Found 16 article(s) for author 'Taxes'

Three (almost) inexplicable parts of the Republican tax plan

Three (almost) inexplicable parts of the Republican tax plan. Lawrence Summers, November 5, 2017, Opinion, “With the release of the Republican tax proposal, the most important tax debate in a generation is in full swing. Most reasonable experts agree that tax reform has the potential to spur investment and raise wages while also simplifying the system and increasing its fairness and legitimacy. The right question for debate is not the desirability of tax reform or even of business tax reform directed at spurring investment. It is the likely economic effect of particular proposals.Link

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The Business Roundtable’s outlandish tax cut claims

The Business Roundtable’s outlandish tax cut claims. Lawrence Summers, October 23, 2017, Opinion, “I think of myself as pro-business. I frequently counseled the Obama administration that “business confidence is the cheapest form of stimulus,” and during my times in government have found meetings with business leaders very helpful in understanding economic policy challenges. So when the Business Roundtable (BRT) does an analysis, I pay close attention.Link

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One last time on who benefits from corporate tax cuts

One last time on who benefits from corporate tax cuts. Lawrence Summers, October 22, 2017, Opinion, “I recently asserted that Kevin Hassett deserved a failing grade for his “analysis” projecting that the Trump administration proposal to reduce the corporate tax rate from 35 to 20 percent would raise the wages of an average American family between $4,000 to $9,000. I chose harsh language because Hassett had, for what seemed like political reasons, impugned the integrity of people like Len Burman and Gene Steuerle who have devoted their lives to honest rigorous evaluation of tax measures by calling their work “scientifically indefensible” and “fiction.” Since there have been a variety of comments on the economics of corporate tax reduction, some further discussion seems warranted.Link

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Trump’s top economist’s tax analysis isn’t just wrong, it’s dishonest

Trump’s top economist’s tax analysis isn’t just wrong, it’s dishonest. Lawrence Summers, October 17, 2017, Opinion, “Kevin Hassett, the White House’s chief economist, accused me of an ad-hominem attack against his analysis of the Trump administration’s tax plan. I am proudly guilty of asserting that it is some combination of dishonest, incompetent and absurd. Television does not provide space to spell out the reasons why, so I am happy to provide them here.Link

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Directions for International Tax Reform:, Hearing Before the U.S. Senate Committee on Finance, Hearing on International Tax Reform

Directions for International Tax Reform:, Hearing Before the U.S. Senate Committee on Finance, Hearing on International Tax Reform. Stephen Shay, October 3, 2017, Paper, “Testimony before the U.S. Senate Committee on Finance Hearing on International Tax Reform, October 3, 2017. Objectives for Tax Reform. Tax reform should maintain or enhance our tax system’s current level of progressivity in distributing tax burdens and benefits. The most significant social welfare fact today is that the income of middle and lower income workers has stagnated in recent decades and a disproportionate share of income growth has accrued to those with highest incomes—the top 1%. While we have recovered from the recession and middle and lower income workers have made some gains, the disparity between high-income and middle- and lower-income has grown substantially and income mobility is more constrained than for prior generations. The taxation of cross-border income of U.S. MNCs should be analyzed under the same fairness standards that apply to any other income.Link

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Cohn is Getting it all Wrong on Taxes

Cohn is Getting it all Wrong on Taxes. Lawrence Summers, September 5, 2017, Opinion, “Given recent controversies, I was interested to read National Economic Council Director Gary Cohn’s answer to a “why are you staying?” question put by Stuart Varney of the Fox Business Network last week. To his credit Cohn did not back away from his reservations about the president’s response to the Charlottesville violence. He said “Look, tax cuts are really important to me. I think it’s a once-in-a-lifetime opportunity. We haven’t done tax cuts in 31 years. So, to be a part of an administration that gets something done that hasn’t been done for 31 years is enormously challenging, enormously interesting to me.” Link

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Company Stock Price Reactions to the 2016 Election Shock: Trump, Taxes, and Trade

Company Stock Price Reactions to the 2016 Election Shock: Trump, Taxes, and Trade. Richard Zeckhauser, August 17, 2017, Paper, “Donald Trump’s surprise election shifted expectations: corporate taxes would be lower and trade policies more restrictive. Relative stock prices responded appropriately. High-tax firms and those with large deferred tax liabilities (DTLs) gained; those with significant deferred tax assets from net operating loss carryforwards (NOL DTAs) lost. Domestically focused companies fared better than internationally oriented firms. A price contribution analysis shows that easily assessed consequences (DTLs, NOL DTAs, tax rates) were priced faster than more complex issues (net DTLs, foreign exposure). In sum, the analysis demonstrates that expectations about tax rates greatly impact firm values.Link

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The Effects of Fiscal Consolidations: Theory and Evidence

The Effects of Fiscal Consolidations: Theory and Evidence. Alberto Alesina, May 2017, Paper, “We investigate the macroeconomic effects of fiscal consolidations based upon government spending cuts, transfers cuts and tax hikes. We extend a narrative dataset of fiscal consolidations, finding details on over 3500 measures. Government spending and transfer cuts reduce output by less than tax hikes. Standard New Keynesian models match our results when fiscal shocks are persistent. Wealth effects on aggregate demand mitigates the impact of a persistent spending cut. Static distortions caused by persistent tax hikes cause larger shifts in aggregate supply under sticky prices. This channel explains different sizes of multipliers found in fiscal stimuli compared to consolidation plans.Link

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Anticipation, Tax Avoidance, and the Price Elasticity of Gasoline Demand

Anticipation, Tax Avoidance, and the Price Elasticity of Gasoline Demand. John Coglianese, James Stock, February 2017, Paper, “Traditional least squares estimates of the responsiveness of gasoline consumption to changes in gasoline prices are biased toward zero, given the endogeneity of gasoline prices. A seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes, but this approach tends to yield implausibly large price elasticities. We demonstrate that anticipatory behavior provides an important explanation for this result. We provide evidence that gasoline buyers increase gasoline purchases before tax increases and delay gasoline purchases before tax decreases.Link

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