Deep Dive Into Cryptocurrency. ET Markets Conclave — Cryptocurrency. Reshape Tomorrow Tomorrow is different. Let's reshape it today. Corning Gorilla Glass TougherTogether.
ET India Inc. ET Engage. ET Secure IT. Nine weird taxes from around the world. Old Fellow; we're glad to see you here. The complaints from the medical profession and enlightened individuals rapidly grew as the industrial revolution and urbanisation created mass housing and crowded cities, and raised the spectre of epidemics.
They argued that the lack of windows tended to create dark, damp tenements which were a source of disease and ill-health. The campaigners eventually won the argument and in the Act was repealed and replaced by a house tax.
Punch Magazine celebrated its repeal with the cartoon shown above. What else did the government tax? How about newspapers and fireplaces. Search now on Ancestry for your Essex ancestors. Skip to Main Content. Search our website Search Discovery, our catalogue. Window tax. View full image. The act reduced tax evasion significantly, so the data for the following 10 years should provide reasonable estimates of the actual number of windows. If the window tax distorted behavior, one would expect to find spikes in the number of dwellings at the notches, with 9, 14, or 19 windows.
And this is precisely what the data demonstrate. Figure 1 is a histogram showing the number of windows for homes in the sample.
The pattern is clear; there are sharp increases in the number of homes with 9, 14, or 20 windows:. Standard statistical tests reject the hypothesis that there are equal numbers of houses with 8, 9, or 10 windows; with 13, 14, or 15 windows; or with 18, 19, or 20 windows.
It is manifestly clear that people responded to the window tax by locating at one of the notches so as to minimize their tax liability. Data on a sample of houses for the period to shed light on the response to Parliamentary revisions to the tax in In addition to rate increases, the revisions expanded coverage of the tax to include houses with 8 or 9 windows.
Under the earlier rate structures, houses with fewer than 10 windows paid no window tax. For this second sample, figure 2 shows a large spike at 7 windows: In summary, the evidence from our two samples makes it quite clear that there was a widespread tendency to alter behavior in order to reduce tax payments. People chose the number of windows not to satisfy their own preferences, but to avoid paying higher levels of taxes.
As discussed, the window tax was substantial and induced widespread tax-avoiding behavior. Based on some standard techniques of economic analysis, our simulation model generates an estimate of what people would have been willing to pay for their preferred number of windows. In the sample from to , the estimated welfare losses were very large for households at one of the notches. For them, the welfare loss i. That is to say, for every dollar collected under our simulated version of the window tax, the tax imposed an additional burden or cost of 62 cents on these households.
The excess burden, not surprisingly, is particularly large for households that chose 9 windows. One criterion economists use to evaluate a tax is excess burden relative to taxes paid. By this standard, a good tax is one that collects significant revenue buts leads to very small changes in decisions. Consumers who purchased 9 windows are thus the worst possible case. Those consumers paid no tax; so, for them, the entire burden of the tax is excess burden.
For our entire sample of 1, simulated households, the excess burden as a fraction of taxes paid is about 14 percent. Thus for each tax dollar raised by the window tax, our simulation suggests an additional cost of 14 cents to taxpayers as a result of their distorted choices.
The window tax represents a very clear, transparent case of excess burden—a tax that placed heavy costs on taxpayers in addition to their tax liabilities resulting from tax-avoiding adjustments in behavior. But, as mentioned early on, modern property taxes also create an excess burden, although the consequences are less dramatic than in the case of the window tax. In designing a tax system, it is important to consider this issue.
Such a tax is a pure land-value tax levied on the site value of the land—that is, its value with no improvements. Thus, the assessed value of the land and hence the tax liability of the owner is completely independent of any decisions made by the owner of the land parcel. Unlike the window tax, which provides a compelling example of the additional costs that arise when property tax liabilities depend on the behavior of the property owner, a land-value tax creates no incentives for tax-avoiding behavior.
0コメント