Published online November 2003 | e-ISBN: 9780191596490 | DOI: http://dx.doi.org/10.1093/0198285930.003.0004

Series: The Lindahl Lectures

 Effective Tax Rates

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Alternative policy provisions are compared for capital income taxation and the social rates of return in terms of marginal effective tax rates, since, by measuring these for different assets, it is possible to quantify the sources of distortions in decisions involving the allocation of capital among different uses. Marginal effective tax rates for the USA are presented for capital income over the period 1947–86 for corporate and non-corporate businesses, and households. Differences in the effective tax rates under the 1986 Tax Reform Act (and the pre-existing 1985 Tax Law) are then considered, looking again at the same three categories, and also giving data on social wedges (differences in social rates of return) between the short- and long-lived assets. The last section of the chapter looks at alternative approaches.

Keywords: assets; capital income taxation; corporate businesses; corporate taxation; household taxation; households; marginal effective tax rates; non-corporate businesses; non-corporate taxation; rates of return; social rates of return; social wedges; tax policy; tax rates; tax wedges; US Tax Reform Act of 1986; US 1985 Tax Law; USA

Chapter.  16495 words. 

Subjects: Public Economics

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