Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 408 Weeks Ago, 1 Day Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 03 Feb 2018 My Price 7.00

non-lump-sum taxation

Precautionary saving, non-lump-sum taxation, and Riparian equivalence. (Leland, 1968, and Barsky, Mania, and Zeldes, 1986.) Consider an individual who lives for two periods. The individual has no initial wealth and earns labor incomes of amounts Y1 and Y2 in the two periods. Y1 is known, but Y2 is random; assume for simplicity that E[Y2] = Y1. The government taxes income at rate τ1 in period 1 and τ2 in period 2. The individual can borrow and lend at a fixed interest rate, which for simplicity is assumed to be zero. Thus second-period consumption is  individual chooses C1 to maximize expected lifetime utility

(a) Find the first-order condition for C1.

(b) Show that E[C2] = C1 if Y2 is not random or if utility is quadratic.

(c) Show that if U (•) > 0 and Y2 is random, E[C2] > C1.

(d) Suppose that the government marginally lowers Ï„1 and raises Ï„2 by the same amount, so that its expected total revenue, Ï„1Y1 + Ï„2 E[Y2], is unchanged. Implicitly differentiate the first-order condition in part (a) to find an expression for how C1 responds to this change.

(e) Show that C1 is unaffected by this change if Y2 is not random or if utility is quadratic.

(f) Show that C1 increases in response to this change if U (•) > 0 and Y2 is random.

Answers

Maurice Tutor
(5)
Status NEW Posted 03 Feb 2018 08:02 PM My Price 7.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------acq-----------uis-----------iti-----------on -----------of -----------my -----------pos-----------ted----------- so-----------lut-----------ion-----------.Pl-----------eas-----------e p-----------ing----------- me----------- on-----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill----------- be-----------

Not Rated(0)