English, Article, Journal or magazine article edition: Valuing the Right to Tax Incomes: An Options Pricing Approach Teun Draaisma; Kathryn Gordon

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Bookmark: http://trove.nla.gov.au/version/136205
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Valuing the Right to Tax Incomes: An Options Pricing Approach
Author
  • Teun Draaisma
  • Kathryn Gordon
Physical Description
  • preprint
Notes
  • This paper uses options pricing techniques to estimate the value of the government’s tax claim on household or business incomes. It treats the annual tax claim as a European call option on taxable income (a European call is an option that can be exercised at its expiration date and not before). The option’s expiration date is the end of the fiscal year and its strike price is the threshold level of income below which income is not subject to tax. The paper derives three alternative valuation formulas, each associated with an alternative functional form for the tax code (a flat tax, a step-function and a more general tax function). The application of options pricing theory to tax claims is found to be relatively straightforward. The approach proposed here could be used to refine accounting on the assets side of the government’s balance sheet. It would not be more difficult to implement than many common applications of options theory ... Évaluation du droit d’imposition des revenus : Approche basée sur le prix des options Dans cette note, les techniques de détermination du prix des options sont utilisées pour estimer le montant de la créance fiscale de l’Etat sur les revenus des ménages et des entreprises. Cette créance fiscale annuelle est traitée comme une option d’achat à l’Européenne sur le revenu imposable. (Une option d’achat à l’Européenne est une option qu’on ne peut exercer qu’à la date d’expiration seulement et non avant.) La date d’expiration de l’option est la fin de l’exercice budgétaire et son prix d’exercice est le seuil en-dessous duquel le revenu n’est pas imposable. La note décrit trois formules possibles d’évaluation, dont chacune est associée à des modalités d’imposition différentes du point de vue du Code des impôts (un impôt à taux uniforme, un impôt progressif et une fonction fiscale plus générale). L’application de la théorie de la détermination du prix des options aux créances fiscales apparaît relativement simple. La méthode proposée dans cette note pourrait être utilisée ...
  • RePEc:oec:ecoaaa:160-en
Language
  • English
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