Masaaki Homma

A comparative static analysis of tax incidence

Abstract The model presented by Harberger (1962) in his famous article has received a good deal of attention from economists concerned with the incidence of taxes in a general equilibrium setting. Through problems posed by using the Harberger model have been frequently pointed out by several authors, no attempt has been made to generalize the model to deal adequately with the tax incidence problem. This paper aims to follow a new method of conducting a comparative static analysis of tax incidence, and to extend the results derived by earlier contributions in a more general context.

A dynamic analysis of the differential incidence of capital and labour taxes in a two-class economy

Abstract This paper studies a differential incidence model, where a rise in a capital tax is accompanied by a change in a labour tax to hold constant the per capita government revenue, in a two-class growing economy. The major concern is to analyse the conditions necessary for the burden of such a tax substitution to fall solely, partially, or inconsequentially on capitalists or workers. The results obtained indicate that a higher rate of capital tax tends to impose a greater burden on workers.

On the theory of interregional tax incidence

Abstract The state of factor income distribution prevailing in a local jurisdiction may be greatly influenced by the change in tax policies carried out by some other local jurisdictions through the market mechanism. The theory of interregional tax incidence is concerned with the problem of interactive distributional effects among local jurisdictions when each local government executes independently tax policies. This paper develops a new method of conducting a comparative static analysis on the current issue by making use of a general equilibrium model of interregional tax incidence characterized by the assumption that labor is perfectly immobile between different jurisdictions.

Japan's Tax Reform: Its Effects on the Tax Burden

A tax reform influences households in many ways. Income tax reform influences the disposable income of households, and a reform of indirect tax influences the prices of goods and services. Furthermore, the changes in disposable income or in prices are thought to influence the consumption behavior of households. When a tax reform is enacted, one must not only evaluate the impact of the reform ex post facto but also must analyze it ex ante facto. It is likely that such an analysis will stimulate debate over the reform and lead to a more desirable reform. A series of simulation analyses that Homma (1986) attempted in the tax reform project of the Policy Design Forum was conducted with this thought in mind.

A dynamic mobility model of individuals between jurisdictions in a system of local governments

Abstract This paper presents a dynamic mobility model in which individuals find incentives to move from one jurisdiction to another when they can enjoy a higher utility level by doing so, and inquires about welfare implications of the final outcome of such dynamic paths. The main conclusions are summarized as follows: (i) The mobility process of individuals is globally stable in the sense that the dynamic paths converge to the steady state equilibrium as time tends to infinity. (ii) There is a possible conflict between the principles of horizontal equity and Pareto optimality in the steady state of the dynamic system.

Consumption externalities and stability

Abstract This paper analyses the stability properties of simple general equilibrium models involving reciprocal consumption externalities and explores the relationship between stability and the anomalous behaviour noted by Diamond and Mirrlees (1973) and others.

A characteristic feature of the consumption-loan model

Abstract Samuelson provided an exact consumption-loan model of interest, and asserted, by way of an example, the impossibility theorem that the biological rate of interest with the optimality properties of the so-called golden rule can never be achieved dynamically through the consumption-loan market. Despite his contribution and those that followed, the important question remains as to whether the alleged instability of the biological rate of interest is of a more general nature. To date no definite conclusion is yet available. The purpose in this paper is to present a clear-cut view of the problem, and to clarify the key factors that validate or invalidate the impossibility theorem.

Japan's Tax Reform

A tax reform influences households in many ways. Income tax reform influences the disposable income of households, and a reform of indirect tax influences the prices of goods and services. Furthermore, the changes in disposable income or in prices are thought to influence the consumption behavior of households. When a tax reform is enacted, one must not only evaluate the impact of the reform ex post facto but also must analyze it ex ante facto. It is likely that such an analysis will stimulate debate over the reform and lead to a more desirable reform. A series of simulation analyses that Homma (1986) attempted in the tax reform project of the Policy Design Forum was conducted with this thought in mind.