Changes in Taxation: Impact on Savers or Investors - Research Proposal Example

Changes in Taxation: Impact on Savers or Investors Introduction Tax is an amount, which is donated by each economic unit of a country to the government. In broader sense tax can be off two types: direct tax and indirect tax. In case of direct tax shifting of tax burden is not possible i.e. tax which is charged on personal income, but in case of indirect tax the shifting of tax burden is possible i.e. sales tax. In today’s world taxes are collected mostly in the form of money. Saving generally imply lowering the level of expenditure from the income level. It can be considered as an art of protecting money. A person who is doing savings is termed as saver. Investor can be defined as a person or any enterprise, which mainly purchase various financial assets with the motive of earning a huge return. Investor generally invests in the low risk project, which includes a longer time period to achieve the return, which most of the time includes a payment on regular interval. A speculator is a risk loving person, who invests in a high-risk project with the motive of earning huge profit in a very short period. (Investor. n.d.). A saver should pay a tax on any savings income or else their volume of earning for any particular year can be greater than the annual limit of tax-free income. In general savers have to deduct 20pc tax from the level of savings, to receive the gross interest on savings. Savers who do not earn up to that level should finish an HRMC R85 declaration so that they can receive the interest payment without the deduction of tax. According to Halifax savers who have managed to earn grater than the tax allowances can see a reduction in the income level even below the tax threshold limit due to the rise in tax allowances and fall in the level of interest rates. According to Flavia Palacious Umana people who depend on the savings to support their pension have selected the correct product but they have to pay unnecessary tax. He suggested all savers mainly pensioners to review their level of income and they should claim for gross interest according to their eligibility. (Savers paying too much tax, July 20, 2009) Rationale of the project: This paper tries to explain the relationship between an economic factor and a social factor. Tax is very important source of government revenue. With the amount that has been collected as tax can be used in various sectors, i.e. it can be used to bear the war expenditure, to maintain the law and order, protection of various public properties, giving unemployment benefit, widow pensions etc. From the point of view of the society it is very much beneficial. But the level or the rate of tax can adversely affect the savings rate of an individual. As we all know disposable income can be distributed to two broader categories 1. Consumption. 2. Savings. Due to the imposition of a higher rate of direct tax the amount of disposable income decreases, as disposable income decreases the amount of consumption as well as savings both decreases. Again an increase in Indirect tax made consumption must more costly. And as consumption expenditure increases, given the level of disposable income the savings amount decreases. So in case of both direct and indirect tax it is adversely affecting to the level of savings. In this paper the main emphasis is to find to what extent the change in tax rate is affecting to the savings decision of an individual. Again lower level of savings implies lower level of investment. Lower investment reduces the growth of capital formation. This is harmful for any economy, whether it is developed or developing. As the level of capital formation reduces it is very much harmful to employment generation. New employment won’t be generated and unemployment level will increase over time. So finally it will affect the growth of an economy. So in this way on one hand tax is important for an economy and on the other hand it gives a negative impact on the savers, investors and finally the growth of the economy. Literature Review: Kelvin Milligan mainly attempts to find some consideration for the purpose of future research mainly on tax related savings account. He mainly elaborates three issues that can affect the choice regarding the empirical strategy. The first issue was-any kind of saving analysis, which responses towards a tax preferred savings should consider the result during a life cycle framework. Secondly he explains the effects of various tax preferred savings account that improves estimation. Finally he explains some empirical analysis to estimate towards the tax preferred savings account. (Milligan .n.d) Summers (1984) in his paper reviews not only various theoretical arguments but also showed various empirical evidence concerning the interest elasticity of a very important factor i.e. savings. According to the paper there are various strong reasons on the basis of that one can see a positive relation between post tax rate of return and the rate of private savings. Evidence mainly on utility function parameter suggests that the elasticity between