Implicit tax

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 ?
Microeconomic indicators of the burden on labour from taxes and contributions are the tax wedge, implicit tax rates and effective marginal tax rates (Schultzova et al., 2009).
The Federal Reserve pays interest on those required reserves in order to offset the implicit tax that such requirements may otherwise impose on depository institutions.
But goods imported from VAT countries do not have that implicit tax cost, making U.S.
If he could have everything his way, currency issue would be reduced to small-denomination coins, and these coins might at times be subjected to an implicit tax so as to support monetary policy regimes with negative interest rates on central bank reserves.
The ACA's premium subsidies impose an implicit tax on work.
One effect was eliminating the implicit tax on reserves, which Milton Friedman (1959) initially recommended over fifty years ago.
Thus, investors in tax-exempt bonds are effectively paying a tax, referred to as an "implicit tax," and tax-exempt interest as reported is measured on an after tax, rather than a pretax, basis.
We demonstrate that there is (stable and statistically significant) positive linear dependence between the implicit tax rate on capital (ITRC) and relative capital tax collection.
As argued by Brown and Finkelstein (2008), the private LTC insurance market is very small, primarily because of the existence of the Medicaid implicit tax, a phenomenon that a large part of the premium for a private policy pays for benefits that simply replace benefits that would otherwise have been provided by Medicaid.
There is important indicator used by EUROSTAT--the implicit tax rate on energy showing the importance of energy taxation in energy sector and economy of the country.
This implicit tax increase is due to new tax credits that are withheld from full-time employees who are offered affordable health coverage by their employers.
medical schools and teaching hospitals, by the way that social insurance programs pay for care, and by the implicit tax on low-quality care that results from licensure rules for physicians, nurses, and other health-care providers.