Tax Aversion, Deficits and the Tax Rate-Tax Revenue Relationship

This paper offers a possible explanation for the existence of continual government budget deficits such as experienced in a number of industrialized countries in recent years. Based on the assumption that higher tax rates cause more intensive tax-aversion behavior (tax avoidance and tax evasion), together with the assumption that the time horizon relevant for political decision makers is shorter than that required for complete private sector response to tax rate change, our analysis suggests why there seems to be an inherent bias toward budget deficits. Because of tax aversion an inverse relationship between tax rates and tax revenues may exist at low levels of the tax rate. Consequently determined attempts to eliminate or reduce deficits can become self-defeating, almost certainly so when there is a structural deficit. Our analysis suggests that if an economy is on the downward sloping portion of a stylized Laffer curve political expedience, uncertainty about the shape of the curve, and a common wisdom that tax rate increases reduce deficits can all conspire to keep the budget trapped in deficit. Finally, in the presence of inflation deficit growth may be less if there is indexation of income tax rates to inflation, contrary to conventional wisdom.

Tax Aversion, Optimal Tax Rates, and Indexation

Taking account of the costs of tax evasion and avoidance activity together with the government's costs of tax enforcement it is shown that the optimal point on a stylized Laffer curve is located on the positively sloped region, not at the maximum point of the, curve. The analysis eschews the usual supply-side-type rationale for the Laffer curve and shows that such a curve can arise solely as a consequence of the optimizing tax aversion activity of a utility maximizing economic agent. The analysis further implies that indexation to inflation may be warranted by considerations of economic efficiency.

LEO high voltage solar array arcing response model

A series of mathematical models were developed that describe the electrical behavior of a large solar cell array floating electrically in the low Earth orbit (LEO) space plasma and struck by an arc at a point of negative bias. There are now three models in this series: ARCII, which is a fully analytical, linearized model; ARCIII, which is an extension of ARCIII that includes solar cell inductance as well as load reactance; Nonlinear ARC, which is a numerical model able to treat effects such as non-linearized, i.e., logarithmic solar cell I/V characteristics, conductance switching as a solar cell crosses plasma ground on a voltage excursion and non-ohmic plasma leakage current collection

On a problem in eigenvalue perturbation theory

We consider additive perturbations of the type $K_t=K_0+tW$, $t\in [0,1]$, where $K_0$ and $W$ are self-adjoint operators in a separable Hilbert space $\mathcal{H}$ and $W$ is bounded. In addition, we assume that the range of $W$ is a generating (i.e., cyclic) subspace for $K_0$. If $\lambda_0$ is an eigenvalue of $K_0$, then under the additional assumption that $W$ is nonnegative, the Lebesgue measure of the set of all $t\in [0,1]$ for which $\lambda_0$ is an eigenvalue of $K_t$ is known to be zero. We recall this result with its proof and show by explicit counterexample that the nonnegativity assumption $W\geq 0$ cannot be removed.Comment: 10 pages; added Lemma 2.4, typos removed; to appear in J. Math. Anal. App

Studies of the scattering/absorption of minerals

Reflectance spectra were computed for water ice and ammonia ice mixtures as functions of weight fraction, grain size, and viewing geometry to simulate possible outer solar system satellite surfaces. Reflectance spectra of planetary surfaces are most affected by the weight fraction and grain sizes of the minerals in the surface. The reflectance can range from 1.0 to about 0.01 by changing the grain size or weight fraction, a factor of 100. Viewing geometry changes the reflectance by about 25 percent or less

On the Optimality of Reserve Requirements

An implicit rationale for a bank reserve requirement is that a central monetary authority is in a unique position (as "social planner) to impose a "socially superior" outcome to that yielded by a free banking system. We illustrate how this can be true in the context of a simple economy modeled to mimic certain basic characteristics of a monetary economy with banks and agents who trade with one another. Banks exist in our model because by pooling liquidation risks they provide liquidity otherwise unavailable to depositors, which, in turn, provides the incentive - for using deposit claims as the medium of exchange.

THE LOUISIANA STRAWBERRY: ENDANGERED SPECIES?

Crop Production/Industries,

Real Business Cycles and the Lucas Paradigm

When the Lucas paradigm is generalized to include real effects, the effects of real factors and monetary factors on the business cycle are always interrelated. Furthermore, in such models monetary factors can affect the long-run behavior or real output, contrary to the commonly held view that they can't. Real business cycle models and Lucas-type models are different paradigms not in the sense of real versus monetary, but in the interrelation- ships between real and monetary factors intrinsic to the Lucas paradigm as contrasted to the dichotomy between real and monetary factors implied by the real business cycle literature.

Causes of spurious features in spectral reflectance data

Several techniques are becoming common in the analysis of imaging spectrometer data that can lead to spurious absorption features or to changes in the position, width, and shape of actual absorption features. It is a common practice to calibrate AIS or other imaging spectrometer data by averaging each pixel along the flight line. The average is used to calibrate the spectral data by dividing the spectrum at each pixel by the average. If some pixels in the data set contain an absorption, then the average will also show an absorption. Some AIS data has had problems with wavelength stability from one scan line to the next which can produce spurious features with some analysis methods. If a pixel has a spectrum with an absorption having a different position or width than the spectrum used in a ratio, then the ratio can produce a spurious absorption at a different position and width than the true absorption feature. An average spectrum ratioed to each pixel will produce band shifts, and changes in width or shape. If continuum removal is performed by substraction rather than division, band positions can also be shifted

Demand Variability, Supply Shocks and the Output-Inflation Tradeoff

This paper examines the shift in the relation between the inflation rate and the rate of growth of real output which has occurred in the United States over the past three decades, and attempts to assess the relative importance of three possible lines of explanation: a) the new classical view of the output-inflation tradeoff, initially specified by Lucas;b) the effect of supply-side shocks, such as energy prices; c) the effect of inflation variability on the natural rate of real output, as hypothesized by Milton Friedman. The paper concludes that b) and c) seem to have played a significant role in the observed shift from a positive to a negative correlation between the rate of inflation and the rate of real output growth,but that a) did not.