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Tax Smoothing (tax + smoothing)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Population Ageing, Fiscal Pressure and Tax Smoothing: A CGE Application to Australia,

FISCAL STUDIES, Issue 2 2006
Ross Guest
Abstract This paper analyses the fiscal pressure from population ageing using an intertemporal CGE model, applied to Australia, and compares the results with those of a recent government-commissioned study. The latter study uses an alternative modelling approach based on extrapolation rather than optimising behaviour of consumers and firms. The deadweight losses from the fiscal pressure caused by population ageing are equivalent to an annual loss of consumption of $260 per person per year in 2003 dollars in the balanced-budget scenario. A feasible degree of tax smoothing would reduce this welfare loss by an equivalent of $70 per person per year. Unlike the extrapolation-based model, the CGE approach takes account of feedback effects of ageing-induced tax increases on consumption and labour supply, which in turn impact on the ultimate magnitude of fiscal pressure and therefore tax increases. However, a counterfactual simulation suggests that the difference in terms of deadweight losses between the two modelling approaches is modest, at about $30 per person per year. [source]

Smoothing the Fiscal Costs of Population Ageing in Australia: Effects on Intergenerational Equity and Social Welfare,

THE ECONOMIC RECORD, Issue 265 2008
ROSS GUEST
This paper applies an overlapping generations model in order to evaluate the case for smoothing the fiscal costs associated with population ageing. The motivation is the establishment in Australia of the Future Fund which acts to smooth the tax burden over time. The conclusion is that tax smoothing of the order implied by the Future Fund yields a gain in social welfare in the order of 1.0 per cent in equivalent annual increases in GDP. All current generations of workers and retired workers are worse off, with middle-aged workers the worst affected, but future generations are better off and by larger magnitudes. [source]

UK DEBT SUSTAINABILITY: SOME NONLINEAR EVIDENCE AND THEORETICAL IMPLICATIONS,

THE MANCHESTER SCHOOL, Issue 3 2008
JOHN CONSIDINE
In this paper we assess whether the UK public finances were sustainable for the period 1919,2001. A robust test of sustainability is presented using a nonlinear representation of the debt,GDP ratio. Empirical evidence supports debt sustainability. Moreover, the exponential smooth transition autoregressive representation is evidence that sustainability is the result of active debt management rather than tax smoothing. The results strongly support the active debt management hypothesis for the UK. [source]