Web Appendix to: How Does Charitable Giving Respond to Incentives and Income? New Estimates from Panel Data

This is the web appendix to "How Does Charitable Giving Respond to Incentives and Income? New Estimates from Panel Data," National Tax Journal, Vol. 62, no. 2, 2009, pp. 191-217.charitable donations, incentive effects of taxation

Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data

This paper presents summary statistics on the occupations of taxpayers in the top percentile of the national income distribution and fractiles thereof, as well as the patterns of real income growth between 1979 and 2005 for top earners in each occupation, based on information reported on U.S. individual income tax returns. The data demonstrate that executives, managers, supervisors, and financial professionals account for about 60 percent of the top 0.1 percent of income earners in recent years, and can account for 70 percent of the increase in the share of national income going to the top 0.1 percent of the income distribution between 1979 and 2005. During 1979-2005 there was substantial heterogeneity in growth rates of income for top earners across occupations, and significant divergence in incomes within occupations among people in the top 1 percent. We consider the implications for various competing explanations for the substantial changes in income inequality that have occurred in the U.S. in recent times. We then use panel data on U.S. tax returns spanning the years 1987 through 2005, to estimate the elasticity of gross income with respect to net-of-tax share (that is, one minus the marginal tax rate). Information on occupation allows us to control for other influences on income in a flexible way using interactions among occupation, position in the income distribution, stock prices, housing prices, and the business cycle. We also allow for income shifting across years in response to anticipated tax changes, for the long-run effect of a tax reform to differ from the short-run effects, for heterogeneous mean-reversion across incomes, and for heterogeneous elasticities across income classes. In a specification that does all this, we estimate a significant elasticity of 0.7 among taxpayers in the top 0.1 percent of the income distribution. Outside of the top 0.1 percent of the income distribution, we find no conclusive evidence of a positive elasticity of income with respect to net-of-tax shares. We find that the estimate for the top 0.1 percent is not robust to controlling for a spline in lagged income that is very flexible at the upper reaches of the income distribution, suggesting that the method used to allow for income dynamics is very important. Allowing for income shifting across years in response to anticipated tax changes has important consequences for the estimates.income distribution, behavioral response to taxation

Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States

This paper studies how cultural norms and enforcement policies influence illicit corporate activities. Using confidential IRS audit data, we show that corporations with owners from countries with higher corruption norms engage in higher amounts of tax evasion in the U.S. This effect is strong for small corporations and decreases as the size of the corporation increases. In the mid-2000s, the United States implemented several enforcement measures which significantly increased tax compliance. However, we find that these enforcement efforts were less effective in reducing tax evasion by corporations whose owners are from countries with higher corruption norms. This suggests that cultural norms can be a challenge to legal enforcement.

How Does Charitable Giving Respond to Incentives and Income? Dynamic Panel Estimates Accounting for Predictable Changes in Taxation

We estimate the elasticity of charitable giving with respect to its price and after-tax income using a panel of over 550,000 disproportionately high-income tax returns spanning the years 1979 through 2005. Improvements relative to the previous literature include: using state tax variation to help identify our model while controlling for both individual- and time-specific unobserved heterogeneity; carefully dealing with expectations; allowing people at different income levels to have different degrees responsiveness to taxation and different time paths of unobservable influences on giving; and using a measure of charitable giving that more closely approximates current donations. To address the omitted variable bias that would otherwise arise from failing to control for unobservable expectations of future prices and future incomes, we use predictable changes in future federal and state marginal tax rates and tax liabilities, arising from their pre-announced and phased-in nature, as instruments for future changes in prices and income. Our estimate of the elasticity of giving with respect to a persistent price change for the full sample is about -0.7; this elasticity is generally larger when the sample is limited to high-income people and we control for time-varying unobservable influences on charity in a flexible fashion. We find some evidence, particularly among very high-income people, of re-timing giving in response to expected future changes in price, but this finding is sensitive to the source of identification for the price effects. Our estimates are broadly consistent the permanent income hypothesis. Expenditures on charitable giving are estimated to respond more strongly to persistent changes in income than to transitory fluctuations in income. Moreover, we find evidence in some specifications that people will increase their charitable giving now in response to a predictable reduction in future tax liability arising from tax reform.

Effect of Childhood Trauma on Adult Depression and Neuroendocrine Function: Sex-Specific Moderation by CRH Receptor 1 Gene

Variations of the corticotropin-releasing hormone receptor 1 (CRHR1) gene appear to moderate the development of depression after childhood trauma. Depression more frequently affects women than men. We examined sex differences in the effects of the CRHR1 gene on the relationship between childhood trauma and adult depression. We recruited 1,063 subjects from the waiting rooms of a public urban hospital. Childhood trauma exposure and symptoms of depression were assessed using dimensional rating scales. Subjects were genotyped for rs110402 within the CRHR1 gene. An independent sample of 78 subjects underwent clinical assessment, genotyping, and a dexamethasone/CRH test. The age range at recruitment was 18–77 years and 18–45, for the two studies respectively. In the hospital sample, the protective effect of the rs110402 A-allele against developing depression after childhood trauma was observed in men (N = 424), but not in women (N = 635). In the second sample, the rs110402 A-allele was associated with decreased cortisol response in the dexamethasone/CRH test only in men. In A-allele carriers with childhood trauma exposure women exhibited increased cortisol response compared men; there were no sex differences in A-allele carriers without trauma exposure. This effect may, however, not be related to gender differences per se, but to differences in the type of experienced abuse between men and women. CRHR × environment interactions in the hospital sample were observed with exposure to physical, but not sexual or emotional abuse. Physical abuse was the most common type of abuse in men in this cohort, while sexual abuse was most commonly suffered by women. Our results suggest that the CRHR1 gene may only moderate the effects of specific types of childhood trauma on depression. Gender differences in environmental exposures could thus be reflected in sex-specific CRHR1 × child abuse interactions

