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 ?
The implicit tax rates sometimes exceed 100 percent
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.
This disparity means that "a result of [energy efficiency] standards is to place an implicit tax on those individuals who are thought to have the highest discount rates: the less well off.
While the statutory tax rate represent the signaling intention, the implicit tax rates show real rate corporation have to pay after all other tax deductions are calculated.
Revenue is projected according to the development of the respective tax base and with unchanged implicit tax rates.
In this literature, five different measures of tax burden are used: (1) statutory tax rates (STRs) on corporate income, (2) corporate income tax revenues as a percentage of GDP (gross domestic product) or total tax revenues, (3) implicit tax rates (ITR) (1) on capital income, corporate income, labor income, and on consumption expenditures of the Mendoza, Razin, and Tesar (1994) type, and (4 and 5) effective marginal and average tax rates on corporate income (EMTR and EATR) of the Devereux and Griffith (1998) type.
This is particularly true if Thailand maintains its high paddy pledging price floor, as it effectively serves as an implicit tax on its rice exports.
Consumers are unable to cut their fuel consumption overnight, so the rise in prices acts as an implicit tax on earnings, forcing them to cut back spending in other areas.
Put differently, they assert that Medicaid imposes an implicit tax on private LTC policies, reducing public LTC benefits when one holds private coverage.
The average implicit tax rate on labour, a broad measure of the tax burden falling on work income, was almost unchanged in the EU27 at 34.
CYPRUS HAS registered the highest increase in the overall tax burden on citizens and companies from the 27 countries of the EU, while also recording the highest implicit tax rate on capital and the lowest corporate tax.
The subsidy is withdrawn, resulting in an implicit tax rate that may exceed the tax rate for the wealthiest income tax bracket.