Creator: Stutzer, Michael J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 345 Stichwort: Business tax, Rental tax, Tax policy, Property tax, Income tax, Tax distribution, Tax systems, and Tax burden Fach: H20 - Taxation, Subsidies, and Revenue: General and H71 - State and Local Taxation, Subsidies, and Revenue
Creator: Prescott, Edward C. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 692 Abstract:
A problem facing the United States and many other countries is how to finance retirement consumption as the number of their workers per retiree falls. The problem with a savings for retirement systems is that there is a shortage of good savings opportunities given the nature of most current tax systems and governments’ limited ability to honor the debt it issues. We find that eliminating capital income taxes will greatly increase saving opportunities and make a savings-for-retirement system feasible with only modest amount of government debt. The switch from a system close to the current U.S. retirement system, which relies heavily on taxing workers’ incomes and making lump-sum transfers to retirees, to one without income taxes will increase the welfare of all birth-year cohorts alive today and particularly the welfare of the yet unborn cohorts. The equilibrium paths for the current and alternative policies are computed.
Stichwort: Quantitative OLG, Government debt, Efficient taxation, and Tax systems Fach: H61 - National Budget; Budget Systems, E20 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data), G18 - General Financial Markets: Government Policy and Regulation, H21 - Taxation and Subsidies: Efficiency; Optimal Taxation, and G00 - Financial Economics: General