Modelling adhesive contact problems involving a layered elastic solid and cylindrical indenter using Lennard Jones potential

This paper presents an iterative algorithm that solves for the displacement and sub-surface stresses induced within a layered elastic solid adhering to a rigid cylindrical indenter under lightly loaded conditions. The solid is assumed to comprise a functionally graded coating of finite thickness bonded to a homogeneous substrate of infinite extent and is assumed to be in a state of plane strain which allows a two-dimensional analysis to be performed. The Lennard–Jones potential is used to model the adhesive force acting between the indenter and solid whilst the effects of surface adhesion are characterised using Tabor’s parameter. A selection of numerical results for the adhesive contact problem are presented which indicate that the maximum pressure and induced sub-surface stresses increase dramatically as Tabor’s parameter increases. It is also found that the shear modulus and thickness of the coating have a significant effect on material behaviour with harder coatings experiencing significantly larger tensile stresses but smaller surface displacement than softer coatings. The present investigation allows us to deduce that at smaller scales, surface adhesion can be instrumental in causing wear or potential material failure if coatings are improperly designed

Fiscal policy and asset prices

We assess the role played by scal policy in explaining the dynamics of asset markets. Using a panel of ten industrialized countries, we show that a positive scal shock has a negative impact in both stock and housing prices. However, while stock prices immediately adjust to the shock and the e¤ect of scal policy is temporary, housing prices gradually and persistently fall. As a result, the attempts of scal policy to mitigate stock price developments may severely de-stabilize housing markets. The empirical ndings also point to: (i) a contractionary e¤ect of scal policy on output in line with the existence of crowding-out e¤ects; (ii) a weakening of the e¤ectiveness of scal policy in recent times; (iii) signi cant scal multiplier e¤ects in the context of severe housing busts; and (iv) an increase of the sensitivity of asset prices to scal policy shocks following the process of nancial deregulation and mortgage liberalization. Finally, the evidence suggests that changes in equity prices may help governments towards consolidation of public nances.COMPETE; QREN; UE Fundo Europeu de Desenvolvimento Regional; Fundação para a Ciência e a Tecnologia (FCT

Systematic review and meta-analysis of the diagnostic accuracy of ultrasonography for deep vein thrombosis

Background Ultrasound (US) has largely replaced contrast venography as the definitive diagnostic test for deep vein thrombosis (DVT). We aimed to derive a definitive estimate of the diagnostic accuracy of US for clinically suspected DVT and identify study-level factors that might predict accuracy. Methods We undertook a systematic review, meta-analysis and meta-regression of diagnostic cohort studies that compared US to contrast venography in patients with suspected DVT. We searched Medline, EMBASE, CINAHL, Web of Science, Cochrane Database of Systematic Reviews, Cochrane Controlled Trials Register, Database of Reviews of Effectiveness, the ACP Journal Club, and citation lists (1966 to April 2004). Random effects meta-analysis was used to derive pooled estimates of sensitivity and specificity. Random effects meta-regression was used to identify study-level covariates that predicted diagnostic performance. Results We identified 100 cohorts comparing US to venography in patients with suspected DVT. Overall sensitivity for proximal DVT (95% confidence interval) was 94.2% (93.2 to 95.0), for distal DVT was 63.5% (59.8 to 67.0), and specificity was 93.8% (93.1 to 94.4). Duplex US had pooled sensitivity of 96.5% (95.1 to 97.6) for proximal DVT, 71.2% (64.6 to 77.2) for distal DVT and specificity of 94.0% (92.8 to 95.1). Triplex US had pooled sensitivity of 96.4% (94.4 to 97.1%) for proximal DVT, 75.2% (67.7 to 81.6) for distal DVT and specificity of 94.3% (92.5 to 95.8). Compression US alone had pooled sensitivity of 93.8 % (92.0 to 95.3%) for proximal DVT, 56.8% (49.0 to 66.4) for distal DVT and specificity of 97.8% (97.0 to 98.4). Sensitivity was higher in more recently published studies and in cohorts with higher prevalence of DVT and more proximal DVT, and was lower in cohorts that reported interpretation by a radiologist. Specificity was higher in cohorts that excluded patients with previous DVT. No studies were identified that compared repeat US to venography in all patients. Repeat US appears to have a positive yield of 1.3%, with 89% of these being confirmed by venography. Conclusion Combined colour-doppler US techniques have optimal sensitivity, while compression US has optimal specificity for DVT. However, all estimates are subject to substantial unexplained heterogeneity. The role of repeat scanning is very uncertain and based upon limited data