Essays in Macroeconomics and Public Finance.

Fiscal Capacity;Consumption Commitments;Charitable Tax Deduction;Economics;Business;Economics

Gillitzer, Christian P. A.Hines, Jr James ;

University of Michigan

关键词: Fiscal Capacity;    Consumption Commitments;    Charitable Tax Deduction;    Economics;    Business;    Economics;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/102360/cgillitz_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

This dissertation contains three chapters at the intersection of macroeconomics and public finance. The first chapter demonstrates that deep recessions can stimulate investment in state fiscal capacity. Large negative income shocks endanger the revenue-raising capability of existing narrow tax bases, particularly when the ability to borrow is limited, making an increase in fiscal capacity desirable relative to its implementation cost. An increase in fiscal capacity enables a given amount of revenue to be raised by taxing a wider range of economic activity at lower tax rates, which reduces the efficiency cost of taxation. Evidence from U.S. state governments during the Great Depression supports the model;;s predictions: governments in states experiencing larger than average negative income shocks were significantly more likely to adopt a retail sales tax (and income taxes) than were governments in states experiencing smaller than average income shocks, and state governments entering the Great Depression with a high level of debt were more likely to adopt new tax bases than those with low levels of debt. The second chapter proposes a model of consumption commitments - costly adjustment of spending for some goods - that can be easily incorporated into an otherwise standard representative agent DSGE model. The model explains several features of aggregate consumption data: (i) excess smoothness and excess sensitivity; (ii) hump-shaped dynamics; (iii) attenuated response to transitory real interest rate changes; and (iv) some aspects of the equity-premium puzzle. The model provides a microfoundation for reference dependent consumption. The third chapter, co-authored with Peer Skov, uses a reform in Denmark affecting reporting of charitable tax deductions to shed light on taxpayer behavior. We find that the introduction of information reporting and pre-population of charitable tax deductions in 2008 coincided with a doubling in the number of deductions claimed, and attribute this change to incomplete claiming of eligible deductions under the prior self-reporting regime. We estimate the per-year average amount of forgone tax benefits to be small, but find that many taxpayers repeatedly failed to claim eligible charitable tax deductions under the self-reporting regime.