savings and investment are positive. The paper concluded by evaluating the effects of savings on the background of recent tax regulation (Summers, August 1984). In the paper of Feltenstein and Shah (1993) they specifies a dynamic general equilibrium model to find to find various cost effective incentives for mainly industrial and technological upgradetion offered through tax. In the paper he presented detailed calculation regarding the change in level of output, capital usage by various sector, changes in the pattern and amount of tax revenue for various sectors and the impact of all the above on the economy. Again how the gains and losses in welfare of consumers of major sectors mainly urban and rural are associated with the given policy is also established in his paper (Feltenstein and Shah, 1993). According to Bradford (2000) a potentially low one-time wealth tax can generate revenue in the economic system. This type of one time tax can be named as lump sum tax because person cannot avoid the impact of this type of tax. As it is a kind of unavoidable tax so it does not change or hamper the economic choices. But it is also true that any kind of transition in lump sum tax can generate economic revenue, which can reduce taxes, which can hamper economic choices. According to the explanation by Auerbach and Kotlikoff in the year 1983 and 1987 it is clear that the positive earning from reduced tax rate can give the benefit to everyone to take the advantage from the transition. Even to those people who had paid one time wealth tax. A tax will be a lump sum tax if it is unanticipated else people will like to avoid the tax by consuming at a higher amount and saving less. This is also a most important part of transition. An increase in consumption tax where any kind of transition rule is absent will reduce the level of savings as well as investment and increase consumption level. (Bradford, 2000, p.111) In the paper of Djankov, Ganser, McLiesh, Ramalho and Shleifer (2009), they presented cross-country hypothesis using the data of 85 countries. They want to study the effect of tax on mainly investment opportunity and entrepreneurship. They have taken the cross section data for these countries. Generally cross section studies gives emphasis to OECD countries, it was very tough to find data on developing country. So they have constructed a completely new database of tax rates that can be easily comparable across various countries. The new database comprises the tax data of various institutions. But one major drawback of the theory is that it mainly considers the tax paid by various corporations, they did not include individual tax payment. Though there is sufficient data present on foreign direct investment, they have considered a new data regarding entrepreneurship. (Djankov, Ganser, McLiesh, Ramalho and Shleifer, 2009) Famous Nobel Prize Winner economist Harry M. Markowitz developed portfolio theory. This theory gives a chance to the investors to invest their asset in such a way so that they can estimate the risk as well as the return for the investment portfolio. People want to invest in those assets, which will provide a huge amount of return. In general there is a positive relationship between return and risk. Higher return implies higher level of risk and lower return implies risk level will be much lower. If an investor invests its entire savings in a high risk high return project, in good situation he will earn maximum profit but if something goes wrong to the economy then his loss will also be maximum. So it will be profitable for the investor to invest not only in one sector, rather he can diversify its investment. So the word diversification implies holding more than one stock. Expected return of portfolio is the nothing but the weighted average of the expected return of various holdings. The anticipated return of portfolio is obviously lower than the best possible return but higher than the minimum expected return. But here we have to consider the risk also. Portfolio risk is lower than the average risk of the individual holdings. By mixing investment one can get a huge range of risk and return, i.e. an investor can get a no of portfolios. A portfolio, which is better than all other portfolios (that can be constructed given the number of holdings) risk termed as efficient portfolio. Here we mainly use investors holding in such a manner so that it can provide the maximum expected return for a given level of standard deviation (can be used as a measure of risk). To get the result of portfolio problem we use the quadratic programming i.e. given the return, risk (measured by standard deviation) and the correlation with the use of any standard quadratic program we can find the value of efficient portfolio. According to Markowitz there can be two broader division of portfolio Strategies. 1. Passive Portfolio Strategy: In this kind of a strategy the involvement of expectational input is very low; it mainly depends on diversification so that it can be matched with performance of any market index. Main assumption behind this strategy is that market will provide all the available information. 