曼昆微观经济学第五版第八章课文英文版课件.ppt

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1、Application:The Costs of TaxationChapter 8Copyright 2001 by Harcourt,Inc.Allrightsreserved.Requestsforpermissiontomakecopiesofanypartoftheworkshouldbemailedto:PermissionsDepartment,HarcourtCollegePublishers,6277SeaHarborDrive,Orlando,Florida32887-6777.Harcourt,Inc.itemsandderiveditemscopyright2001by

2、Harcourt,Inc.The Costs of TaxationHow do taxes affect the economic well-being of market participants?Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Costs of TaxationIt does not matter whether a tax on a good is levied on buyers or sellers of the goodthe price paid by buyers rises,a

3、nd the price received by sellers falls.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Effects of a Tax.Price0QuantityQuantity without taxSupplyDemandPrice without taxPrice buyers payQuantity with taxSize of taxPrice sellers receiveHarcourt,Inc.itemsandderiveditemscopyright2001byHar

4、court,Inc.The Effects of a TaxuA tax places a wedge between the price buyers pay and the price sellers receive.uBecause of this tax wedge,the quantity sold falls below the level that would be sold without a tax.uThe size of the market for that good shrinks.Harcourt,Inc.itemsandderiveditemscopyright2

5、001byHarcourt,Inc.Tax RevenueT=the size of the taxQ=the quantity of the good soldT Q=the governments tax revenueHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Revenue.Price0QuantityQuantity without taxSupplyDemandPrice sellers receiveQuantity with taxSize of tax(T)Quantity sold(Q)T

6、ax Revenue(T x Q)Price buyers payHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.How a Tax Affects Welfare.Quantity0PriceDemandSupplyQ1ABCFDEQ2Tax reduces consumer surplus by(B+C)and producer surplus by(D+E)Tax revenue=(B+D)Deadweight Loss=(C+E)Price buyerspay=PB P1Price without tax=PSP

7、rice sellers receive=Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Changes in Welfare from a TaxWithout TaxWith TaxChangeConsumer SurplusA+B+CA-(B+C)Producer SurplusD+E+FF-(D+E)Tax RevenuenoneB+D+(B+D)Total SurplusA+B+C+D+E+FA+B+D+F-(C+E)The area C+E shows the fall in total surplus an

8、d is the deadweight loss of the tax.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.How a Tax Affects WelfareThe change in total welfare includes:uThe change in consumer surplus,uThe change in producer surplus,uThe change in tax revenue.uThe losses to buyers and sellers exceed the reven

9、ue raised by the government.uThis fall in total surplus is called the deadweight loss.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Losses and the Gains from TradeTaxes cause deadweight losses because they prevent buyers and sellers from realizing some of the gains from tra

10、de.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Deadweight Loss.Quantity0Price DemandSupplyQ1PBPrice =P1without tax PSQ2Size of taxLost gains from tradeCost to sellersValue to buyersReduction in quantity due to the taxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.D

11、eterminants of Deadweight LossWhat determines whether the deadweight loss from a tax is large or small?uThe magnitude of the deadweight loss depends on how much the quantity supplied and quantity demanded respond to changes in the price.uThat,in turn,depends on the price elasticities of supply and d

12、emand.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.QuantityPriceDemandSupply0When supply isrelatively inelastic,the deadweight loss of a tax is small.(a)Inelastic SupplySize of taxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distor

13、tions and Elasticities.QuantityPriceDemandSupply0Size of taxWhen supply isrelatively elastic,the deadweight loss of a tax is large.(b)Elastic SupplyHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.QuantityPriceDemandSupply0When demand isrelatively inelast

14、ic,the deadweight loss of a tax is small.(c)Inelastic DemandSize of taxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.QuantityPriceDemandSupply0Size of taxWhen demand isrelatively elastic,the deadweight loss of a tax is large.(d)Elastic DemandHarcourt,I

15、nc.itemsandderiveditemscopyright2001byHarcourt,Inc.Determinants of Deadweight LossThe greater the elasticities of demand and supply:u the larger will be the decline in equilibrium quantity and,u the greater the deadweight loss of a tax.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The

16、 Deadweight Loss DebateSome economists argue that labor taxes are highly distorting and believe that labor supply is more elastic.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Deadweight Loss DebateSome examples of workers who may respond more to incentives:uWorkers who can adjust

17、 the number of hours they workuFamilies with second earnersuElderly who can choose when to retireuWorkers in the underground economy(i.e.those engaging in illegal activity)Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue as Taxes VaryWith each increase in

18、the tax rate,the deadweight loss of the tax rises even more rapidly than the size of the tax.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue.PBQuantityQ20PriceQ1DemandSupplyTax revenuePSDeadweightloss(a)Small TaxHarcourt,Inc.itemsandderiveditemscopyright2

