Implicit tax

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Implicit tax

Lower or higher before-tax required returns on assets that are subject to lower or higher tax rates.

Implicit Tax

The cost of an activity that is not collected by the government but may be the result of government policy. For example, if the government is encouraging economic growth and accepting a high inflation rate, one may consider this an implicit tax on personal savings because inflation renders them worth less over time. An implicit tax should not be confused with an indirect tax, which is a different concept altogether. See also: Explict tax.
References in periodicals archive ?
These tax rates include explicit taxes, such as federal and state income taxes and FICA payroll taxes, as well as implicit taxes, such as the loss of government benefits or increase in income-based premiums for government programs that may result from higher earnings.
He concludes that, when one includes the impact of the ACA's implicit taxes, the law's impact on economic output is "vastly more important than, say, the interest rate on federal funds.
For the serious argument against monetary finance lies not in the technicalities of future implicit taxes, but in the danger that if we break the taboo and treat monetary finance as an acceptable option, politicians will be tempted to draw again and again from the well of monetary finance.
2) Also, a number of workers faced new implicit taxes on their incomes, because the ACA is giving lower health care subsidies to people with higher incomes.
Instead, the country captures dollars through the fixed exchange rate system and the implicit taxes that are charged for transactions in CUC," Gonzalez-Corzo explained.
We are increasingly mired down with even larger government deficits, higher implicit taxes through the loans we are racking up, the nationalization of health-care insurance, not to mention the auto industry, student loans, etc.
From an efficiency perspective, the marginal rate of taxation on labour for old workers should eventually approach zero, meaning that marginal implicit taxes on pensions should be negative.
As a result of these very high implicit taxes, the "net load" of the policy--i.
True, all businesses operated by expatriates have to pay implicit taxes by getting sponsored by nationals as silent partners, which in effect is a type of socio-economic subsidy.
engineering) the presence of implicit taxes or subsidies and tax
Perhaps these implicit taxes are not distortionary because they are not enforced or because other government regulations prohibit people from changing their behavior in response to them?
This paper examines pretax yields on state and local government (SALG) bonds for evidence of implicit taxes associated with the regular income tax and the alternative minimum tax (AMT) systems.