Lower Marginal Rates Research Articles

Worldwide Fiscal Progressivity: What can we Learn from Subjective Wellbeing Economics?

The link between fiscal progressivity and subjective well-being at global level is an issue that has hardly been considered in the literature on the Economics of Happiness. Oishi et al. (2012) is almost the only work in this field, and they concluded that those countries which had more progressive income tax systems were also happier. Our work use their definition of progressivity as the difference between the upper and lower marginal rate on income, in order to prove its relationship with subjective well-being (SWB), but we have observed that such indicator is not very significant for a sample of 111 countries. Besides, we conclude that the fact that a country's maximum income tax rate is high turns out to have a strong influence on the declared subjective well-being of its citizens. One possible explanation for it could be that they are countries with a high GDP per capita in which disposable income after taxes remains high. However, it must be taken into account that in our work we have managed to isolate the influences that the GDP per capita variable could have using the principal component analysis method.

The Long-Run Equilibrium of Industry Population and Bottom Lines: Analysing the Near-Perfect Restaurant Industry

The establishment and bankruptcy of businesses is a crucial aspect of the market economy. The market in which restaurants compete is characterized by few barriers to entry, strong competition, low marginal rates of profit, and high levels of bankruptcy. Using publicly available panel data of all Norwegian restaurants, we examine the determinants of market levels of entry and exit. In theory, the driving force in the space of market turnover is the marginal rate of profit in the industry. There is a strong link between the profit rates in the sector and number of firms leaving and entry the marked.

Prognostic Relevance of Treatment Failure Patterns in Pediatric High-Grade Glioma: Is There a Role for a Revised Failure Classification System?

We sought to investigate the pattern of treatment failure with respect to anatomic extent, radiation dose, and criteria for failure according to the Response Assessment in Neuro-Oncology (RANO). We evaluated the corresponding prognostic significance of these factors in patients with pediatric high-grade glioma (pHGG). Fifty-six patients with pHGG were enrolled in an institutional phase 1 to 2 prospective trial that included maximal safe resection and radiation therapy with concurrent and adjuvant erlotinib. The radiation therapy dose administered was 54 to 59.4Gy at 1.8Gy/d. Tumor progression was defined according to clinical symptoms and imaging features and was classified in relation to the original extent of the tumor, radiation prescription target volume coverage, and RANO criteria (RANOc). With a median follow-up period of 90months (range, 70-124months), progression occurred in 48 patients (85.7%) while 8 (14.3%) were without progression. Central failure represented 42.6% of the total cohort, while in-field, marginal, and distant failures occurred in 7.4%, 9.3%, and 22.2%, respectively. Patients with biopsy or subtotal resection had increased rates of central failure and represented 14.81% and 16.67% of the total cohort, respectively. Tumor progression was classified as local, local plus distant, or distant. Among patients with local failure as a component of failure, 5 were considered to have marginal failure. Patients with frontal, temporal, and parietal disease had the highest rates of multifocal failure. A comparison between responses defined by RANOc demonstrated varied time to death (TTD) from progression. Pediatric high-grade glioma was shown to have high rates of central failure,particularly in cases with limited resection. Patients with central failure had a trend toward more prolonged TTD from failure relative to other failure patterns. The low marginal failure rates seen in this group suggest that less conservative radiation target margins may be possible. TTD from failure varied according to RANO type, suggesting that adult RANOc require modification before being applied to pHGG.

Option smiling when investors’ estimates of asset volatility disagree

This study sheds light on why heterogeneous beliefs in volatility manifest the smile effect of options and how the degree of belief disagreement influences option-implied volatility. It is found that when investors’ level of heterogeneous beliefs increases, agents who over estimate volatility raise their subjective probability about those outer dividend states and hence increase more consumption to those states. As a result, an increase of consumption causes a decrease of their marginal rate of transformation in outer states. The raising subjective probability increases the prices of outer states, while the lower marginal rate of transformation decreases the prices of that. However, the influence of the former dominates the latter, causing a fatter tail of the state-price density. As a consequence, the values increase for those call options with high strike prices and put options with low strike prices, leading to a U-shaped implied volatility and hence causes a smell effect.