2. Active Portfolio Strategy: This kind of strategy uses all kind of information and it does not depend on diversification only, rather it seeks better techniques to forecast. Again there are three types of portfolio that is also very popular: A. The Patient Portfolio: Here investment is confined to the popular stocks of the economy, and here the holding period is very high. Here we mainly consider all those companies, which can generate a high level of earning despite of any economic condition. B. The Aggressive Portfolio: Here the investment is towards the most expensive stock which generates high return as well as carries high amount of risk. It mainly considers stocks of highly growing company, which will achieve a huge level of growth in few years. C. The Conservative Portfolio: Here also earning profit is the main motive but here the investment is confined to those companies for which the earning level is high from the very beginning. According to the paper ‘Taxation and Portfolio structure’, taxation can affect the portfolio of an individual. First we should consider the six broader content of portfolio that may be affected by tax system. These are namely the selection of asset, allocation of asset, borrowing, location of asset in both taxable as well as tax deferred accounts, turnover of various assets and finally whether to hold asset directly or via any financial intermediary. This analysis considers due to the ignorance of tax consideration can give bias estimate of various other variables. Again it describes various tax rules that can be applied to different portfolio instruments. And finally this paper shows the effect of taxation on portfolio choice. (Taxation and Portfolio structure: Issued and Implication, 2001) Ehling, Gallmeyer, Srivastava and Tompaidis (2009) mainly studied the problem of consumption portfolio with increased capital gain taxation. Generally the tax portfolio concept considers the full use of capital losses. But they had shown this common principle generally leading towards counterfactual welfare outcomes. According to them an untaxed investor likes to pay capital gain tax. (Ehling, Gallmeyer, Srivastava and Tompaidis, 2009). Brannon (1974) had discussed about the impact of tax deduction on the level of benevolent donations. Ricardo (1937) viewed that if the quantity of the product taxed could not be reduced, if the assets of the cultivator, for example, could not be removed to other employments, it would not be of any importance that their earnings were decreased below the common level by means of a tax. He assessed that the impact of an equal tax on the profits of the cultivator is specifically the same. As viewed by Organization for Economic Co-operation and Development (2007), for directing tax policy concerning Foreign Direct Investment (FDI), policy forecasters may depend on one or more economic representations or frameworks to inspect probable channels of authorization. In establishing tax burden on inbound venture, policy creators are boosted to review whether their host nation provides striking risk/return prospects, market features and occurrence of local-definite profits. Growing domestic saving rate has been a key policy apprehension for several OECD countries in the past decade since low saving rates can hamper venture, economic development, the balance of payments and monetary steadiness of households. Schnepper (2007) noticed that the accessibility of shifting expenditures subtraction permits a number of very refined tax planning policies. One premeditated tax may take place if one takes into account retirement and a shift to diverse warmer environment. If an individual makes a shift in association with an adjustment in service and assure 39-week work condition, one gets a tax cut for shifting expenses. The tax effect of this deduction, actually, augments the reimbursement and possibly makes it likely to defer the real retirement. Deaton (1998) has conversed that the hypothesis of price reform is directly related to the hypothesis of cost-advantage study, the previous dealing with the consequence on common benefit, the latter with the minute alterations in quantities. Deaton has informed that a good instance will be an outcome of an adjustment in tax charges on tax revenue. According to Barker, Ekins and Johnston (1995), the endowments increased from a carbon tax could be substantial. The macroeconomic consequence of the tax is preserved or recycled through the financial system. As shown by Galabuzi (2006), Survey of Labor and Income Dynamics (SLID) statistics for CSJ foundation for the phase 1996-2001 has exposed a continued double-digit break between the earnings of ethnic group members and other Canadians. The tax effect was trivial in closing the openings. Peel and Haly (1843) tried to show the Malt tax effect of its revoke on cultivators. The only effect of abolishing the malt duty would be to compel the mud lands into aberrant cultivation. Feldstein, Hines and Hubbard (1995) analyzed the tax regulations of the U.S. and other nations, which have planned, and unintentional impacts on the processes of MNCs. They