19The Equity Implications of Taxation Tax Incidence（课件）- 《财政与金融》同步教学（人民大学·第五版）

19 19.1 The Three Rules of Tax Incidence 19.2 Tax Incidence Extensions 19.3 General Equilibrium Tax Incidence 19.4 The Incidence of Taxation in the United States 19.5 Conclusion The Equity Implications of Taxation: Tax Incidence 1 of 46 1 Introduction In early 2002, with New Jersey facing a $5.3 billion budget gap, Governor James McGreevey called for changes in the state’s corporate tax system. The outdated system based corporate tax payments on the corporation’s profits earned in the state of New Jersey, thus encouraging businesses to use accounting tricks to shift reported profits to their subsidiaries in other states. As a result, 30 of the state’s 50 companies with the biggest payrolls each paid just $200 annually in corporate taxes. McGreevey wanted to institute a 1% tax on corporate gross sales in New Jersey to ensure that all corporations would pay tax. of 46 C H A P T E R 1 9 ■ T H E E Q U I T Y I M P L I C A T I O N S O F T A X A T I O N : T A X I N C I D E N C E 2 Introduction A version of the tax reform was eventually enacted, leading one company, Federated Department Stores, to publicly announce layoffs that they attributed to the tax increase. Governor McGreevey responded angrily, claiming that these statements were just a cover for those wealthy corporate owners who would really bear the brunt of this new tax: “All that we’re asking is that they pay their fair share: not a dollar more, not a dollar less. But when you have a CEO making $1.5 million and upwards of $14 million in stock options threatening people who are making $25,000, that’s what’s wrong.” of 46 C H A P T E R 1 9 ■ T H E E Q U I T Y I M P L I C A T I O N S O F T A X A T I O N : T A X I N C I D E N C E 3 Introduction The fundamental disagreement between the governor and the business community concerned who would ultimately pay this new tax. The business community claimed workers would bear the burden, while the governor claimed the burden would be shouldered