holcombe 12
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Bahan Kuliah P.Point SDM untuk jurusan EKP Unsyiah dari Prof. Said dan Dr.Eddy. (Coba-coba posting :D)TRANSCRIPT
PUBLIC SECTOR ECONOMICS: The Role of Government in the American EconomyRandall Holcombe
12CHAPTER
Taxes on Economic Taxes on Economic TransactionsTransactions
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Excise Taxes, Unit Taxes, Excise Taxes, Unit Taxes, Ad Valorem TaxesAd Valorem Taxes
Excise tax Excise tax Placed on sale of specific good/servicePlaced on sale of specific good/service
Unit tax Unit tax Certain amount per unit of good soldCertain amount per unit of good sold
Ad valorem tax Ad valorem tax Fixed percentage of value of taxed Fixed percentage of value of taxed
goodsgoods
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Unit Taxes Versus Ad Unit Taxes Versus Ad Valorem TaxesValorem Taxes
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Unit Taxes Versus Ad Unit Taxes Versus Ad Valorem TaxesValorem Taxes
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Unit Taxes versus Ad Unit Taxes versus Ad Valorem TaxesValorem Taxes
Fluctuation in price of goodFluctuation in price of good Amount per unit from unit tax Amount per unit from unit tax
unchangedunchanged Amount per unit from ad valorem tax Amount per unit from ad valorem tax
fluctuatesfluctuates
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Unit Taxes and Ad Unit Taxes and Ad Valorem TaxesValorem Taxes
Advantages of unit taxes Advantages of unit taxes Amount of tax not affected by price of goodAmount of tax not affected by price of good
Disadvantages Disadvantages Favor expensive unitsFavor expensive units Inflation can have adverse effect on real taxInflation can have adverse effect on real tax
Advantages of ad valorem taxesAdvantages of ad valorem taxes Unaffected in real terms by inflationUnaffected in real terms by inflation
Disadvantages Disadvantages Less appropriate when value of a good cannot Less appropriate when value of a good cannot
be easily determinedbe easily determined
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Revenues from Excise Revenues from Excise TaxesTaxes
Small source of government revenueSmall source of government revenue Closely related to user charges at Closely related to user charges at
federal levelfederal level
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
User Charges and User Charges and EfficiencyEfficiency
Minimize excess burden of taxationMinimize excess burden of taxation Acts as price for public sector outputActs as price for public sector output Acts as rationing deviceActs as rationing device May be desirable even when May be desirable even when
marginal cost is zeromarginal cost is zero
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
User Charges and User Charges and Demand RevelationDemand Revelation
Allow producers to gauge consumer Allow producers to gauge consumer demanddemand
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
User Charges and EquityUser Charges and Equity
Satisfy benefit principle of taxationSatisfy benefit principle of taxation Disadvantages: redistributional Disadvantages: redistributional
programsprograms Difficult to determine who benefits and Difficult to determine who benefits and
how benefits are sharedhow benefits are shared Costly to charge user fees because of Costly to charge user fees because of
non-excludability non-excludability
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Approximating User Approximating User Charges in the Real Charges in the Real
WorldWorld User charges may be difficult to User charges may be difficult to
approximateapproximate User Charges as TaxesUser Charges as Taxes
Similar to market pricesSimilar to market prices Are among most effective and fair Are among most effective and fair
methods of taxation when feasiblemethods of taxation when feasible
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
User Charges and Public User Charges and Public EnterpriseEnterprise
Output can be provided more Output can be provided more efficiently when user fees employed efficiently when user fees employed as method of taxationas method of taxation
Revenues and User FeesRevenues and User Fees Makes up substantial amount of state Makes up substantial amount of state
and local government revenuesand local government revenues
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Import and Export TaxesImport and Export Taxes
Import duty (tariff) – tax levied on Import duty (tariff) – tax levied on imported goodsimported goods
Easy transactions to monitor and Easy transactions to monitor and collectcollect
Important source of revenue for less Important source of revenue for less developed countriesdeveloped countries
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Import Taxes and Trade Import Taxes and Trade RestrictionsRestrictions
Used in developed countries to Used in developed countries to discourage importsdiscourage imports
Trade barriers politically produced Trade barriers politically produced protection for domestic industriesprotection for domestic industries
Reduction of trade barriers would Reduction of trade barriers would increase value of total world outputincrease value of total world output
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
QuotasQuotas
Law restricting quantity of good that Law restricting quantity of good that can be importedcan be imported
No tax is collectedNo tax is collected Less beneficial than a tariff to publicLess beneficial than a tariff to public More beneficial to interest groupsMore beneficial to interest groups
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Effects of Quotas and Effects of Quotas and TariffsTariffs
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Trade AgreementsTrade Agreements
Established to keep trade barriers Established to keep trade barriers lowlow
Countries agree not to subsidize Countries agree not to subsidize exporting industriesexporting industries
GATT, WTO, EU, NAFTAGATT, WTO, EU, NAFTA
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
General Sales TaxesGeneral Sales Taxes
Ad Valorem tax on all retail salesAd Valorem tax on all retail sales Effects similar to an excise taxEffects similar to an excise tax
Restricts level of outputRestricts level of output Raises pricesRaises prices
Approximates tax on taxpayer’s level Approximates tax on taxpayer’s level of consumptionof consumption
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Is the Sales Tax Is the Sales Tax Regressive?Regressive?
Often viewed as regressive with Often viewed as regressive with respect to incomerespect to income
Should consider income over life Should consider income over life cyclecycle
Sales Taxes and the InternetSales Taxes and the Internet Cannot tax internet accessCannot tax internet access Fear that internet will lead to decline in Fear that internet will lead to decline in
state sales tax revenuesstate sales tax revenues Streamlined Sales Tax ProjectStreamlined Sales Tax Project
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Income and Substitution Income and Substitution EffectsEffects
Substitution effect Substitution effect Increased relative price causes Increased relative price causes
substitution from one good to anothersubstitution from one good to another Income effect Income effect
Effect of lowering an individual’s incomeEffect of lowering an individual’s income
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Possible Effects of a Possible Effects of a Consumption TaxConsumption Tax
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Turnover TaxesTurnover Taxes
Paid as fixed percentage of value of Paid as fixed percentage of value of transactiontransaction
Taxes all transactionsTaxes all transactions Inefficient, discourages transactionsInefficient, discourages transactions Encourages vertical integrationEncourages vertical integration
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Value Added Tax (VAT)Value Added Tax (VAT)
Tax on value added by each Tax on value added by each producer in economyproducer in economy
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
VAT versus Sales TaxVAT versus Sales Tax
VAT VAT Levied on suppliersLevied on suppliers No need to distinguish between retail No need to distinguish between retail
and wholesale purchasersand wholesale purchasers Sales taxSales tax
Levied on demandersLevied on demanders Easier to collectEasier to collect Easier to calculateEasier to calculate
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Value Added Tax in Value Added Tax in European UnionEuropean Union
European Community nations use a European Community nations use a VAT as major source of revenueVAT as major source of revenue
Taxes on goods and services are Taxes on goods and services are heavier than in the U.S.heavier than in the U.S.
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
Visibility of the TaxVisibility of the Tax
More difficult to evade a VATMore difficult to evade a VAT Taxpayers may be less resistant to Taxpayers may be less resistant to
paying the taxpaying the tax May be politically more popular than May be politically more popular than
a sales tax because its effects are a sales tax because its effects are more likely to be misunderstoodmore likely to be misunderstood