A Multinational, Multi-institutional Study Comparing Positive Surgical Margin Rates Among 22 393 Open, Laparoscopic, and Robot-assisted Radical Prostatectomy Patients

BackgroundPositive surgical margins (PSMs) are a known risk factor for biochemical recurrence in patients with prostate cancer (PCa) and are potentially affected by surgical technique and volume. ObjectiveTo investigate whether radical prostatectomy (RP) modality and volume affect PSM rates. Design, setting, and participantsFourteen institutions in Europe, the United States, and Australia were invited to participate in this study, all of which retrospectively provided margins data on 9778 open RP, 4918 laparoscopic RP, and 7697 robotic RP patients operated on between January 2000 and October 2011. Outcome measurements and statistical analysesThe outcome measure was PSM rate. Multivariable logistic regression analyses and propensity score methods identified odds ratios for risk of a PSM for one modality compared with another, after adjustment for age, preoperative prostate-specific antigen, postoperative Gleason score, pathologic stage, and year of surgery. Classic adjustment using standard covariates was also implemented to compare PSM rates based on center volume for each minimally invasive surgical cohort. Results and limitationsOpen RP patients had higher-risk PCa at time of surgery on average and were operated on earlier in the study time period on average, compared with minimally invasive cohorts. Crude margin rates were lowest for robotic RP (13.8%), intermediate for laparoscopic RP (16.3%), and highest for open RP (22.8%); significant differences persisted, although were ameliorated, after statistical adjustments. Lower-volume centers had increased risks of PSM compared with the highest-volume center for both laparoscopic RP and robotic RP. The study is limited by its nonrandomized nature; missing data across covariates, especially year of surgery in many of the open cohort cases; lack of standardized histologic processing and central pathology review; and lack of information regarding potential confounders such as patient comorbidity, nerve-sparing status, lymph node status, tumor volume, and individual surgeon caseload. ConclusionsThis multinational, multi-institutional study of 22 393 patients after RP suggests that PSM rates might be lower after minimally invasive techniques than after open RP and that PSM rates are affected by center volume in laparoscopic and robotic cases. Patient summaryIn this study, we compared the effectiveness of different types of surgery for prostate cancer by looking at the rates of cancer cells left at the margins of what was removed in the operations. We compared open, keyhole, and robotic surgery from many centers across the globe and found that robotic and keyhole operations appeared to have lower margin rates than open surgeries. How many cases a center and surgeon do seems to affect this rate for both robotic and keyhole procedures.

Using a Microeconometric Model of Household Labour Supply to Design Optimal Income Taxes*

AbstractWith regards to empirical applications of optimal taxation theory, analytical expressions are typically adopted for optimal taxes, and then numerical values are imputed to their parameters by calibration or by using previous estimates. We aim to avoid the restrictive assumptions and possible inconsistencies of this approach. In contrast, we identify optimal taxes by iteratively running a microeconometric model, based on 1994 Norwegian data, until a given social welfare function is maximized, given the public budget constraint. The optimal rules envisage monotonically increasing marginal rates (negative on very low incomes) and – compared to the current rule – a lower average rate, lower marginal rates on low incomes, and higher marginal rates on very high incomes.

The efficiency performance of Taiwanese enterprises in China: Tax incentive perspective

This paper explores the efficiency performance of individual Taiwanese manufacturing enterprises in China and Chinese tax incentives impact. Applying data envelopment analysis (DEA) to operations data for 3,506 firms over the four year period (2004 to 2007), the study finds that Taiwanese firms located in the special tax incentive zones benefit from tax incentives than their counterparts in the other zones along with better efficiency performances with statistical significance. In addition, the productive technology industry enjoys better tax incentives but the efficiency performance worsens due to the higher capital requirements and greater operating risks. The average investment years of Taiwanese manufacturing enterprises in productive technology industry are shorter and the payback period is longer rather than other industries. The major production type of the technology industry is original equipment manufacturer (OEM) with lower margin rate, compared with the upstream value chain of the high technology sector. Finally, the study demonstrates that Taiwanese firms with the smaller size and higher sales growth exhibit better efficiency performance. Key words: Tax incentives, efficiency, foreign direct investment (FDI), data envelopment analysis (DEA).

