期刊-NBER美国国民经济研究局-Fall1992_48页_1mb

MBER Reporter Summary - Fall 1992

Core Content

The NBER Program in Public Economics (formerly the Program in Taxation) focuses on both tax and expenditure policies, examining their effects on individual and firm behavior, as well as their role in international economies and environmental protection. The report outlines recent research contributions from the program, highlighting key areas of study and their implications for policy design.

Main Research Areas

Taxation and Household/Firm Behavior

• Impact of Tax Policies: Studies show that declining marginal tax rates have shifted compensation away from fringe benefits toward taxable wages.
• Welfare Programs: High implicit marginal tax rates in welfare programs reduce labor supply among potential beneficiaries.
• Social Security: The payroll tax and benefit formulas significantly affect the total marginal tax rate on labor income.
• Capital Gains Taxation: Research explores the elasticity of capital gains realization with respect to tax rates and the long-term effects of tax changes. Studies also examine the design of realization-based taxes to avoid distorting incentives.
• Corporate Investment: Changes in tax policies, especially post-1986 reforms, have influenced corporate investment decisions. Tax-related changes in incentives for different types of assets are reflected in observed investment levels.
• Incorporation Decisions: The 1986 Tax Reform Act led to a reduction in incentives to incorporate, explaining the rapid growth of Subchapter S corporations.
• Tax Policy and Firm Behavior: NBER researchers continue to develop the theory of corporate investment and financial policy, supporting further empirical studies.

Tax Policy in an International Economy

• Global Capital Markets: The integration of world capital markets and the ability of firms to transfer profits across borders has created new challenges for tax policy.
• Corporate R&D Spending: Tax incentives affect R&D investment, with a 1% increase in after-tax R&D costs leading to more than a 1% decrease in outlays.
• Dividend Repatriation: Tax changes in the mid-1980s influenced the behavior of U.S. multinational corporations regarding dividend repatriation and foreign direct investment.
• Tax Differentials: Differences in tax rates between the U.S. and other nations affect the location of business activity and profit allocation within multinational firms.
• International Taxation Project: This ongoing NBER project investigates the implications of international tax policies for both the U.S. and other countries.

Tax Policy and the Environment

• Green Taxes: The design of environmental tax policies, such as carbon taxes, is gaining attention due to the need for revenue and environmental protection.
• Carbon Tax: A carbon tax targets fossil fuels, with varying rates based on their environmental impact. It has been studied for its efficiency and distributional effects.
• Excise Taxes on Fossil Fuels: Research suggests that gasoline taxes are less regressive when viewed in a life-cycle framework.
• Pollution Abatement: Tax policies can be used to encourage investments in pollution control technologies. The residential energy credit, for example, had limited effects due to consumer uncertainty about energy prices.

Social Insurance

• Growing Expenditure: Social insurance programs like Social Security and Medicare are the fastest-growing public expenditure items in the U.S.
• Generational Accounts: These are used to assess the impact of policy reforms on different generations.
• Mandated Insurance: Studies show that when states mandate workers' compensation insurance, wages fall by about 75% of the cost of the insurance.
• Tax Subsidies and Casualty Losses: The interaction between tax subsidies for insurance and the treatment of casualty losses is an area of ongoing research.

State and Local Public Finance

• Devolution of Responsibilities: Federal fiscal pressures have led to a shift in responsibilities to state and local governments.
• Tax-Exempt Bond Market: Research includes the subsidy effects of tax-exempt municipal bonds, ownership patterns, and the role of federal taxation in their supply.
• State Tax Structure: Studies examine the effects of federal deductibility on state tax choices and the interaction between state and federal tax policies.
• Enterprise Zones: Research explores the impact of these zones on economic activity and local development.

Other Research Areas

• Optimal Income Taxation: Theoretical work on the design of optimal tax structures.
• Implicit Taxes: Analysis of how college scholarship rules create implicit taxes on households.
• Charitable Giving and Art Museums: Inquiry into the effect of tax policy on charitable contributions and the art sector.
• Inheritance and Work Behavior: A study confirms Andrew Carnegie's conjecture that inherited wealth is associated with reduced work effort.

Government Service

NBER researchers are often involved in policy advisory roles. Notable current and former members include:

• Michael J. Boskin: Chairman of the Council of Economic Advisers (CEA)
• David F. Bradford: Former Director of the NBER's taxation program, now at the CEA
• Andrew B. Lyon: Faculty Research Fellow on leave at the CEA
• Alan J. Auerbach: Chief Economist of the Joint Tax Committee
• R. Glenn Hubbard: Deputy Assistant Secretary of Tax Policy at the Treasury Department
• Lawrence H. Summers: Chief Economist of the World Bank
• Lawrence B. Lindsey: Former program member, now on the Federal Reserve Board of Governors

Research Summaries

Inflation Dynamics

• Inflation and Output: Reducing inflation often comes at the cost of reduced output, and fears of recession have prevented the Fed from pursuing zero inflation.
• Disinflation Costs: Classical economics suggests money is neutral, but historical evidence shows disinflation often causes recessions. This is attributed to slow wage and price adjustments, creating output loss.
• New Keynesian View: Staggered price adjustments create inflation inertia. However, the paper argues that this is not the main cause of high disinflation costs.
• Rational Expectations: If policymakers have imperfect credibility, negative monetary surprises may not be balanced by positive ones, leading to persistent output effects.
• Game-Theoretic Model: Inflation expectations are influenced by policymakers' aversion to inflation. A low-inflation regime can be disrupted by supply shocks, leading to higher inflation expectations and, consequently, higher actual inflation.

The Genesis of Inflation

• Supply Shocks: High inflation can result from adverse supply shocks, such as oil price increases.
• Policy Response: Policymakers may allow inflation to rise to avoid recession, as maintaining low inflation requires anti-accommodative monetary policy, leading to higher unemployment.
• Expectation Formation: The public's expectations about inflation are shaped by policymakers' preferences. High inflation expectations can become self-fulfilling.

The Level and Variability of Inflation

• Uncertainty and Inflation: Higher inflation levels are associated with greater uncertainty about future inflation.
• Policy Consensus: The relationship between inflation and uncertainty depends on the degree of policy consensus. High inflation creates uncertainty, as policymakers may not agree on the best way to reduce it.
• Empirical Evidence: While short-term uncertainty is not strongly linked to high inflation, long-term uncertainty is closely related to the current inflation level.

Key Information

• The NBER Program in Public Economics has broadened its scope to include both taxation and expenditure policies.
• Research focuses on the behavioral effects of tax policy, international taxation, environmental taxes, and social insurance.
• The report highlights the importance of understanding how tax policy influences investment, corporate behavior, and labor supply.
• It also discusses the role of tax policy in shaping state and local fiscal decisions and the implications of global economic integration.
• Notable contributions include the development of generational accounts, analysis of capital gains taxation, and studies on the impact of oil shocks on inflation.