Using Human Capital Theory to Establish a Potential Income Tax
AbstractThere are good arguments for an individual income tax on “potential income”, but the drawback to such a tax is the significant administrative concern regarding the implementation of the tax. This paper argues that human capital theory provides a widely accepted and straightforward method to estimate “potential income” using observed characteristics of individuals, and operationalizes this approach using data for the U.S.A. The paper also suggests that a “potential income tax” is very similar to a “presumptive income tax.” The paper concludes by reviewing some significant problems with the implementation of a potential/presumptive income tax.
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Bibliographic InfoPaper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0710.
Length: 32 pages
Date of creation: 01 Jun 2007
Date of revision:
Contact details of provider:
Web page: http://aysps.gsu.edu/isp/index.html
Human Capital; Potential Income Tax; presumptive income tax;
Other versions of this item:
- Dagney Faulk & Jorge Martinez-Vazquez & Sally Wallace, 2007. "Using Human-Capital Theory to Establish a Potential-Income Tax," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(3), pages 415-435, September.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-05 (All new papers)
- NEP-HRM-2008-01-05 (Human Capital & Human Resource Management)
- NEP-PBE-2008-01-05 (Public Economics)
- NEP-PUB-2008-01-05 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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