{"id":2424,"date":"2021-01-13T16:11:48","date_gmt":"2021-01-13T16:11:48","guid":{"rendered":"http:\/\/blogs.kent.ac.uk\/economics\/?p=2424"},"modified":"2021-01-13T16:18:49","modified_gmt":"2021-01-13T16:18:49","slug":"should-older-workers-pay-higher-taxes-than-younger-ones","status":"publish","type":"post","link":"https:\/\/blogs.kent.ac.uk\/economics\/2021\/01\/13\/should-older-workers-pay-higher-taxes-than-younger-ones\/","title":{"rendered":"Should older workers pay higher taxes than younger ones?\u00a0\u00a0\u00a0"},"content":{"rendered":"<p><span data-contrast=\"none\">In the article \u201cTaxation under Learning-by-doing,\u201d recently published in the Journal of Political Economy, Professors <a href=\"https:\/\/www.kent.ac.uk\/economics\/people\/2993\/www.kent.ac.uk\/economics\/people\/2993\/makris-miltos\">Makris<\/a> (University of Kent, UK) and <a href=\"https:\/\/economics.northwestern.edu\/people\/directory\/alessandro-pavan.html\">Pavan<\/a> (<\/span><span data-contrast=\"none\">Northwestern<\/span><span data-contrast=\"none\">\u00a0University, USA) argue that the average tax rate paid by earners in the age bracket 45-65 should be 5% higher than the average tax rate paid by workers in the age bracket 20-44.<\/span><\/p>\n<p><span data-contrast=\"none\">This policy prescription is obtained in a model that captures most of the key features of the US economy. In contrast to previous work, the result accounts for the fact that, because of learning-by-doing, workers tend to become more productive on average over their lifecycle the more they work when young.<\/span><\/p>\n<p><span data-contrast=\"none\">Makris and Pavan also show that reforming the current\u00a0<\/span><span data-contrast=\"none\">US\u00a0 tax<\/span><span data-contrast=\"none\">\u00a0code by adopting such tax differences across age brackets could bring welfare gains to each taxpayer equivalent to those brought in by a 4% increase in annual consumption throughout their entire work life.<\/span><\/p>\n<p><span data-contrast=\"none\">These gains are significant to warrant the policymakers\u2019 consideration and shape the debate on how to best reform existing tax codes in the US and other developed economies.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Makris\u00a0<\/span><span data-contrast=\"none\">met\u00a0<\/span><span data-contrast=\"none\">Pavan during a sabbatical leave when he visited\u00a0<\/span><span data-contrast=\"none\">Northwestern<\/span><span data-contrast=\"none\">\u00a0University and they began to talk about the issues addressed by their research.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201c<\/span><span data-contrast=\"none\">Our motivation was to understand the implications for the design of income tax code and the alleviation of inequality of\u00a0<\/span><span data-contrast=\"none\">taking into account<\/span><span data-contrast=\"none\">\u00a0that learning-by-doing is an important determinant of workers&#8217; productivity<\/span><span data-contrast=\"none\">.<\/span><span data-contrast=\"none\">\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.journals.uchicago.edu\/toc\/jpe\/0\/ja\"><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">Journal of Political Economy\u00a0<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the article \u201cTaxation under Learning-by-doing,\u201d recently published in the Journal of Political Economy, Professors Makris (University of Kent, UK) and Pavan (Northwestern\u00a0University, USA) argue &hellip; <a href=\"https:\/\/blogs.kent.ac.uk\/economics\/2021\/01\/13\/should-older-workers-pay-higher-taxes-than-younger-ones\/\">Read&nbsp;more<\/a><\/p>\n","protected":false},"author":66395,"featured_media":1852,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[94129,94130,70],"tags":[264,1426,237861,137045],"_links":{"self":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/2424"}],"collection":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/users\/66395"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/comments?post=2424"}],"version-history":[{"count":1,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/2424\/revisions"}],"predecessor-version":[{"id":2425,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/2424\/revisions\/2425"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/media\/1852"}],"wp:attachment":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/media?parent=2424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/categories?post=2424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/tags?post=2424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}