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Analizando la determinación de impuesto a la renta y sus efectos sobre el crecimiento de la economía boliviana
[On the determination of income tax and its effects on the economic growth in Bolivia]

  • Valdivia, Daney
  • Loayza, Lilian

We compute the optimal income tax using the Quarterly Employment Survey 2010 and the model proposed by Kaplow (2008). The collection of optimal income taxes excludes 92% of people and it’s applied in the three stages; results show that 17% of income tax is optimal. The “optimal tax” is applied in a modified version of the model proposed by Valdivia and Montenegro (2008) in order to evaluate the redistribution effectiveness of consumption and its effects on economic growth. Results show that rule-of-thumb consumption raise 10.7% with a sacrifice of 4% of ricardian households and an increase of total consumption of 0.63% and economic growth, in the medium term, of 0.3% over its natural level. In the same way, fiscal spending raise and we can see positive effects on factor markets (employment and capital raises). Finally, according to the results showed we can see that welfare should be better because the introduction of the income tax causes intra and intergenerational redistribution across households.

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File URL: http://mpra.ub.uni-muenchen.de/37211/1/MPRA_paper_37211.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37211.

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Date of creation: 24 Jan 2012
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Handle: RePEc:pra:mprapa:37211
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  1. Daney, Valdivia & Marcelo, Montenegro, 2009. "Bolivia’s fiscal rules: dynamic stochastic general equilibrium model approach," MPRA Paper 32114, University Library of Munich, Germany.
  2. Feldstein, Martin, 1995. "Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Scholarly Articles 2766676, Harvard University Department of Economics.
  3. N. Gregory Mankiw & Matthew Weinzierl & Danny Yagan, 2009. "Optimal Taxation in Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 147-74, Fall.
  4. Diamond, Peter A, 1998. "Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates," American Economic Review, American Economic Association, vol. 88(1), pages 83-95, March.
  5. Albert Marcet & Thomas J. Sargent & Juha Seppala, 1996. "Optimal taxation without state-contingent debt," Economics Working Papers 170, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2001.
  6. Judd, Kenneth L., 1985. "Redistributive taxation in a simple perfect foresight model," Journal of Public Economics, Elsevier, vol. 28(1), pages 59-83, October.
  7. Joel Slemrod & Shlomo Yitzhaki & Joram Mayshar, 1991. "The Optimal Two-Bracket Linear Income Tax," NBER Working Papers 3847, National Bureau of Economic Research, Inc.
  8. Mikhail Golosov & Aleh Tsyvinski & Ivan Werning, 2007. "New Dynamic Public Finance: A User's Guide," NBER Chapters, in: NBER Macroeconomics Annual 2006, Volume 21, pages 317-388 National Bureau of Economic Research, Inc.
  9. Barro, Robert J. & Sahasakul, Chaipat, 1983. "Measuring the Average Marginal Tax Rate from the Individual Income Tax," Scholarly Articles 3451293, Harvard University Department of Economics.
  10. Michel Strawczynski & Momi Dahan, 2000. "Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates: Comment," American Economic Review, American Economic Association, vol. 90(3), pages 681-686, June.
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