Wednesday, November 11, 2020

NYU Tax Policy Colloquium, week 11: Owen Zidar's "The Tax Elasticity of Capital Gains and Revenue-Maximizing Rates, part 1

Yesterday at the colloquium we discussed with Owen Zidar the above work (coauthored with Ole Agersnap), along with a preliminary draft of a short piece (coauthored with Natasha Sarin, Larry Summers, and Eric Zwick) entitled "Rethinking How We Score Capital Gains Tax Reform."

The work's main finding is that capital gains realizations are far less tax-elastic than the current conventional wisdom, including that of the Congressional Joint Committee on Taxation (JCT), has assumed. Hence, for example:

--The revenue-maximizing tax rate for capital gains lies between 33% and 47%, whereas currently it is just the sum of (a) 20%, plus (b) the 3.8% Medicare payroll tax if one is subject to it, plus (c) any state and local income tax liability that one faces with respect to capital gains.

--A 5% increase in the capital gains tax rate would raise $18 billion to $30 billion in annual revenue. By contrast, the JCT, which assumes far higher tax elasticity for capital gains and thus a far lower revenue-maximizing rate, might score this as being close to a revenue wash.

--Under plausible median assumptions, raising the capital gains high to the neighborhood of the top individual rate (under current law or pre-2017) might raise as much as $1 trillion over ten years, whereas the JCT would likely come up with a number in the ballpark of $80 billion.

This work obviously has major implications for how we might think about tax law changes that could conceivably be on the table in the next few years (especially if the Democrats win both Georgia Senate runoff elections). If accepted by the JCT it might also have a huge impact on the legislative process, given the important role that official revenue estimates can play.

The paper relies mainly on data over the last several decades concerning state-level capital gains rate changes, since there are far more of these than federal changes. But it also offers a set of reasons why JCT estimates may be systematically too low. For example:

--Capital gains that are locked in, rather than being currently realized by reason of a CG rate hike may be realized several years later, rather than being deferred until death (at which point they would disappear from the tax base given Code section 1014, the step-up in basis at death).

--The composition of capital gains has changed over time, reducing their tax elasticity. In particular, the rice of pass-throughs such as hedge funds that generate a lot of capital gain but have a business model requiring regular realization has had this effect.

--Substitution by taxpayers between generating capital gains and ordinary income means that higher CG rates may boost other tax revenue, as taxpayers shift away from taking advantage of the lower CG rate.

--Legal changes, such as the enactment of section 1259 (treating certain transactions as constructive sales) have made it less feasible and realistic for taxpayers holding appreciated assets to defer CG realization indefinitely, or even just until death.

I found the papers' empirical analysis and reasoning to be highly plausible. Note also that Zidar should have a lot of credibility on this potentially politically fraught topic - e.g., his work on high-end inequality tends to find less wealth concentration at the top than that of, say, Saez and Zucman. So, if he were to invoke the oft-abused metaphor of the umpire who merely calls the balls and strikes as he sees them, he would be far more believable than certain others who have invoked it in the past.

I'll close here, but add a follow-up post that mentions some broader conceptual issues that the work brought to mind.

11 comments:

ABC Trekking said...

Annapurna Base Camp Trekking is also call Annapurna Sanctuary Trekking as is an brilliant stroll thru diverse landscape and subculture complete with prosperous mountain vistas, terraced fields, quaint Gurung villages and a vast range of flowers and fauna during your trip with Treks Himalaya. Get the view of over three dozens of mountains trekking in Nepal. Mt. Annapurna (8091m) of Nepal is the tenth best possible mountain in the world and the journey to its base camp, which is at 4130m height, is one of the most popular walks on earth. The Annapurna Base Camp Trek is one of the most famous treks in Annapurna region of Nepal trekking. Moreover, we reach our destination by way of Mt. Machapuchhre (Fishtail) which is revered with the aid of the Nepalese for its special beauty and most popular treks in the world. https://www.trekshimalaya.com/annapurna-base-camp-trekking.php

Furthermore nicely groomed itinerary of this trekking it is a famous preference amongst various outside enthusiasts, from a solo lady tourist to hikers visiting in agencies to Nepal. Many landscapes and convey you so shut to the base of 7,000 and 8,000 meter peaks in a such a quick duration of time as this trek is the combination of easy walking trail along the various landscape, forests, water resources, villages and mountains. After an exploration day in Kathmandu, fly alongside the Himalayan Range to the lake town of Pokhara below the Annapurnas. Spend an afternoon exploring the town and strolling along the lake shore. Trail takes trekkers to base camp of tenth tallest mountain of the world Mt. Annapurna (8091 m).

