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CopyrightGruber
2010 Fourth
WorthEdition
Publishers
Copyright 2012 Worth Publishers
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18
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C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.1
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Types of Taxation
Taxes on Earnings
o Payroll tax: A tax levied on income
earned on ones job.
Taxes on Individual Income
o Individual income tax: A tax paid on
individual income accrued during the
year.
o Capital gains: Earnings from selling
capital assets, such as stocks, paintings,
and houses.
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.1
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Types of Taxation
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18.1
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Taxes on Consumption
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.1
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
42%
State
and
Local
20%
35
13
3
0
7
0
4
34
33
9
Federa
l
Individual income taxes
Social insurance
contributions
(payroll tax)
Corporate taxes
Consumption tax
Property tax
Other
Tota
l
34%
24
10
14
11
7
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.1
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
OECD
Norw Denma
Averag
ay
rk
e
Individual income taxes 24%
55%
25%
Social insurance
contributions
(payroll tax)
23
2
27
Corporate taxes
22
5
8
Consumption tax
26
30
31
Property tax
3
4
5
Other
2
4
4
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Gross income
Deductions
= Adjusted gross income (AGI)
= Taxable income
Find taxes owed from tax schedule
= Total tax payment
= Final payment (refund) due
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.2
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.3
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.3
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.3
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.3
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.4
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.4
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.4
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.4
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Housing
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Efficiency Considerations
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Equity Considerations
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.5
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Tax Expenditure
Employer-provided health
insurance
Home mortgage interest
deduction
Amount
(Millions)
$180,580
100,910
Exclusion of pension/401(k)
contributions
72,740
51,080
Deductibility of charitable
contributions
39,770
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.6
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.6
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
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C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
18.6
Individ Individu
Family Tax
ual
al Tax with Individual
Income
Filing
Michell
e
$140,00
0
$32,000
Barack
10,000
1,000
Bill
75,000
13,000
Hilary
75,000
13,000
35,000
26,000
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.6
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.6
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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18.7
C H AP T E R 1 8 TAXAT I O N I N T H E U N I T E D S TAT E S AN D AR O U N D T H E W O R L D
Conclusion
Public Finance and Public Policy Jonathan Gruber Fourth Edition Copyright 2012 Worth Publishers
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