Dynamic scoring: Alternative financing schemes

• 成果类型: Article
• 署名作者: Leeper, Eric M.; Yang, Shu-Chun Susan
• 署名单位: Indiana University System; Indiana University Bloomington; National Bureau of Economic Research; Academia Sinica - Taiwan
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2007.04.011
• 发表日期: 2008
• 页码: 159-182
• 关键词: dynamic scoring; Laffer curve; Capital tax; labor tax; debt management

摘要

Neoclassical growth models predict that reductions in capital or labor income tax rates are expansionary when lump-sum transfers are used to balance the government budget. This paper explores the consequences of bond-financed tax reductions that bring forth a range of possible offsetting policies, including future government consumption, capital tax rates, or labor tax rates. Through the resulting intertemporal distortions, current tax cuts can be expansionary or contractionary. The paper also finds that more aggressive responses of offsetting policies to debt engender less debt accumulation and less costly tax cuts. (C) 2007 Elsevier B.V. All rights reserved.