Progressive Marginal Rates Research Articles

ALTERNATIVAS À REDUÇÃO DA REGRESSIVIDADE DO IMPOSTO DE RENDA DA PESSOA FÍSICA NO BRASIL

O Brasil, no passado recente, não implementou a redução das desigualdadesde renda através de uma política tributária progressiva. Ao contrário, nos anos 1990,seguiu as orientações de organismos multilaterais, como o Fundo Monetário Internacional,de redução das alíquotas marginais do Imposto de Renda da Pessoa Física (IRPF),restringindo ainda mais o papel distributivo desse imposto, e, nos anos 2000, optoupela ótica do gasto, como alternativa à redução da desigualdade de renda no país.Diante disso e da visão da Teoria de Tributação Equitativa e a partir dos princípios constitucionais da isonomia e da capacidade contributiva, analisa-se a regressividade doIRPF a despeito das alíquotas marginais progressivas. Observa-se que a alíquota efetivaapresenta uma relação decrescente com o aumento da renda. A partir de rendas acimade 40 salários mínimos, quanto maior a renda, menor é a alíquota efetiva do IRPF, enquantoque, para contribuintes com renda acima de 320 salários mínimos, a alíquotaefetiva do IRPF é de 2,1% e para contribuintes com faixa de renda entre 30 e 40 saláriosmínimos é de 10,5%, ou seja cinco vezes maior. A partir disso, apresentam-se três simulaçõespara a atualização da tabela de IRPF visando suprir as iniquidades desse tributo,consequentemente ampliando a arrecadação e contribuindo para o enfrentamento dacrise fiscal do Estado.

Progressive Taxation of Extractive Resources as Second-Best Optimal Policy

The paper provides a critical review of the literature on the concept of progressivity in the taxation of petroleum and mineral resources and offers a fresh perspective on its purpose and measurement. Regressive taxes, such as royalties, exist to satisfy policy objectives other than revenue maximization, such as achieving early revenues, while rent-based or profit-sensitive fiscal instruments must be designed with progressive marginal rates to maximize government revenues. Hence, the emphasis should be placed on tax rate progression of the direct taxation of profit or rent, rather than progressivity in the overall government take. However, as regressive taxes, by their very nature, tend to be distortionary, the optimal degree of progression in the rent- or profit-tax rates must take these distortions into account. The central ideas are illustrated with a simple analytical model in which a second-best optimal tax rate schedule on profit is characterized in the presence of the tax distortions caused by the regressive taxes. Some practical implications of the analysis are discussed.

Progressive Taxation of Extractive Resources as Second-Best Optimal Policy

The paper provides a critical review of the literature on the concept of progressivity in the taxation of petroleum and mineral resources and offers a fresh perspective on its purpose and measurement. Regressive taxes, such as royalties, exist to satisfy policy objectives other than revenue maximization, such as achieving early revenues, while rent-based or profit-sensitive fiscal instruments must be designed with progressive marginal rates to maximize government revenues. Hence, the emphasis should be placed on tax rate progression of the direct taxation of profit or rent, rather than progressivity in the overall government take. However, as regressive taxes, by their very nature, tend to be distortionary, the optimal degree of progression in the rent- or profit-tax rates must take these distortions into account. The central ideas are illustrated with a simple analytical model in which a second-best optimal tax rate schedule on profit is characterized in the presence of the tax distortions caused by the regressive taxes. Some practical implications of the analysis are discussed.

Progressive Taxation of Extractive Resources as Second-Best Optimal Policy

The paper provides a critical review of the literature on the concept of progressivity in thetaxation of petroleum and mineral resources and offers a fresh perspective on its purpose andmeasurement. Regressive taxes, such as royalties, exist to satisfy policy objectives other thanrevenue maximization, such as achieving early revenues, while rent-based or profit-sensitivefiscal instruments must be designed with progressive marginal rates to maximize governmentrevenues. Hence, the emphasis should be placed on tax rate progression of the direct taxationof profit or rent, rather than progressivity in the overall government take. However, asregressive taxes, by their very nature, tend to be distortionary, the optimal degree ofprogression in the rent- or profit-tax rates must take these distortions into account. The centralideas are illustrated with a simple analytical model in which a second-best optimal tax rateschedule on profit is characterized in the presence of the tax distortions caused by theregressive taxes. Some practical implications of the analysis are discussed.

