This article presents a new technique for analyzing tax reform proposals. The main idea is to add an optimizing numerical procedure to the NBER Tax Simulation Model. This procedure enables the user of the model to find the transformation curve between the targets of the proposed reform. The technique is illustrated by analyzing two alternative proposals to promote saving.
Get full access to this article
View all access options for this article.
References
1.
AuerbachA. J.KotlikoffL. J. (1980) National Savings, Economic Welfare, and the Structure of Taxation. Working Paper 805. Cambridge, MA: National Bureau of Economic Research.
2.
BoskinM. J. (1978) “Taxation, saving and the rate of interest.”J. of Pol. Economy (April): S3–S27.
3.
DaksA. (1972) “Algorithms for minimizing multivariate functions.” M.A. thesis, Hebrew University of Jerusalem.
4.
FeldsteinM.FrischD. (1977) “Corporate tax integration: The estimated effects on capital accumulation and tax distribution of two integration proposals.”National Tax J. 30 (March): 37–52.
5.
FletcherR. (1970) “A new approach to variable metric algorithms.”Computer J. 13: 317–322.
6.
KingM. A. (1980) “The distribution of gains and losses from changes in the tax treatment of housing.” Presented at the NBER Conference on Behavioral Simulation in Tax Policy, Sturbridge Village, October 3–4.
7.
PearsonJ. D. (1969) “Variable metric methods of minimization.”Computer J. 12: 171–178.
8.
PechmanJ. A. (1965) “A new tax model for revenue estimating,” in PeacockA. T.HauserG. (eds.) Government Finance and Economic Development. Paris: Organization for Economic Co-operation and Development.
9.
RosenH. S. (1976) “A methodology for evaluating tax reform proposals.”J. of Public Economics6 (June). 105–121.
10.
YitzhakiS. (forthcoming) “A tax programming model.”J. of Public Economics.
11.
YitzhakiS. (1975) “Personal taxation, incentives, and tax reform.” Ph.D. dissertation, Hebrew University of Jerusalem.