This Annapurna Sanctuary Trek presents a comprehensive exploration of the most hanging area in the 50 km Annapurna Range. This trekking package is designed to aid acclimatization with reasonable daily altitude increases. Setting of Annapurna Base Camp at 4130 m is unique and fairly spectacular, set amidst the majestic peaks of Annapurna I (8091 m), Annapurna South (7219 m), Machapuchhre (6993 m) and Hiunchuli (6441 m). ABC (4130 m) along the Machhapuchhre Base Camp is the ultimate destination for the trekkers in which the panoramic view of mountains never fail to dazzle. It’s ignored with the aid of the domineering peaks of Annapurna (8091m) and Machhapuchchhre (6993m), meaning “Fishtail” for its distinct summit.

14 days Annapurna Base Camp Trekking itinerary

Day 01:- Kathmandu-Pokhara (820m.) by drive 6 to 8 hrs, air 25 minute O/N hotel.
Day 02:- Drive to Nayapul same day Tikhedhunga (1540m.) 4 hrs walk O/N hotel.
Day 03:- Tikhedhunga-Ghorepani (2850m.) 6 hours walk and overnight hotel.
Day 04:- Climb up to Poon Hill (3210m.) in the morning, see sunrise in 180 degree
back down to hotel in Ghorepani & trek to Tadapani (2590m.) 6 hrs walk O/N hotel.
Day 05:- Tadapani-Chhomrong (2340m.) 5 hours walk and overnight hotel.
Day 06:- Chhomrong-Himalaya Hotel (2920m.) 6 hours walk and overnight hotel.
Day 07:- Himalaya Hotel-Annapurna Base Camp (4130m.) 6-7 hrs walk O/N hotel.
Day 08:- Morning view from ABC and trek to Bamboo (2335m.) 6 hrs walk O/N hotel.
Day 09:- Bamboo-Jhinu (1780m.) 5 hours walking and overnight hotel.
Day 10:- Rest day in Jhinu and enjoy with hot spring and overnight hotel.
Day 11:- Jhinu-Ghandruk (1940m.) 4 hours walking and overnight hotel.
Day 12:- Ghandruk-Deurali (2000m.) 6 hours walking and overnight hotel.
Day 13:- Deurali-Dhampus Phedi (1130m.) walk & drive to Pokhara 5 hrs O/N hotel.
Day 14:- Pokhara-Kathmandu by drive 6 to 8 hours, air 25 minute O/N hotel.

Further information contact below:-

Treks Himalaya Pvt. Ltd.
P.O.Box: 23044, Tarakeshwor-5,
Lolang, Kathmandu, Nepal
Phone: 0097715169092
Mobile: 009779841433205
guidenepal@gmail.com
https://www.trekshimalaya.com

micheal pan said...


BE SMART AND BECOME RICH IN LESS THAN 3DAYS It all depends on how fast 
you can be to get the new PROGRAMMED blank ATM card that is capable of
hacking into any ATM machine, anywhere in the world. I got to know about 
this BLANK ATM CARD when I was searching for job online about a month 
ago It has really changed my life for good and now I can say I'm rich and 
I can never be poor again. The least money I get in a day with it is about 
$50,000.(fifty thousand USD) Every now and then I keeping pumping money 
into my account. Though is illegal,there is no risk of being caught 
,because it has been programmed in such a way that it is not traceable,it 
also has a technique that makes it impossible for the CCTVs to detect 
you. For details on how to get yours today, email the hackers on :
atmmachinehackers1@gmail.com Tell your 
loved once too, and start to live large. That's the simple testimony of how 
my life changed for good. Love you all . the email address again is
atmmachinehackers1@gmail.com

Unknown said...