Impact of Robotic Training on Surgical and Pathologic Outcomes During Robot-assisted Laparoscopic Radical Prostatectomy

To prospectively compare outcomes during robotic prostatectomy between surgeons with formal training in either robotic prostatectomy (RALP) or laparoscopic prostatectomy (LRP). A total of 286 robotic prostatectomies were performed by 12 urologists between August 2008 and March 2009 as part of a new robotic surgery program at one of the largest health maintenance organizations in the United States. Four surgeons had formal training in RALP and 8 had formal training in LRP. We prospectively compared surgical and pathologic outcomes between these 2 groups of surgeons. The 4 RALP surgeons performed 121 RALPs and the 8 LRP surgeons performed 165 RALPs. Patient demographics were similar between groups. The robot-naive group had significantly more clinical stage T1c than the robot-trained group (87.9% vs 74.4%, P = .003). Prostatectomy parameters were similar between the 2 groups of surgeons in terms of prostate size, Gleason score, pathologic stage, and estimated blood loss. The robot-trained surgeons had significantly lower overall positive margin rates (24% vs 34.6%, P = .05) and lower margin rates in T3 tumors (38.5% vs 61.8%, P = .07), which were approximately statistically significant. There was no difference in margin rates in T2 tumors. The robot-trained surgeons had significantly lower apical margin rates (8.3% vs 21.2%, P = .003) and lateral margin rates (1.7% vs 7.3%, P = .05). The robot-trained surgeons had 10%-15% shorter procedure times. There was no difference in complication rates. Formal RALP training may be beneficial for surgical and pathologic outcomes of RALP compared with formal LRP training during the initial implementation of a new robotics program.

Outcomes of robotic assisted radical prostatectomy

Robot-assisted radical prostatectomy (RARP) is a rapidly evolving technique for the treatment of localized prostate cancer. However, cynics point to the increasing role of market forces in the robotic revolution. As yet, Europe has not taken up RARP in large numbers and this may in part relate to the high level of expertise in laparoscopy previously gained. Furthermore, setting up a robotic program is a major undertaking for many surgical units. This article reviews the current literature on RARP with regard to oncologic, continence and potency outcomes - the so called 'trifecta'. Preliminary data appears to show an advantage of RARP over open prostatectomy with reduced blood loss, decreased pain, early mobilization, shorter hospital stay and lower margin rates. Most intra-institutional studies demonstrate good postoperative continence and potency with RARP; however this needs to be viewed in the context of a paucity of randomized data available in the literature. There is no definitive data to show an advantage over standard laparoscopy, but the fact that this technique has reached parity with laparoscopy within 5 years is encouraging.

The current status of robot-assisted radical prostatectomy

Robot-assisted radical prostatectomy (RARP) is a rapidly evolving technique for the treatment of localized prostate cancer. In the United States, over 65% of radical prostatectomies are robot-assisted, although the acceptance of this technology in Europe and the rest of the world has been somewhat slower. This article reviews the current literature on RARP with regard to oncological, continence and potency outcomes-the so-called 'trifecta'. Preliminary data appear to show an advantage of RARP over open prostatectomy, with reduced blood loss, decreased pain, early mobilization, shorter hospital stay and lower margin rates. Most studies show good postoperative continence and potency with RARP; however, this needs to be viewed in the context of the paucity of randomized data available in the literature. There is no definitive evidence to show an advantage over standard laparoscopy, but the fact that this technique has reached parity with laparoscopy within 5 years is encouraging. Finally, evolving techniques of single-port robotic prostatectomy, laser-guided robotics, catheter-free prostatectomy and image-guided robotics are discussed.