endeavored to enumerate the consequence of tax policy on global investment alternatives. As evaluated by Bubnova and Way (1998), tax counterbalances have been immeasurably controversial. In general, central bureaucrats interrogated are likely to see tax counterbalances as the only feasible way to guarantee that bills are paid. Scully and Caragata (2000) showed the effect of taxation on economic expansion, the trivial cost of taxation, the service effects of taxation, income allotment, the concealed economy and taxation, tax conformity, taxation and insolvency, and approximations of effectual tax rates. Methodology: The main work has been done on the basis of regression analysis. Regression Analysis: This analysis mainly considers the dependence between two group of variable namely the dependent (explained) and independent (explanatory) variable. In case of simple regression we consider only one explanatory variable. The general form of a simple regression model is: Yi=α +βXi+Ui where Yi= explanatory variable. Xi= explained variable. Ui= random error. But in case of multiple regression model more than one explanatory variable is considered. The general form of a multiple regression model is: Yi= α+βX1i+γX2i+δX3i +Vi Here Yi = independent variable. X1i, X2i, X3i = dependent variable. V= random error. The above two type of relationship is known as stochastic relationship, as we are incorporating the error term. The main reason to include the error term is: 1) Include various unpredictable elements that can’t be calculated. 2) To be used as a proxy of a huge number of omitted variables. 3) To measure any kind of error that may present in the dependent variable. This kind of analysis is subject to a number of assumptions: a) Mean of the error term is zero. b) Variance is same for all i. c) There is independence between Ui and Uj for all i not equal to j. d) And finally Xj and Ui are independent of each other for all I not equal to j. The fraction of total sum of squares that can be explained will be denoted as R square. R square= Explained Sum of Squares/Total Sum of Squares. But this R square is not at all sufficient, as it does not take into consideration the degrees of freedom. So instead of usual R Square we consider Adjusted R square. In case of Adjusted R Square the sum of squares are adjusted according to the degrees of freedom. Adjusted R square= [Explained sum of squares/ (n-k)]/ [Total sum of squares/ (n-1)]. Where n = number of variables and k = number of parameters that should be estimated by the model. The Significance level is given by the p value, which is nothing but the probability of type 1 error. By type 1 error we mean rejecting the null hypothesis when it is actually true. So a low level of p value will be beneficial for our purpose of study. In case of testing a single hypothesis we mainly use t test. Generally if our computed value of t exceeds the tabular value, we reject our null hypothesis. The tabular values are calculated on the basis of level of significance. But in case of testing the joint hypothesis the Analysis of Variance method is followed. Here also we will reject Ho if the value of F exceeds the critical value. Analysis and Findings: In this portion the main task is to find whether the savings are affected by the tax rate or not. Yearly data for USA from 1990 to 2008 i.e. for consecutive 19 years is being collected for the purpose on Savings rate, corporate income tax rate, sales tax rate and individual income tax rate. The higher and lower level of income tax is given, so the simple average of this two can be used as a proxy of individual income tax. The table is presented below: Table 1: Year Income Tax (Lowest tax rate %) Income Tax (Highest tax rate %) Average Income Tax Corporate Income tax Sales Tax Savings Rate 1990 15.0 28.0 21.5 39.6 4.954 6.975 1991 15.0 31.0 23 39.6 5.021 7.258333 1992 15.0 31.0 23 39.6 5.068 7.7 1993 15.0 39.6 27.3 39.6 5.09 5.766667 1994 15.0 39.6 27.3 39.6 5.125 4.825 1995 15.0 39.6 27.3 39.6 5.12 4.65 1996 15.0 39.6 27.3 39.6 5.13 4.008333 1997 15.0 39.6 27.3 39.6 5.13 3.65 1998 15.0 39.6 27.3 39.6 5.109 4.316667 1999 15.0 39.6 27.3 39.6 5.135 2.225 2000 15.0 39.6 27.3 39.6 5.128 2.366667 2001 10.0 39.1 24.6 39.1 5.151 1.766667 2002 10.0 38.6 24.3 38.6 5.217 2.358333 2003 10.0 35.0 22.5 15 5.326 2.133333 2004 10.0 35.0 22.5 15 5.318 2.075 2005 10.0 35.0 22.5 15 5.282 0.35 2006 10.0 35.0 22.5 15 5.302 0.733333 2007 10.0 35.0 22.5 15 5.33 0.55 2008 10.0 35.0 22.5 15 5.377 1.783333 (U.S. Department of Commerce: Bureau of Economic Analysis, n.d.; 2008 Sales Tax report, n.d.) For analysis purpose, a multiple regression has been performed on the data set. Savings rate is considered as the dependent variable and average income tax rate, corporate tax rate and sales tax rate is considered as the dependent variable. The null hypothesis is Ho: Savings does not depend on tax rates. The Alt hypothesis is H1: Savings depend on tax rates. Here our model is Savings = α+β Avg income tax+ γ Corporate tax +δ Sales tax +Vi The result of the regression is given below: Table 2: Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .854 .730 .676 1.2966 a Predictors: (Constant), SALEST, ITAVG, CORTAX ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression 68.076 3 22.692 13.497 .000 Residual 25.218 15 1.681 Total 93.294 18 a Predictors: (Constant), SALEST, ITAVG, CORTAX b Dependent Variable: SAVINGS Coefficients Unstandardized Coefficients Standardized Coefficients t Sig. Collinearity Statistics Model B Std. Error Beta Tolerance VIF 1 (Constant) 103.534 35.666 2.903 .011 ITAVG -.171 .214 -.176 -.799 .437 .370 2.704 CORTAX -1.014E-02 .086 -.052 -.118 .908 .092 10.829 SALEST -18.464 6.968 -.950 -2.650 .018 .140 7.132 a Dependent Variable: SAVINGS Results: From table 1 it is clear that the fit is a good fit as the R square is quite high i.e. it is .73 but it is always better to take the decision on the basis of Adjusted R square which considers the degrees of freedom in the model. If the adjusted R square is higher than .55 we can say that the fit is a good one. Here adjusted R square is .676. So, on the basis of Adjusted R square also we conclude that the model is a good fit. F statistic shows the combined explanatory power of all the explanatory variables together. Here the F value is 13.497, which is quite high, and from the significant level it is clear that it is significant at both 5% and 1% levels of significance. If we consider the individual t values then except sales tax all the other two are insignificant in both 5% and 1% level of significance as the significant levels are .437 and .908 which is greater than 0.01, 0.05. So we will accept the null hypothesis over here i.e. savings rate does not depend on individual income tax rate and corporate tax rate. In case of sales tax the t value is significant at 5% level; so only in case of sales tax we can reject the null hypothesis and conclude that it has significant effect on the savings rate. The model is suffering from the problem of multicollinearity, Taken all the explanatory variable together it can explain the model well but not in individual cases. Again in the model the standard error is quite high and the t values are low. Again if we look at the values of VIF (variation inflation factors) those values are quite high even greater than ten. So it is the case of severe multicollinearity. To get rid of the problem of multicollinearity we have performed a multiple regression again but here the explanatory variables will be the individual income tax and the corporate income tax. These two types of tax can affect the savings of an individual directly. Here the null hypothesis is Ho: Savings does not depend on the income tax rate and on the corporate tax rate. The alternate hypothesis is H1: Savings depends on individual and corporate tax. The model is Savings = ζ individual income tax+ η corporate tax + Zi The result of the regression is given below: Table 3: Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .777 .603 .554 1.5212 a Predictors: (Constant), CORTAX, ITAVG ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression 56.271 2 28.135 12.159 .001 Residual 37.023 16 2.314 Total 93.294 18 a Predictors: (Constant), CORTAX, ITAVG b Dependent Variable: SAVINGS Coefficients Unstandardized Coefficients Standardized Coefficients t Sig. Model B Std. Error Beta 1 (Constant) 9.526 4.311 2.209 .042 ITAVG -.500 .204 -.516 -2.448 .026 CORTAX .198 .041 1.017 4.825 .000 a Dependent Variable: SAVINGS Results: Here the R square and Adjusted R square are quite high i.e. .603 and .554, so the fit is a good one. The F value is also high (12.159) and it is significant at 5% level as the value of the significance level is 0.001. If we consider the individual t value then for corporate tax the t value is 4.825 which is greater than three so we are rejecting Ho and conclude that savings rate depends on the corporate tax rate. Significant level shows the p value. P value is the probability of type 1 error; here it is .000, which is lower than 0.05 and 0.01, and shows it is significant. So p value also supports the result, which we have concluded from t value. For corporate tax the modulus value of t lies with in 1 to 3, modulus t = 2.448, so on the basis of t value we cant take any decision, we have to check it with the table. The tabular value for t (with degrees of freedom = 16) 1.746. Here the t value is higher than the tabular value, so we can reject Ho and conclude that personal income tax has significant effect on savings rate. Again if we consider the significance level it is 0.026 which is smaller than 0.05, so on the basis of p value we can conclude the same result. From this analysis it is clear that the savings rate depends on individual income tax rate and corporate tax rate, but the dependence is higher on the corporate tax rate. Again it should find out that the savings rate of individual is affected by the sales tax rate with the help of a simple regression model. In this case also our null hypothesis is Ho: Savings does not depend on the sales tax. Alt hypothesis is H1: Savings depends on the sales tax. The Model is Savings = θ Individual income tax +λ corporate tax + Ri The regression table is given below: Table 