Public Stock Ownership by Giacomo Corneo :: SSRN

February 23, 2019

The government of a country with a good financial reputation could borrow from the international capital market and use the proceeds to endow a sovereign wealth fund that mainly invests in the world stock market. In expectation, this country would gain the equity risk premium multiplied by the size of the fund. This gain could be earmarked to a social dividend. This paper deals with the conditions under which such a policy is welfare‐improving, discusses the optimal size of such a fund, and proposes an institutional framework for the management of public stock ownership.

Source: Public Stock Ownership by Giacomo Corneo :: SSRN

Financing Uterus Transplants: The United States Context by Valarie Blake :: SSRN

October 19, 2018

The first baby has successfully been born by uterus transplantation (UTx) in the United States and the procedure is swiftly becoming a viable clinical option for patients with uterine factor infertility (UFI). This raises a practical ethical question: should health insurers finance UTx and what issues should they consider in coming to this decision? The article lays forth some of the factors that shape the decision over whether to finance UTx in the United States, including what procedures must be covered, whether UTx is more like organ transplantation or infertility treatment (which are treated differently in the United States), and the benefits and alternatives of the procedure. Then, the article explores arguments around why UTx should be financed, or at least considered along with other important medical needs. The paper argues that UTx ought to be considered along with other competing claims for healthcare services. In countries that generously cover other infertility services, it may logically follow that medical services that enable gestation should be insured when the healthcare system covers services to conceive. In the United States, however, many groups have long suffered inadequate access to medical care, in the context of infertility and more broadly. U.S. healthcare may need to be made more widely equitable, before covering UTx is seen as financially or politically possible.

via Financing Uterus Transplants: The United States Context by Valarie Blake :: SSRN

Measuring and Modeling Intergenerational Links in Relation to Long‐Term Care

January 10, 2018

Long‐term care has profound intergenerational implications. It can be costly for those who need it and onerous for loved ones who provide it. We pinpoint three intergenerational aspects of long‐term care that require further research. One concerns the link between costs of private care and intergenerational wealth transfers. The second concerns the link between participation in care and the work and welfare of family providers. The third relates to intergenerational tensions that these and other late‐in‐life interactions create. We outline innovations in modeling and measurement that would improve understanding of intergenerational linkages and their implementation in appropriate panel data.

via Measuring and Modeling Intergenerational Links in Relation to Long‐Term Care by Andrew Caplin, Kathleen McGarry, Mi Luo :: SSRN

Easy on the SALT: A Qualified Defense of the Deduction for State and Local Taxes

December 20, 2017

Congressional Republicans and Trump administration officials have said that they plan to repeal the deduction for nonbusiness state and local taxes (SALT) as part of a comprehensive tax reform package. This essay critically examines the major arguments for repealing the SALT deduction. Repealing the deduction and using the resulting revenues to reduce federal rates across the board would likely lead to greater tax-induced deadweight loss overall. Repealing the deduction also would distort decisions about the financing of education and health care, which together account for more than half of all state and local government spending. Repeal would further encourage a shift from nonbusiness to business taxes at the state and local level, and potentially would result in more borrowing by subnational governments in the short and medium term. It would have ambiguous effects on the progressivity of the overall tax system, and it would exacerbate existing differences in federal tax burdens across states. The essay concludes that the case against the SALT deduction fails on its own terms, and that the status quo of partial deductibility offers a number of underappreciated advantages vis-à-vis the alternative of full repeal.

via Easy on the SALT: A Qualified Defense of the Deduction for State and Local Taxes by Daniel Hemel :: SSRN

Soda Taxes as a Legal and Social Movement

December 12, 2017

In the last few years, several local governments have adopted new soda taxes. Other localities currently are considering adopting such a tax. In this Article, we consider whether soda taxes are becoming a more common local policy throughout the country — like local smoking restrictions — or whether, instead, they will remain a limited legal phenomenon. We focus on two potential obstacles to the widespread adoption of local soda taxes: (1) policy-based objections to the taxes as regressive and unduly paternalistic, which could undermine political support for their adoption at the local level; and (2) state preemption of local taxes, often achieved at the behest of the beverage industry. As we explain later, the principal risk of preemption vis-à-vis soda taxes does not come from the state courts in the form of decisions finding implied or field preemption, but rather from state statutes that expressly, unequivocally preempt such taxes. In almost all states, such express preemption would be considered lawful by the courts and would be effective in depriving localities of the power to impose taxes on soda.

via Soda Taxes as a Legal and Social Movement by David Dana, Janice Nadler :: SSRN

Optimal Family Taxation and Income Inequality by Patricia F. Apps, Ray Rees :: SSRN

February 12, 2017

This paper presents the properties of optimal piecewise linear income tax systems for families based on joint and individual incomes respectively. It models the interaction between the wage rates of mothers as “second earners” and variation in child care prices and productivities as determinants of across-household heterogeneity in second earner labour supply. We find that individual taxation welfare dominates joint taxation not only on the well-known grounds of efficiency but also of equity. An important driver of this result is the sharp rise in wage rates in the top percentiles of the primary wage distribution. In addition to reducing the intra-household net-of-tax wage gap, individual taxation removes the opportunity for tax avoidance income splitting makes available to high wage primary earners, leading to a much fairer distribution of the tax burden.

Source: Optimal Family Taxation and Income Inequality by Patricia F. Apps, Ray Rees :: SSRN

Public Finance in a Nutshell: A Cobb Douglas Teaching Tool for General Equilibrium Tax Incidence and Excess Burden by Don Fullerton, Chi Ta :: SSRN

February 7, 2017

To help first- or second-year graduate students in economics apply their theoretical training, this paper shows how to solve a simple and intuitive computable general equilibrium (CGE) model using a calculator. Because this simplified Harberger model uses Cobb Douglas functional forms for utility and production, one can solve for all input and output prices and quantities with no taxes and then solve for exact measures of output with a large tax change (not using derivatives). We then show how to solve simultaneously for capital and labor prices (incidence on the sources side of income), for both output prices (incidence on the uses side), for exact measures of overall welfare loss such as the equivalent variation, for excess burden and marginal excess burden, and for the effects on revenue in the form of a Laffer Curve.

Source: Public Finance in a Nutshell: A Cobb Douglas Teaching Tool for General Equilibrium Tax Incidence and Excess Burden by Don Fullerton, Chi Ta :: SSRN