Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities

This paper presents a model of optimal labor income taxation where top incomes respond to marginal tax rates through three channels: (1) standard labor supply, (2) tax avoidance, (3) compensation bargaining. We derive the optimal top tax rate formula as a function of the three corresponding behavioral elasticities. The first elasticity (labor supply) is the sole real factor limiting optimal top tax rates. The optimal tax system should be designed to minimize the second elasticity (avoidance) through tax enforcement and tax neutrality across income forms. The optimal top tax rate increases with the third elasticity (bargaining) as bargaining efforts are zero-sum in aggregate. We provide evidence using cross-country times series macro-evidence and CEO pay micro-evidence. The macro-evidence from 18 OECD countries shows that there is a strong negative correlation between top tax rates and top 1% income shares since 1960, implying that the overall elasticity is large. However, top income share increases have not translated into higher economic growth. US CEO pay evidence shows that pay for luck is quantitatively more important when top tax rates are low. International CEO pay evidence shows that CEO pay is strongly negatively correlated with top tax rates even controlling for rm characteristics and performance, and this correlation is stronger in firms with poor governance. These results are consistent with bargaining effects playing a role in the link between top incomes and top tax rates. If bargaining effects in fact exist, optimal tax rates should be higher than commonly assumed.

The transverse-momentum spectrum of Higgs bosons near threshold at NNLO

We give next-to-next-to-leading order (NNLO) predictions for the Higgs production cross section at large transverse momentum in the threshold limit. Near the partonic threshold, all radiation is either soft or collinear to the final state jet which recoils against the Higgs boson. We find that the real emission corrections are of moderate size, but that the virtual corrections are large. We discuss the origin of these corrections and give numerical predictions for the transverse-momentum spectrum. The threshold result is matched to the known NLO result and implemented in the public code PeTeR.Comment: 17 pages, 9 Figures; v2: journal version, correction in the qg channe

Transverse-momentum spectra of electroweak bosons near threshold at NNLO

We obtain the next-to-next-to-leading order corrections to transverse-momentum spectra of W, Z and Higgs bosons near the partonic threshold. In the threshold limit, the electroweak boson recoils against a low-mass jet and all radiation is either soft, or collinear to the jet or the beam directions. We extract the virtual corrections from known results for the relevant two-loop four-point amplitudes and combine them with the soft and collinear two-loop functions as defined in Soft-Collinear Effective Theory. We have implemented these results in a public code PeTeR and present numerical results for the threshold resummed cross section of W and Z bosons at next-to-next-to-next-to-leading logarithmic accuracy, matched to next-to-leading fixed-order perturbation theory. The two-loop corrections lead to a moderate increase in the cross section and reduce the scale uncertainty by about a factor of two. The corrections are significantly larger for Higgs production.Comment: 33 pages, 3 figures; v2: journal version, correction in (73); v3: corrected qg-channel in (73

Statistical Methods for the Qualitative Assessment of Dynamic Models with Time Delay (R Package qualV)

Results of ecological models differ, to some extent, more from measured data than from empirical knowledge. Existing techniques for validation based on quantitative assessments sometimes cause an underestimation of the performance of models due to time shifts, accelerations and delays or systematic differences between measurement and simulation. However, for the application of such models it is often more important to reproduce essential patterns instead of seemingly exact numerical values. This paper presents techniques to identify patterns and numerical methods to measure the consistency of patterns between observations and model results. An orthogonal set of deviance measures for absolute, relative and ordinal scale was compiled to provide informations about the type of difference. Furthermore, two different approaches accounting for time shifts were presented. The first one transforms the time to take time delays and speed differences into account. The second one describes known qualitative criteria dividing time series into interval units in accordance to their main features. The methods differ in their basic concepts and in the form of the resulting criteria. Both approaches and the deviance measures discussed are implemented in an R package. All methods are demonstrated by means of water quality measurements and simulation data. The proposed quality criteria allow to recognize systematic differences and time shifts between time series and to conclude about the quantitative and qualitative similarity of patterns.

Characterisation of the ERF102 to ERF105 genes of Arabidopsis thaliana and their role in the response to cold stress

The ETHYLENE RESPONSE FACTOR (ERF) genes of Arabidopsis thaliana form a large family encoding plant-specific transcription factors. Here, we characterise the four phylogenetically closely related ERF102/ERF5, ERF103/ERF6, ERF104 and ERF105 genes. Expression analyses revealed that these four genes are similarly regulated by different hormones and abiotic stresses. Analyses of tissue-specific expression using promoter:GUS reporter lines revealed their predominant expression in root tissues including the root meristem (ERF103), the quiescent center (ERF104) and the root vasculature (all). All GFP-ERF fusion proteins were nuclear-localised. The analysis of insertional mutants, amiRNA lines and 35S:ERF overexpressing transgenic lines indicated that ERF102 to ERF105 have only a limited impact on regulating shoot and root growth. Previous work had shown a role for ERF105 in the cold stress response. Here, measurement of electrolyte leakage to determine leaf freezing tolerance and expression analyses of cold-responsive genes revealed that the combined activity of ERF102 and ERF103 is also required for a full cold acclimation response likely involving the CBF regulon. These results suggest a common function of these ERF genes in the response to cold stress

Modeling the growth of fingerprints improves matching for adolescents

We study the effect of growth on the fingerprints of adolescents, based on which we suggest a simple method to adjust for growth when trying to recover a juvenile's fingerprint in a database years later. Based on longitudinal data sets in juveniles' criminal records, we show that growth essentially leads to an isotropic rescaling, so that we can use the strong correlation between growth in stature and limbs to model the growth of fingerprints proportional to stature growth as documented in growth charts. The proposed rescaling leads to a 72% reduction of the distances between corresponding minutiae for the data set analyzed. These findings were corroborated by several verification tests. In an identification test on a database containing 3.25 million right index fingers at the Federal Criminal Police Office of Germany, the identification error rate of 20.8% was reduced to 2.1% by rescaling. The presented method is of striking simplicity and can easily be integrated into existing automated fingerprint identification systems