Simulating Nonlinear Tax Rules and Nonstandard Behavior: An Application to the Tax Treatment of Charitable Contributions

This paper examines how the tax simulation method can be extended to incorporate nonlinear budget constraints and nonstandard economic behavior. We simulate the effect of extending the charitable deduction to nonitemizers and study the effect of alternative "floors". The specific simulations indicate that the econometric evidence on charitable giving implies that extending the charitable deduction to nonitemizers would raise individual giving by about 12 percent of the existing total amount or $4.5 billion at 1977 levels. The extension would reduce tax revenue by slightly less, about$4.1 billion. A floor of $300 or 3 percent of AGI would reduce the revenue loss by 30 to 40 percent, even if there is significant bunching. The effect of the floor on increased giving depends critically on whether taxpayers' behavior is guided by conventional demand principles or by the net altruism rule. A reasonable conclusion is that a floor would reduce giving by less than the increased revenue but that the difference between them would not be very large.

Comments and Discussion [The Measurement and Determination of Loanable-Funds Saving]

macroeconomics, saving, capital formation, interest

Social Security

This paper, a forthcoming chapter in the Handbook of Public Economics, reviews the theoretical and empirical issues dealing with Social Security pensions. The first part of the paper discusses pure pay-as-you-go plans. It considers the effects of introducing such a plan on the present value of consumption, the optimal level of benefits in such plans, and the emprical research on the effects of pay-as-you-go pension systems on labor supply and saving. The second part of the paper discusses the transition to investment-based systems, analyzing the effect on the present value of consumption of such a transition and considering such issues as the distributional effects and risk associated with such systems.

The Effective Field Theory of Dark Matter Direct Detection

We extend and explore the general non-relativistic effective theory of dark matter (DM) direct detection. We describe the basic non-relativistic building blocks of operators and discuss their symmetry properties, writing down all Galilean-invariant operators up to quadratic order in momentum transfer arising from exchange of particles of spin 1 or less. Any DM particle theory can be translated into the coefficients of an effective operator and any effective operator can be simply related to most general description of the nuclear response. We find several operators which lead to novel nuclear responses. These responses differ significantly from the standard minimal WIMP cases in their relative coupling strengths to various elements, changing how the results from different experiments should be compared against each other. Response functions are evaluated for common DM targets - F, Na, Ge, I, and Xe - using standard shell model techniques. We point out that each of the nuclear responses is familiar from past studies of semi-leptonic electroweak interactions, and thus potentially testable in weak interaction studies. We provide tables of the full set of required matrix elements at finite momentum transfer for a range of common elements, making a careful and fully model-independent analysis possible. Finally, we discuss embedding non-relativistic effective theory operators into UV models of dark matter.Comment: 32+23 pages, 5 figures; v2: some typos corrected and definitions clarified; v3: some factors of 4pi correcte

A Simple Explanation for DAMA with Moderate Channeling

We consider the possibility that the DAMA signal arises from channeled events in simple models where the dark matter interaction with nuclei is suppressed at small momenta. As with the standard WIMP, these models have two parameters (the dark matter mass and the size of the cross-section), without the need to introduce an additional energy threshold type of parameter. We find that they can be consistent with channeling fractions as low as about ~ 15%, so long as at least ~70% of the nuclear recoil energy for channeled events is deposited electronically. Given that there are reasons not to expect very large channeling fractions, these scenarios make the channeling explanation of DAMA much more compelling.Comment: 6 pages, 2 figure

Density Perturbations and the Cosmological Constant from Inflationary Landscapes

An anthropic understanding of the cosmological constant requires that the vacuum energy at late time scans from one patch of the universe to another. If the vacuum energy during inflation also scans, the various patches of the universe acquire exponentially differing volumes. In a generic landscape with slow-roll inflation, we find that this gives a steeply varying probability distribution for the normalization of the primordial density perturbations, resulting in an exponentially small fraction of observers measuring the COBE value of 10^-5. Inflationary landscapes should avoid this "\sigma problem", and we explore features that can allow them to do that. One possibility is that, prior to slow-roll inflation, the probability distribution for vacua is extremely sharply peaked, selecting essentially a single anthropically allowed vacuum. Such a selection could occur in theories of eternal inflation. A second possibility is that the inflationary landscape has a special property: although scanning leads to patches with volumes that differ exponentially, the value of the density perturbation does not vary under this scanning. This second case is preferred over the first, partly because a flat inflaton potential can result from anthropic selection, and partly because the anthropic selection of a small cosmological constant is more successful.Comment: 23 page

Non-relativistic effective theory of dark matter direct detection

Dark matter direct detection searches for signals coming from dark matter scattering against nuclei at a very low recoil energy scale ~ 10 keV. In this paper, a simple non-relativistic effective theory is constructed to describe interactions between dark matter and nuclei without referring to any underlying high energy models. It contains the minimal set of operators that will be tested by direct detection. The effective theory approach highlights the set of distinguishable recoil spectra that could arise from different theoretical models. If dark matter is discovered in the near future in direct detection experiments, a measurement of the shape of the recoil spectrum will provide valuable information on the underlying dynamics. We bound the coefficients of the operators in our non-relativistic effective theory by the null results of current dark matter direct detection experiments. We also discuss the mapping between the non-relativistic effective theory and field theory models or operators, including aspects of the matching of quark and gluon operators to nuclear form factors.Comment: 35 pages, 3 figures, Appendix C.3 revised, acknowledgments and references adde

The Cosmology of Composite Inelastic Dark Matter

Composite dark matter is a natural setting for implementing inelastic dark matter - the O(100 keV) mass splitting arises from spin-spin interactions of constituent fermions. In models where the constituents are charged under an axial U(1) gauge symmetry that also couples to the Standard Model quarks, dark matter scatters inelastically off Standard Model nuclei and can explain the DAMA/LIBRA annual modulation signal. This article describes the early Universe cosmology of a minimal implementation of a composite inelastic dark matter model where the dark matter is a meson composed of a light and a heavy quark. The synthesis of the constituent quarks into dark mesons and baryons results in several qualitatively different configurations of the resulting dark matter hadrons depending on the relative mass scales in the system.Comment: 31 pages, 4 figures; references added, typos correcte