I can vouch for him because I have used him to monitor my husband many time when I feel suspicious about his movements TALENTED HACKERS DO YOU REQUIRE A CERTIFIED HACKER FOR : +University grades hack, +Bank account hacks, +Control devices remotely hack, +Facebook Hacking Tricks, +Gmail, AOL, Yahoomail, inbox, hack are available, +Database hacking, +PC computer tricks +Bank transfer, Western Union, money gram, Credit Card transfer +Wiping of credit, +VPN software, +ATM Hack we are the real deal when it comes to hacking, carding, WU transfer, Money Gram transfer etc contact us now on : ETHICALHACKERS009@GMAIL.COMcontact him for all kind of hacking job and you will be glad you did whatsapp+12132951376

Dave said...

Excellent and professional investigative services. I hired Mr James for a very private and difficult matter of hacking my wife's phone and he far exceeded my expectations. He helped me get some info such as whatsapp, facebook, text messages, call logs and even phone conversations that I needed for proof of his secretive affair. The first time we spoke, we had a very long phone consultation in which he gave me all my options that he could think of to resolve my case, and he even recommended I try other options before hiring him, which shows that he is honest. I decided to hire him and I am glad I did. He is a fantastic investigator and a great person; to all loyal partners out there if you have a dishonest partner don't hesitate to send him a mail Contact: BESTAPPSHACKERS@GMAIL.COM.
WHATSAPP: +16026094730.

Unknown said...

Are you interested in any kinds of hacking services?
Feel free to contact TECHNECHHACKS.

For years now we’ve helped so many organizations and companies in hacking services.
TECHNECHHACKS is a team of certified hackers that has their own specialty and they are five star rated hackers.

We give out jobs to hackers (gurus only) to those willing to work, with or without a degree, to speed up the availability of time given to jobs!!

Thus an online binary decoding exam will be set for those who needs employment under the teams establishment.


we deal with the total functioning of sites like,


• SOCIAL MEDIA (Facebook, Twitter, Instagram, Snapchat, google hangout etc.)

• SCHOOL GRADES

• IOS/OS

• CREDIT SCORES

• BANK ACCOUNTS

• SPOUSES PHONE

Our special agents are five star rated agents that specializes in the following, and will specially be assigned to you for a special job well DONE.

• WESTERN UNION TRANSFER

• CREDIT CARDS INSTALLATION

• MONEY FLIPPING

• CRIMINAL RECORDS

• BTC RECOVERY

• BTC MINING

• BTC INVESTMENT

Thus bewere of scammers because most persons are been scammed and they ended up getting all solutions to their cyber bullies and attacks by US.

I am Jason williams one of the leading hack agent.

PURPOSE IS TO GET YOUR JOBS DONE AT EXACTLY NEEDED TIME REQUESTED!!!



And our WORK SUCCESS IS 100%!!!



We’re always available for you when you need help.

Contact or write us on:

Technechhacks@gmail.com

SIGNED....!

Jason. W

TECHNECHHACKS
2021©️All Right Reserved

loan said...


Do you need Personal Finance?
Business Cash Finance?
Unsecured Finance
Fast and Simple Finance?
Quick Application Process?
Finance. Services Rendered include,
*Debt Consolidation Finance
*Business Finance Services
*Personal Finance services Help
contact us today and get the best lending service
personal cash business cash just email us below
Contact Us: financialserviceoffer876@gmail.com
call or add us on what's app +918929509036

Brittany Seiber said...

To know more about Chief Dr Lucky you can visit his website (https://chiefdrluckyherbaltherapy.wordpress.com/)
 
 A friend that suffered from Herpes and was cure with the help of this great herbal doctor Chief Lucky so i decided to contact him for help in getting rid of my families genital herpes virus 1/2 which i did and all i was told to provide was just some useful information and some materials used in preparation of the natural cure and that i did and now i am the happiest person on earth because i am writing this testimony of mine with joy and happiness in my heart to the whole world to know that natural remedy is real because i am a living testimony of Chief Lucky traditional herbal cure and i want you all to contact Chief Lucky via his email: chiefdrlucky@gmail.com or WhatsApp him +2348132777335 am sure he will help you too.

micheal pan said...

BE SMART AND BECOME RICH IN LESS THAN 3DAYS....It all depends on how fast 
you can be to get the new PROGRAMMED blank ATM card that is capable of
hacking into any ATM machine,anywhere in the world. I got to know about 
this BLANK ATM CARD when I was searching for job online about a month 
ago..It has really changed my life for good and now I can say I'm rich and 
I can never be poor again. The least money I get in a day with it is about 
$50,000.(fifty thousand USD) Every now and then I keeping pumping money 
into my account. Though is illegal,there is no risk of being caught 
,because it has been programmed in such a way that it is not traceable,it 
also has a technique that makes it impossible for the CCTVs to detect 
you..For details on how to get yours today, email the hackers on : (
atmmachinehackers1@gmail.com ). Tell your 
loved once too, and start to live large. That's the simple testimony of how 
my life changed for good...Love you all ...the email address again is ;
atmmachinehackers1@gmail.com

Packers and Movers Gurgaon said...

