A Reexamination of Tax Distortions in General Equilibrium Models
AbstractGeneral equilibrium models have recently been used to simulate the effects of many proposed tax changes. However, in modeling the effects of the government on the economy, these models have assumed for simplicity that marginal tax rates equal the observed average tax rates, and that marginal benefit rates are zero. The main purpose of this paper is to derive improved estimates of various marginal tax and benefit rates. Most importantly, we include in the model recent theories concerning the effects of combined corporate and personal taxes on corporate financial and investment decisions. The conclusions previously derived concerning the effects of corporate tax integration are then reexamined in light of the proposed changes.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0673.
Date of creation: Oct 1983
Date of revision:
Publication status: published as Don Fullerton, Roger H. Gordon. "A Reexamination of Tax Distortions in General Equilibrium Models," in Martin Feldstein, ed., "Behavioral Simulation Methods in Tax Policy Analysis" University of Chicago Press (1983)
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Other versions of this item:
- Don Fullerton & Roger H. Gordon, 1983. "A Reexamination of Tax Distortions in General Equilibrium Models," NBER Chapters, in: Behavioral Simulation Methods in Tax Policy Analysis, pages 369-426 National Bureau of Economic Research, Inc.
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