Evidence on the insurance effect of marginal income taxes

Arbeitspapier

Marginal income taxes may have an insurance effect by decreasing the effective fluctuations of after-tax individual income. By compressing the idiosyncratic component o personal income fluctuations, higher marginal taxes should be negatively correlated with the dispersion of consumption across households, a necessary implication of an insurance effect of taxation. Our study empirically examines this negative correlation, exploiting the ample variation of state taxes across US states. We show that taxes are negatively correlated with the consumption dispersion of the within-state distribution of non-durable consumption and that this correlation is robust.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CFS Working Paper ; No. 2008/06

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Macroeconomics: Consumption; Saving; Wealth ; Taxation, Subsidies, and Revenue: General ; Fiscal Policies and Behavior of Economic Agents: Household
• Thema: Undiversifiable Earnings Risk ; Consumption Insurance ; Tax Distortions ; Grenzsteuersatz ; Einkommensteuer ; Verfügbares Einkommen ; Verdienstausfall ; Risiko ; Verbraucherausgaben ; USA

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Grant, Charles ; Koulovatianos, Christos ; Michaelides, Alexander ; Padula, Mario
• Ereignis: Veröffentlichung
• (wer): Goethe University Frankfurt, Center for Financial Studies (CFS)
• (wo): Frankfurt a. M.
• (wann): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/25541
• URN: urn:nbn:de:hebis:30-53239
• Letzte Aktualisierung: 10.03.2025, 11:46 MEZ