财政学课件15

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Whether 2 Items included in H-S have Income 2.2 Unconventional items problems?
Employer pension contributions and insurance purchases. Transfer payments including Social Security Retirement Benefits, Unemployment Insurances, and Welfare. Capital Gains (whether they are realized or unrealized) Income in-kind in the form of goods and services rather than cash. 14
A dilemma choice between tax equity and tax efficiency
Different choices of tax types and tax system of different countries.
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Riview
Optimal Commodity Taxation All goods can be taxed: Taxes could be raised without any excess burden at all. Not all goods can be taxed: Minimizing excess burden requires that taxes be set so that the (compensated) demands for all commodities are reduced in the same proportion. For unrelated goods, this implies that tax rates should be set in verse proportion to the 3 demand elasticities.
§3 Excludable Forms of Income
Interest on State and Local Bonds
州和地方债券的利息 Some Dividends股息 Capital Gains资本利得
Employer Contributions雇主向福利计划的缴款 Some types of Saving储蓄
Why?
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§2 Defining Income
1 Definition of income
1.1 Haig-Simons definition of income
Income is the money value of the net increase in an individual’s power to consumer during a period.
Which forms of income could be taxed?
Wages and salaries, rents, dividends, and so on …
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1.2 H-S criterion黑格西蒙斯标准 黑格西蒙斯标准:
Includes net additions to wealth All sources of potential increases in consumption (regardless of whether consumption took place) Subtracts losses: Any decrease in an individual’s potential to consume
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Figure 15.1 Computation of federal personal income tax liability
Basic Structure
Later in this lesson, will discuss extensively the “real-life” aspects of the U.S. tax code. Before doing that, useful to think about what the tax code “should” look like. Synthetic income tax system. However, classified income tax system in China.
4 Evaluating the H-S Criterion
Clearly, arbitrary decisions need to be made on how to define income from a practical point of view. Why is the H-S criterion so attractive?
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Introduction
Definition
The personal income tax is refered as a tax levied due to individual’s alternative taxable income.
Current position
Personal income tax 46% of Federal taxes collections in 2002. State & local taxes Less reliance now on property tax, more on income tax(about 10%). In China, the personal income tax is 318.6billion, proportion to total tax revenue is 7% in 2007. 7
Economic efficiency principle Tax system principle
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Riview
Equity and efficiency of taxation
The taxation should make equity primarily The taxation must consider the request of efficiency
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2 Items included in H-S Income
2.1 Ordinary items
Include wages, salaries, royalties特许权使用费, business profits经营利润, rents, dividends股息, and interest利息.
§1 Basic Structure
Figure 15.1 shows the series of steps used to compute a person’s tax liability.
Step 1: Compute Adjusted Gross Income (AGI 调整后毛所得) Step 2: Convert AGI into taxable income（应税 所得额 ）by subtracting exemptions and deductions（免税额和扣除） 免税额和扣除） Step 3: Compute tax liability(应纳税额）by 应纳税额） applying a rate schedule税率表, and subtracting tax credits（税收抵免） 税收抵免）
Riview
Optimal User Fees Average cost pricing Marginal cost pricing with Lump Sum Taxes A Ramsey Solution Optimal Income Taxation The income marginal tax rates should be modest(less than 100%) Ther optimal income rate should be inverted “U”
The idea behind taxing dividends at a lower rate for individuals is to ameliorate the double taxation to some extent.
There are two reasons: Horizontal equity – People with equal incomes should pay equal taxes. Neutrality – It treats all forms of income the same, and does not distort economic activity. 16
2 Excludable Forms of Income: Some Dividends
Dividends are taxed at preferential rates
In 2003, legislation was passed which lowered the maximal tax rate on dividends to 15%. Previously, it was taxed as ordinary income.
Riview
Taxation principle
Equity taxation principle
Benefit-received principle Ability-to-pay principle Opportunity principle
Efficiency taxation principle
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Chapter 15Fra bibliotekThe Personal Income Tax
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Main content
Basic Structure Defining Income Excludable Forms of Income Exemptions, Deductions, and Credits Rate Structure AMT:Alternative Minimum Tax