The Uneasy Case for a Comprehensive Tax Base

In discussing tax simplification, commentators often advocate a comprehensive income tax system that has a broad base and low rates over income tax systems that have a narrow base and higher marginal rates (such as the one in the US). Advocates assert that a comprehensive tax base with low marginal rates will reduce tax evasion and tax avoidance and increase economic efficiencies. This paper shows that two of the benefits often attributed to a comprehensive tax base, decreased tax evasion and increased economic efficiency, are not as certain as may first appear. With respect to tax evasion, economic theory cannot predict whether reduced tax rates will result in less tax evasion. Depending upon assumptions about how risk aversion changes in response to income, some models predict that tax evasion will actually increase as tax rates decrease. Since there is significant uncertainty about how risk aversion actually functions in the real world, there is no basis for preferring any particular set of assumptions regarding risk aversion. Thus, the effect of tax rates on evasion has to be viewed as an empirical question. The empirical studies, however, have produced contradictory results. As to the other claimed benefit, increased efficiency, economic theory also cannot predict whether broadening the tax base and reducing the marginal rates will increase economic efficiency as compared to a narrower tax base with higher rates. Increasing the tax base will cause items that had previously not been taxed to be taxed and, therefore, increase the excess burden with respect to those items. At the same time, the lower tax rate will decrease the excess burden of items that had already been taxed in the narrow base. Whether the increases will exceed the decreases cannot be predicted by theory. Instead, the question is again an empirical one that is very difficult to resolve. With respect to the benefits of a comprehensive income tax that are discussed herein, the only certain one is that it should reduce the opportunity for tax avoidance since it reduces differential treatment of items.

Road Sector Development in China and India: Trends and Implications

India and China plan to pour billions of dollars into trunk road capacity and rural accessibility improvement projects over the next 15 years. However, there is concern about possible shortfalls in funding, largely because of competition from other sectors and numerous weaknesses in regulatory and control mechanisms in the road sector. Even if sufficient funds are available, inefficiencies in transport services and asset management are likely to return lower marginal rates on future investment. On the basis of a review of literature from the past 5 years, a case is outlined for further policy and strategy changes to maximize the benefits of investment in road assets. It is suggested that donors and governments should broaden support for the road sector to encompass transport services and traffic operations, with the aim of increasing productivity and decreasing negative externalities such as traffic accidents and vehicle emissions.

Road Sector Development in China and India

India and China plan to pour billions of dollars into trunk road capacity and rural accessibility improvement projects over the next 15 years. However, there is concern about possible shortfalls in funding, largely because of competition from other sectors and numerous weaknesses in regulatory and control mechanisms in the road sector. Even if sufficient funds are available, inefficiencies in transport services and asset management are likely to return lower marginal rates on future investment. On the basis of a review of literature from the past 5 years, a case is outlined for further policy and strategy changes to maximize the benefits of investment in road assets. It is suggested that donors and governments should broaden support for the road sector to encompass transport services and traffic operations, with the aim of increasing productivity and decreasing negative externalities such as traffic accidents and vehicle emissions.

The Tax Unit and Household Production

Under a progressive income tax, conventional wisdom is that taxing individuals rather than households is preferred from an efficiency point of view. The reason is that secondary workers, whose labor supply elasticity is high, will be taxed at a lower marginal rate than primary workers, whose labor supply elasticity is low. Here, we argue that once household production is taken into account, things are more complicated since tax design should also not distort the input of family members' time in household production. Factor input distortions as well as Ramsey considerations thus need to enter the choice of the tax unit. We provide a numerical example of an economy for which a move from an individual to a household basis in the income tax can be efficiency improving. We then use a general equilibrium model, parameterized using Australian tax rates and data, whose results clearly show that welfare gains can occur under changes from an individual to a household basis for an existing income tax. Our results thus challenge conventional wisdom and suggest that household unit taxation deserves more sympathetic consideration than is currently the case.

Tax Incentives and Capital Structures: The Case of the Dividend Reinvestment Plan

This study investigates the impact of 1981 tax legislation (Internal Revenue Code (IRC) Section 305(e)) creating tax deferral for dividend reinvestment plans (DRPs) of qualifying utility companies. The intent of the legislation was to assist public utilities in raising new equity capital by encouraging reinvestment of dividends in qualifying firms. The effectiveness of this legislation is in doubt for at least two reasons. First, the tax benefits to any taxpayer were only $750 for single returns and $1,500 for joint returns. Second, clientele arguments (Miller [1977] and Miller and Scholes [1982]) suggest that taxpayers subject to low marginal rates would be typical investors in utility stocks. Both conditions imply that the economic incentives associated with dividend deferral might be small. Our results indicate that the second condition-low marginal rate taxpayers holding utility stocks-is not observed. Specifically, we observe a positive share price reaction at announcements related to

Worldwide Tax Reform ‘How Does Australia Compare?’

