Behavioral Simulation Methods in Tax Policy Analysis by Martin Feldstein

By Martin Feldstein

Those 13 papers and accompanying commentaries are the 1st culmination of an ongoing examine venture that has targeting constructing simulation types that comprise the behavioral responses of people and companies to substitute tax principles and charges and on increasing computational normal equilibrium types that study the long-run results of alterations at the financial system as a whole.The vital concentration of the undertaking has been at the microsimulation of person habit. therefore, this quantity comprises stories of person responses to an over relief in tax premiums and to adjustments within the optimum tax charges; a examine of different tax remedies of the family members; and stories of such particular elements of family habit as tax remedy of domestic possession, charitable contributions, and person saving habit. Microsimulation concepts also are used to estimate the consequences of different rules at the long-run monetary prestige of the social safeguard application and to ascertain the consequences of different tax principles on company funding and of foreign-source source of revenue on out of the country investment.The papers dedicated to the improvement of basic equilibrium simulation versions to incorporate an exam of the results of overseas alternate and capital flows, a research of the results of capital taxation that makes use of a closed financial system equilibrium version, and an exam of the impression of switching to an inflation-indexed tax procedure. within the volume's ultimate paper, a life-cycle version within which participants maximize lifetime application topic to a life-time funds constraint is used to simulate the consequences of tax principles on own mark downs.

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Manpower Research Monograph, no. 21. C. United States Department of Labor, Bureau of Labor Statistics. Various dates. Unpublished codebooks for Current Population Survey. Washington Post. 1979. Sintax. 26 July. Comment David A. Wise Feenberg and Rosen have presented an approach to simulating the effects that changes in the tax code would have on tax revenue and women’s labor supply. I say women’s labor supply because the authors assume in this paper that husbands are not affected by the changes they analyze.

The standard deduction was then 15% of adjusted gross income with a minimum of $1,300 and a maximum of $2,000. Because some of the tax code changes we study would affect the decision to itemize deductions, it is important that this decision be endogenous to the model. Hence we must make an estimate of deductible expenses incurred by nonitemizers. The purpose of this appendix is to explain how deductible expenses were imputed to nonitemized returns. Rather than use some extraneous data source, we have simply assumed that the distribution of deductible expenses follows a lognormal distribution (conditional on income) and that the parameters of this function may be inferred from the truncated sample.

Feenberg/Harvey S. Rosen 38 more effective at reducing tax rates, and the wage elasticity becomes more relevant. 4. However, it is striking that allowing for even a very mild behavioral response has significant effects on both tax revenues and hours of work. 52 ,220 ... 22 ... 577 x 10'' ... , and J. Turner. 1978. A new linear programming approach to microdata file merging. In United States Treasury Office of Tax Analysis, 1978 compendium of tax research, pp. 131-50. Bloch, F. 1973. The allocation of time to market and non-market work within a family unit.

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