Empirical essays on taxation and tax policy

Abstract

This collection of essays addresses empirical topics in taxation and tax policy. The first paper addresses the link between corporate tax incidence and corporate tax progressivity. The goals of the paper are twofold. The first goal is to estimate the effect of the corporate tax incidence assumption on corporate tax progressivity. Corporate tax incidence is a controversial topic; recent empirical studies have found that wage earners bear the bulk of the corporate tax burden, while general equilibrium models have produced mixed results. This study shows that the corporate tax remains a progressive aspect of the tax code under a range of incidence assumptions. The second goal of the paper is to show the distributional effects of a revenue-neutral shift in corporate profits taxation from the corporate level to the individual level. Such a shift is shown to be progressive under a range of incidence assumptions.

The second paper evaluates the labor supply effect of Individual Development Accounts (IDAs), which are targeted saving subsides available to low-income workers. The study utilizes experimental data from an IDA offered in Tulsa, Oklahoma, between 1998 and 2003. The primary finding is that IDAs have no significant effect on labor market participation, employment, hours worked, or human capital attainment.

The third paper evaluates the effect of selected income tax reforms on the user cost of housing capital and equilibrium housing prices in 23 selected metropolitan markets. The primary finding is that income tax reforms can have substantial impacts on the user cost of housing capital, and that there is significant heterogeneity in the effects across metropolitan regions. In particular, reforms that explicitly or implicitly remove the tax preference for housing tend to have larger effects in coastal cities relative to cities located inland.