An awesome blog thanks a lot for giving me this great opportunity to write on this.please visit our website I assure you that it will be very useful for you @ Packers And Movers Gurgaon

Ric Clayton said...

I really want to thank Dr Emu for saving my marriage. My wife really treated me badly and left home for almost 3 month this got me sick and confused. Then I told my friend about how my wife has changed towards me. Then she told me to contact Dr Emu that he will help me bring back my wife and change her back to a good woman. I never believed in all this but I gave it a try. Dr Emu casted a spell of return of love on her, and my wife came back home for forgiveness and today we are happy again. If you are going through any relationship stress or you want back your Ex or Divorce husband you can contact his whatsapp +2347012841542 or email emutemple@gmail.com website: Https://emutemple.wordpress.com/ Https://web.facebook.com/Emu-Temple-104891335203341

FIRMWARE HACKS said...

It Tears me Up Whenever we receive complaints from Clients About Their Experience With the Hackers They Met Before They Heard about us.
These Days There Are alot of Hackers Online, You Just Have to Be Careful about who you meet for help, because many people now don't know who to ask for help anymore but there's actually a solution to that which I am giving you for free, Don't go out there seeking for Hackers Yourself, Because the probability of getting a Real Hacker Out there Is Very Slim . ❌❌ ❌ Most Of Them are actually not who they say they're, they are just here to Rip people Off, You Can Always Identify Them With Their False Advertisements and False Testimonies Trying To Lure you Into their Arms, And most of them use yahoomails, gmails and other cheaper email providers which could easily expose their vulnerabilities, Please Don’t Fall For Them🚷 Come To Think Of It, Why would a Legit Hacker Be using a gmail or a cheap email provider that exposes his vulnerabilities????⚠️⚠️⚠️
Well, Our Purpose Here Is To Link You Up With Top Legit Hackers With Great Online Reputations and Impressive LinkedIn Profiles That’ll Blow Your Mind.

☑️ COMPOSITE FIRMWARE SECURITY SPECIALISTS is here to Provide you with The Best Hackers, So you can get saved from The Arms of the Fake Hackers❌❌.


☑️All our Specialists are well experienced in their various niches with Great Skills, Technical Hacking Strategies And Positive Online Reputations And Recommendations🔘
They hail from a proven track record and have cracked even the toughest of barriers to intrude and capture all relevant data needed by our Clients.

We have Digital Forensic Specialists, Certified Ethical Hackers, Software Engineers, Firmware Security Experts, Private investigators and more. Our Goal is to make your digital life secure, safe and hassle free by Linking you Up With these great Professionals such as JACK CABLE, ARNE SWINNEN, SEAN MELIA, DAWID CZAGAN, BEN SADEGHIPOUR And More. These Professionals are Well Reserved Professionals who are always ready to Handle your job with great energy and swift response so that your problems can be solved very quickly.
All You Need to Do is to send us a mail and we’ll Assign any of these specialists to Handle your Job immediately.

☑️ Below Is A Full List Of Our Services:
▪️ FUNDS RECOVERY ON SCAM INVESTMENTS, BINARY OPTIONS TRADING and ALL TYPES OF SCAMS.
▪️ WEBSITE AND DATABASE HACKING 💻
▪️ CREDIT REPAIR. 💳
▪️ PHONE HACKING & CLONING (giving you 📱 Unnoticeable access to everything Happening on the Target’s Phone)
▪️ CLEARING OF CRIMINAL RECORDS ❌
▪️ SOCIAL MEDIA ACCOUNTS HACKING 📱
▪️RECOVERY OF DELETED FILES 📤
▪️LOCATION TRACKING 📌
▪️BITCOIN MINING ⛏ And lot More.


☑️ CONTACT:
.....
firmwarehacks@gmail.com
🔘2021 © composite firmware specialists
🔘Want faster service? Contact us!
🔘All Rights Reserved ®️