Tax Policy and Personal Identity Over Time

Tax policy analysts often claim that tax distributional analysis should be based on a lifetime perspective, at least as a theoretical ideal. A prominent argument in favor of a consumption tax base over an income tax base appeals to this lifetime equity perspective, as does the argument for lifetime income averaging under an income tax with progressive marginal rates. These appeals to lifetime equity assume, in most cases without discussion, that personal identity over time is an unproblematic concept, so that the whole-life person is clearly the ideal unit for purposes of distributional analysis. However, the philosopher Derek Parfit claims that personal identity is not stable over time; to Parfit there is an important sense in which a person today is not the same person he was several decades ago. To one who is persuaded by Parfit’s view, the merits of the whole-life approach to tax equity analysis will be far from clear. This article describes Parfit’s account of the nature of personal identity over time, and considers how tax policy analysis changes if one takes the Parfitian view rather than the standard view of personal identity. The article concludes that the arguments for consumption taxation (in preference to income taxation) and for lifetime averaging are much weaker under Parfit’s account of personal identity, and that age-sensitive taxation (e.g., different tax rate schedules for taxpayers of different ages) becomes more attractive under Parfit’s account.

Can the Graduated Income Tax Survive Optimal Tax Analysis?

Optimal tax analysis attempts to find the income tax rate structure which maximizes social welfare, under a chosen social welfare function (which can range from purely utilitarian to a Rawlsian maximin). It provides sophisticated mathematical techniques for balancing the welfare gains from redistribution against the welfare losses from the disincentive effects of taxation. Although the results of optimal tax simulations are sensitive to factual assumptions (relating to the rate at which the marginal utility of money declines, the strength of the disincentive effects of taxation, and the distribution of wage rates) and to the choice of social welfare function, one result is surprisingly robust: the marginal tax rate rises through the bottom decile of the societal wage distribution, but falls as income increases thereafter. These results provide high-level intellectual support for the attack on progressive marginal rates by the flat tax movement. To date, however, optimal tax simulations have uniformly assumed that much or all of the revenue raised by taxation will be used to finance universal cash grants (demogrants), and the combined effect of the cash grants and the regressive marginal rate structure has been optimal tax-and-transfer systems with progressivity of average (as contrasted with marginal) tax rates. The paper criticizes the demogrant assumption as politically unrealistic, and considers whether optimal marginal rates would continue to be regressive if demogrants are ruled out on political grounds?i.e., if the only purpose of taxation is to finance non-redistributive governmental functions. The paper reports on the results of a simulation which assumes no demogrants, a poverty-level exemption (zero bracket), and two rate brackets above the exemption. In that case, the second bracket rate should be higher than the first. In other words, without demogrants the optimal two-bracket tax system has progressive marginal rates. Thus the reliance on optimal tax analysis by flat tax proponents is inappropriate, if those proponents do not also support demogrants. The paper also surveys the optimal tax literature for other indications progressive marginal rates may be optimal under non-standard assumptions. In particular, progressive marginal rates may be optimal (even in the context of demogrants) if people care about relative levels of consumption, if there is significant wage uncertainty, or if the distribution of wage rates is different from that usually assumed.

Tax Evasion By Misinforming Withholding Agents

This article inquires into a wage earner's decision to evade taxes by splitting his or Abstract her work efforts between several jobs while misinforming his or her employers regarding employment elsewhere. Under exact or approximate withholding by progres sive marginal rates, this behavior, accompanied by the failure to file a tax return, results in the application of lower tax brackets to earnings. This article characterizes the properties of the worker's effort allocation problem under progressive withhold ing, showing that exact withholding, considered to be more costly to administer than approximate withholding, might also be, contrary to common belief, equally and even more evadable than the latter.