19、001byHarcourt,Inc.DemandSupplyTaxrevenuePBQuantityQ20PriceQ1PSDeadweightlossDeadweight Loss and Tax Revenue.(b)Medium TaxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax revenuePBQuantityQ20PriceQ1DemandSupplyPSDeadweightlossDeadweight Loss and Tax Revenue.(c)Large TaxHarcourt,Inc.it

20、emsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax RevenueuFor the small tax,tax revenue is small.uAs the size of the tax rises,tax revenue grows.uBut as the size of the tax continues to rise,tax revenue falls because the higher tax reduces the size of the market.Harcourt,Inc.item

21、sandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue Vary with the Size of the Tax.(a)Deadweight LossDeadweightLoss0Tax SizeHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue Vary with the Size of the Tax.(b)Revenue(the Laffer curve)Ta

22、xRevenue0Tax SizeHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue Vary with the Size of the TaxuAs the size of a tax increases,its deadweight loss quickly gets larger.uBy contrast,tax revenue first rises with the size of a tax;but then,as the tax gets larg

23、er,the market shrinks so much that tax revenue starts to fall.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Laffer Curve and Supply-Side EconomicsuThe Laffer curve depicts the relationship between tax rates and tax revenue.uSupply-side economics refers to the views of Reagan and L

24、affer who proposed that a tax cut would induce more people to work and thereby have the potential to increase tax revenues.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.SummaryuA tax on a good reduces the welfare of buyers and sellers of the good.And the reduction in consumer and prod

25、ucer surplus usually exceeds the revenues raised by the government.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.SummaryuThe fall in total surplus the sum of consumer surplus,producer surplus,and tax revenue is called the deadweight loss of the tax.Harcourt,Inc.itemsandderiveditemscop

26、yright2001byHarcourt,Inc.SummaryuTaxes have a deadweight loss because they cause buyers to consume less and sellers to produce less.uThis change in behavior shrinks the size of the market below the level that maximizes total surplus.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Summar

27、yuAs a tax grows larger,it distorts incentives more,and its deadweight loss grows larger.uTax revenue first rises with the size of a tax.uEventually,however,a larger tax reduces tax revenue because it reduces the size of the market.Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Graphic

28、al ReviewHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Effects of a Tax.Price0QuantityQuantity without taxSupplyDemandPrice without taxPrice buyers payQuantity with taxSize of taxPrice sellers receiveHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Revenue.Price0Qu

29、antityQuantity without taxSupplyDemandPrice sellers receiveQuantity with taxSize of tax(T)Quantity sold(Q)Tax Revenue(T x Q)Price buyers payHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.How a Tax Affects Welfare.Quantity0PriceDemandSupplyQ1ABCFDEQ2Tax reduces consumer surplus by(B+C)a

30、nd producer surplus by(D+E)Tax revenue=(B+D)Deadweight Loss=(C+E)Price buyerspay=PB P1Price without tax=PSPrice sellers receive=Harcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Deadweight Loss.Quantity0Price DemandSupplyQ1PBPrice =P1without tax PSQ2Size of taxLost gains from tradeCos

31、t to sellersValue to buyersReduction in quantity due to the taxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.QuantityPriceDemandSupply0When supply isrelatively inelastic,the deadweight loss of a tax is small.(a)Inelastic SupplySize of taxHarcourt,Inc.i

32、temsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.QuantityPriceDemandSupply0Size of taxWhen supply isrelatively elastic,the deadweight loss of a tax is large.(b)Elastic SupplyHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.Q

33、uantityPriceDemandSupply0When demand isrelatively inelastic,the deadweight loss of a tax is small.(c)Inelastic DemandSize of taxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax Distortions and Elasticities.QuantityPriceDemandSupply0Size of taxWhen demand isrelatively elastic,the dead

34、weight loss of a tax is large.(d)Elastic DemandHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue.PBQuantityQ20PriceQ1DemandSupplyTax revenuePSDeadweightloss(a)Small TaxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.DemandSupplyTaxrevenuePBQuan

35、tityQ20PriceQ1PSDeadweightlossDeadweight Loss and Tax Revenue.(b)Medium TaxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Tax revenuePBQuantityQ20PriceQ1DemandSupplyPSDeadweightlossDeadweight Loss and Tax Revenue.(c)Large TaxHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue Vary with the Size of the Tax.(a)Deadweight LossDeadweightLoss0Tax SizeHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Deadweight Loss and Tax Revenue Vary with the Size of the Tax.(b)Revenue(the Laffer curve)TaxRevenue0Tax Size