4: Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .835 .697 .679 1.2896 a Predictors: (Constant), SALEST ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression 65.019 1 65.019 39.093 .000 Residual 28.274 17 1.663 Total 93.294 18 a Predictors: (Constant), SALEST b Dependent Variable: SAVINGS Coefficients Unstandardized Coefficients Standardized Coefficients t Sig. Model B Std. Error Beta 1 (Constant) 87.406 13.431 6.508 .000 SALEST -16.226 2.595 -.835 -6.252 .000 a Dependent Variable: SAVINGS Results: Here the R square and Adjusted R square are quite high both are .697. Fit is a good one. The F value is also high (39.093) and it is significant at 5% as well as 1% level. If we consider the individual t value then for corporate tax the t value is -6.252. Here we will consider the modulus value of t and as it is greater than 3 we can say that we will be rejecting the null hypothesis. P value is very low over here i.e. 0.00. So p value also supports the result which we have got from t value. So it is evident that the savings rate also depends on the sales tax rate. Any increase in sales tax increases the cost of consumption. Conclusion: In the above analysis the main emphasis was to find the exact relation between savings rate and tax rate rather how savings rate is affected by the tax rate. But here the main emphasis is given to the regression analysis. The results, which have been, generated from one variable regression model as well as multiple regressions model shows a significant relation between the savings rate and tax rate. But this is not the end of the story. Much further work can be done in this field. For example various other kind of tax rate can be taken for this purpose. In case of direct as well as indirect tax, that is, we can use a wide varity of tax rate. Again the work can be done on various other nations both developed and developing. Here the analysis was confined only to US, but other developing country like India can be taken so that a comparative study between two nations can be performed. The data ranged can be increased i.e. by taking a long series of data the change in pattern can easily be noticed. This paper mainly reflects the relation between two variables but the degree of dependence is not mentioned over here. It can be performed in any further studies where the exact degree of dependence among various series can be shown. Again some other time series analysis regarding the pattern of structural change of various series and how the structural change affect the movement of other series can also be tested if the series is very long. Again whether the mean and standard deviation are constant over time i.e. the series are stationary or not can be checked further to see whether any trend is present or not. So in the concluding words it can be said that there is many other scope of research on this particular topic. References: 1. Barker, T, Ekins, P, Johnstone, N, 1995. Global warming and energy demand. Routledge (London). 2. Bradford. F. D., 2000. Taxation, wealth and saving. MIT Press (Cambridge) 3. Brannon, G.M., 1974. The Effect of Tax Deductibility on the Level of Charitable Contributions and Variations on the Theme; the Lock-in Problem for Capital Gains: An Analysis of the 1970-71 Experience; Buildings and the Income Tax. Fund for Public Policy Research (Philadelphia). 4. Brealey. A. R, Myers. C.S., July 1, 2002. Principle Component of Corporate Finance. McGraw Hill Higher Education. (New York) 5. Bubnova, N, Way, L, 1998. Trends in Financing Regional Expenditures in Transition Economies: The Case of Ukraine. World Bank Publications (Washington). 6. Corporate Income Tax rates-2009, 2008, 2007, 2006, 2005, 2004, 2003., n.d. 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Available at http://research.stlouisfed.org/fred2/data/PSAVERT.txt Accessed on 23rd July, 2009. 24. Ricardo, D, 1937. The principles of political economy and taxation. J. M. Dent (London). 25. Savers paying too much tax, July 20, 2009. Available at http://www.telegraph.co.uk/finance/personalfinance/savings/5871433/Savers-paying-too-much-tax.html Accessed on 22nd July, 2009. 26. Schnepper, J.A., 2007. How to Pay Zero Taxes, 2008. McGraw Hill Professional (Chicago). 27. Scully, G.W., Caragata, P.J, 2000. Taxation and the limits of government. Springer (New York). 28. Summers.H.L , August 1984. The after rate of return affects Private Savings. National Bureau of Economic Research (Harvard University). Available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=969311 . Accessed on 22nd July, 2009. 29. Taxation and Portfolio structure: Issued and Implications, April, 2001. National Bureau of Economic Research, Available at http://jobfunctions.bnet.com/abstract.aspx?docid=54009 Accessed on 22nd July, 2009. 30. US Individual Income Tax: Personal Exemptions and Lowest and Highest Bracket Tax rate, And Tax Base for Regular Tax Years 1913-2008., n.d.. Available at http://www.irs.gov/pub/irs-soi/histab23.xls Accessed on 23rd July, 2009. 31. 2008 Sales Tax Report., n.d. Available at http://www.vertexinc.com/PressRoom/PDF/2009/2008-Sales-Tax-Rate-Report-0409.pdf Accessed on 23rd July, 2009. Read More