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Laffer Curves in Japan

  • Kengo Nutahara

This paper investigates the Laffer curves in Japan, based on a neoclassical growth model. It is found that while the labor tax rate is smaller than that at the peak of the Laffer curve, the capital tax rate is either very close to, or larger than, that at the peak of the Laffer curve. This problem is more serious when the consumption tax rate is high. It is also found that to maximize total tax revenue, the government should increase the labor tax rate but decrease the capital tax rate

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File URL: http://www.canon-igs.org/research_papers/131112_nutahara_WP007E.pdf
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Paper provided by The Canon Institute for Global Studies in its series CIGS Working Paper Series with number 13-007E.

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Length: 30
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:cnn:wpaper:13-007e
Contact details of provider: Web page: http://www.canon-igs.org/en/

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  1. Keiichiro Kobayashi & Masaru Inaba, 2006. "Business cycle accounting for the Japanese economy," 2006 Meeting Papers 313, Society for Economic Dynamics.
  2. Gary D. Hansen & Selahattin Imrohoroglu, 2013. "Fiscal Reform and Government Debt in Japan: A Neoclassical Perspective," IMES Discussion Paper Series 13-E-10, Institute for Monetary and Economic Studies, Bank of Japan.
  3. Kenneth L. Judd, 1982. "Redistributive Taxation in a Simple Perfect Foresight Model," Discussion Papers 572, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Harald Uhlig & Mathias Trabandt, 2009. "How Far are We from the Slippery Slope? The Laffer Curve Revisited," Working Papers 2009-005, Becker Friedman Institute for Research In Economics.
  5. Yuki Teranishi & Ippei Fujiwara & Naoko Hara, 2004. "The Japanese Economic Model: JEM," Econometric Society 2004 Far Eastern Meetings 723, Econometric Society.
  6. Fumio Hayashi & Edward C. Prescott, 2002. "The 1990s in Japan: A Lost Decade," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 206-235, January.
  7. R. Anton Braun & Harald Uhlig, 2006. "The Welfare Enhancing Effects of a Selfish Government in the Presence of Uninsurable, Idiosyncratic Risk," CIRJE F-Series CIRJE-F-436, CIRJE, Faculty of Economics, University of Tokyo.
  8. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, vol. 54(3), pages 607-22, May.
  9. Trabandt, Mathias & Uhlig, Harald, 2011. "The Laffer curve revisited," Journal of Monetary Economics, Elsevier, vol. 58(4), pages 305-327.
  10. Sugo, Tomohiro & Ueda, Kozo, 2008. "Estimating a dynamic stochastic general equilibrium model for Japan," Journal of the Japanese and International Economies, Elsevier, vol. 22(4), pages 476-502, December.
  11. Gunji, Hiroshi & Miyazaki, Kenji, 2011. "Estimates of average marginal tax rates on factor incomes in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 25(2), pages 81-106, June.
  12. Joines, Douglas H, 1981. "Estimates of Effective Marginal Tax Rates on Factor Incomes," The Journal of Business, University of Chicago Press, vol. 54(2), pages 191-226, April.
  13. Kensuke Miyazawa & Kengo Nutahara, 2013. "Dynamic Effects of Fiscal Policy in Japan: Evidence from a Structural VAR with Sign Restrictions," CIGS Working Paper Series 13-006E, The Canon Institute for Global Studies.
  14. Uhlig, Harald & Yanagawa, Noriyuki, 1996. "Increasing the capital income tax may lead to faster growth," European Economic Review, Elsevier, vol. 40(8), pages 1521-1540, November.
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