Extending the consumption-tax treatment of personal retirement saving

Article Abstract:

Citizens have been turning to 401(k) retirement plans in lieu of Social Security benefits in recognition of its future instability due to longer life expectancy and rapid aging. However, the Tax Reform Act of 1986 has undermined the use of pension assets due to the large consumption taxes it levied on distributions of pension assets. The Taxpayer Relief Act of 1997, while removing extreme excess-distribution and excess-accumulation taxes, did not do away with high marginal tax rates. Excessive taxation can be avoided by 'stretching out' plan distributions and income taxes to avail of consumption-tax treatment of assets similar to pre-1982 rates.

Tax Law, Public Finance Activities, Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs), Social Security, Finance, Retirement income, Consumption taxes

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Consumption over the life cycle and over the business cycle

Article Abstract:

The validity of the life-cycle model is tested through a time series analysis of cross sections and a novel parametrization of preferences. Results show that, where demographic variables are controlled for, the excess sensitivity of consumption growth to labor income vanishes. It is also found that the elasticity of intertemporal substitution (EIS) is a function of several variables, such as the consumption level. Lastly, it is revealed that the variables influencing EIS also affect excess sensitivity over the business cycle.

Consumption (Economics), Consumer behavior, Business cycles

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Pension wealth and household saving: evidence from pension reforms in the United Kingdom

Article Abstract:

During pension reforms, behavioral response of households is used for investigating the relationship between the pension saving and private savings, in the United Kingdom.

United Kingdom, Analysis, Comparative analysis, Savings, Households

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