Drawing principally on the English-speaking countries, where tax reform has proceeded furthest, the common characteristics and causes of the worldwide tax reform movement of the 1980s are examined. Tax reform reflected the change in economic philosophy — disillusionment with state intervention and a revival of belief in the efficacy of markets. The causes and content of tax reform in Australia have much in common with those elsewhere except that the reduction in marginal rates of income tax was achieved with no real change in the tax mix. The success of tax reform is assessed using as criteria: (i) how far the outcome matched the objectives specified by the reformers themselves — in particular tax neutrality; (ii) the sustain-ability of the reforms; and (iii) how far ‘undesirable’ consequences (especially distributional effects) were avoided. Applying these criteria to Ireland, Canada, the United Kingdom, the United States, New Zealand and Australia, it is concluded that in all these countries there are deficiencies, but Australia comes second to New Zealand in the success league. The notable Australian deficiencies are the lack of a broad-based consumption tax (Australia is now the only OECD country without one) and the fact that lower marginal rates of income tax have been achieved mainly because of falling real thresholds of the tax brackets.

Labour Supply Incentives and the Taxation of Family Income

Taxing family income Richard Blundell and Ian Walker Will lower marginal rates of income tax increase incentives to work? The traditional theoretical argument ignores the fact that many individuals are members of households with more than one potential participant in paid employment. The theory of optimal income tax is utilized to argue that the tax system should discriminate between individuals in the same household if their labour supply responses are different. Empirically, the response of labour supply to changes in after-tax wages is largest for secondary workers (particularly married women). Hence, the largest beneficial incentive effect is obtained if such individuals face lower tax rates. Since these individuals typically have below average pre-tax earnings, this suggests a simple way to implement our proposal: establish a progressive income tax with individual earnings as the basis of assessment. This might have additional advantages of fairness but its primary purpose would be to ensure that low-earning but highly responsive individuals face low marginal tax rates while high-earning but relatively unresponsive individuals face higher marginal tax rates. Contrary to popular wisdom, a flat-rate tax system would be less favourable for work incentives. We illustrate this theoretical argument using an empirical model of labour supply embedded in a micro computer programme capable of simulating alternative tax systems.

Personal Income Taxes in Developing Countries

Comparative work on income taxes in developing countries has commonly looked at average tax rates. These rates are often constructed by dividing revenue collections by some measure of private or personal income. Recent controversies have, however, focused on the incentive effects of marginal tax rates. This article develops and applies a simple methodology to compare marginal official tax rates across a sample of fifty developing countries. As would be expected given differences in fiscal capacity, the poorest and the lower-middle-income countries impose relatively low marginal rates, and the rates for the upper-middle-income and developed countries are higher. Conversely, several low and lower-middle income countries' tax thresholds start at income levels which are low relative to their mean income when compared with those of developed countries. The results warn against trying to derive information on the disincentive effect of a country's tax schedule from the highest marginal rate; the authors' data show that this is not an accurate indicator of overall disincentive effects.

The Impact of Tax Simplification on Mortgate Buyouts

Whenever current mortgage rates are substantially higher than previous levels, mortgage lenders may find it attractive to extend to the borrowers a special opportunity to prepay all or part of the mortgages. The purpose of this paper is to identify the important issues in the buy‐out decision, analyze how buy‐back proposals might work using representative mortgages dating back to 1961, and to evaluate how current tax reform proposals will affect the buy‐out process. The empirical analysis demonstrates that only the lenders in the highest tax brackets would find such buy‐out programs profitable, while it is the borrowers in the lowest brackets that would find buy‐outs most attractive. The lack of lenders with high marginal tax rates and the lack of wealth by borrowers with low marginal rates suggests why such buy‐out programs have not been popular in recent years. The analysis of several recently proposed tax plans indicates that buy‐out programs should become more popular in the future, especially at such times as mortgage rates begin to climb again.