ORCID Profile
0000-0003-3791-6293
Current Organisation
Towson University
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Publisher: Elsevier BV
Date: 11-2017
Publisher: Elsevier BV
Date: 04-2009
Publisher: Elsevier BV
Date: 06-2022
Publisher: Oxford University Press (OUP)
Date: 14-02-2023
DOI: 10.1093/JEEA/JVAD010
Abstract: We study the optimal progressivity of personal income taxes in a general equilibrium overlapping generations model where in iduals are exposed to idiosyncratic shocks to labor productivity and health status over the lifecycle. Our results—based on a calibration to the US economy—indicate that both, the presence of health risk and the available insurance institutions, have a strong effect on the optimal level of tax progressivity. Given the fragmented and non-universal health insurance system in the US, a welfare maximizing income tax system is substantially more progressive than the current US income tax. The higher progressivity provides additional redistribution and social insurance, especially for unhealthy low income in iduals who have limited access to health insurance. When exposure to health risk is removed or reduced by introducing more comprehensive health insurance systems, we observe large decreases in the optimal level of income tax progressivity, and the optimal tax system resembles findings from the previous literature. These findings highlight the importance of accounting for the unique characteristics of health risk and the design of the health insurance system when characterizing optimal income taxes.
Publisher: Cambridge University Press (CUP)
Date: 03-2018
DOI: 10.1017/S1365100516000298
Abstract: We formulate an overlapping-generations model with household heterogeneity and productive and nonproductive government programs to study the macroeconomic and intergenerational welfare effects of risk premium shocks and government debt reductions. We demonstrate that in a small open economy with a high level of debt, a small increase in the risk premium of the interest rate leads to a substantial contraction in output and negative welfare effects. We then quantify the effects of reducing the debt-to-gross-domestic-product ratio using a wide range of fiscal austerity measures. Our results indicate trade-offs between short-run contractions and long-run expansions in aggregate output. In the short run, spending-based austerity reforms are worse than tax-based reforms in terms of lost income. However, in the long run, spending-based reforms produce higher output than tax-based reforms. In addition, welfare effects vary significantly across generations, skill groups, and working sectors. The current old and middle-aged generations experience welfare losses, whereas future generations are beneficiaries of the reforms.
Publisher: Springer Science and Business Media LLC
Date: 10-12-2013
Publisher: Elsevier BV
Date: 04-2016
Publisher: Elsevier BV
Date: 11-2012
No related grants have been discovered for Juergen Jung.