Category: Technical Notes
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Technical Note on the Economics of Taxing Capital Gains
This technical note describes how, under the current system of capital gains taxation, capital gain income is taxed at lower rates than labor income—and only upon realization of the gains and with a step-up in basis at death. This system distorts the economy and contributes to inequality. Lower tax rates on capital gains income do…
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Technical Note on Estimating the Overall Effect of Corporate Tax Reforms
This technical note first describes key differences between estimating the impact of a change in tax policy at the firm (microeconomic) level and at the overall (macroeconomic) level. It then explains how macroeconomic models are used to infer the overall effects of policy reforms and how alternative assumptions – such as the presence of market…