被称为税收的无谓损失.PPT

* The next few slides are adapted from the section “Case Study: The Deadweight Loss Debate” in this chapter of the textbook. The title of this slide is actually a direct quote from this section. I think it makes a catchier title for these slides than “the deadweight loss debate.” Why the marginal tax rate is relevant: One of the 10 Principles from Chapter 1 is “rational people think at the margin.” This applies to workers, as well. When Susan considers increasing her hours, she takes into account the extra income she’d earn from working a few more hours a week. The extra income on each additional hour equals the hourly wage minus the marginal tax rate. * According to this view, the DWL from labor taxes is small. This is relevant to the question “how big should the government be?”, because a high DWL would argue for restraining the size of government. * The textbook has an “In The News” box containing an excellent WSJ article on the effect of tax rates on work effort. * The new DWL is four times the initial DWL, even though the tax is just twice as large. * The new DWL is nine times the initial DWL, even though the tax is only three times as large. * The “implication” in the green box is not in the textbook, so it is not supported in the study guide or test bank. You may wish to delete it from this slide. If you keep it, note that the “harm” of raising taxes and the “benefit” of lowering them refer to the impact on total surplus. * When the tax is small (namely, equal to T), the shaded yellow rectangle represents tax revenue. When the tax equals 2T, the pink shaded box represents revenue. The pink shaded box is larger than the yellow box. * Raising the tax further – to 3T – causes revenue to fall. Revenue is now represented by the bluish-purple shaded box, which is smaller than the pink box. * The Laffer curves shown here and in the book are symmetric, and their peak occurs in the middle. You might mention to students that this n