This paper investigates the impact of tax base mobility on local taxation. We first develop a theoretical model in order to examine the connection between local business property taxation and tax base mobility within a metropolitan area. We find that decreasing capital intensity in the tax base increases the business property tax rates unambiguously. We then test this result using a French reform, which changes the composition of the main local business tax base in 2010. Estimations using Difference-in-Differences show that the reduction in the mobility of the tax base indeed results in higher business property tax rates. Housing tax rates were not affected by the reform. (This abstract was borrowed from another version of this item.)
{"title":"Local Taxation and Tax Base Mobility: Evidence from a Business Tax Reform in France","authors":"Tidiane Ly, S. Paty","doi":"10.2139/ssrn.3194037","DOIUrl":"https://doi.org/10.2139/ssrn.3194037","url":null,"abstract":"This paper investigates the impact of tax base mobility on local taxation. We first develop a theoretical model in order to examine the connection between local business property taxation and tax base mobility within a metropolitan area. We find that decreasing capital intensity in the tax base increases the business property tax rates unambiguously. We then test this result using a French reform, which changes the composition of the main local business tax base in 2010. Estimations using Difference-in-Differences show that the reduction in the mobility of the tax base indeed results in higher business property tax rates. Housing tax rates were not affected by the reform. (This abstract was borrowed from another version of this item.)","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-07-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122340540","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We estimate the consumption response of Italian households to the “€80 tax bonus” introduced in 2014, using the panel component on the Survey of Household Income and Wealth. We find that households that received the tax rebate increased their monthly consumption of food and means of transportation by about €20 and €30, respectively, about 50-60 per cent of the total bonus. There was a larger increase for households with low liquid wealth or low income. Our estimates are quite robust to different model specifications and are broadly in line with the evidence available from similar tax rebates in other countries but, due to the small sample size, are not always statistically significant. To understand the mechanism behind our results we then simulate an overlapping generations model of household consumption: the marginal propensity to consume generated by the structural model is in line with our empirical estimates. JEL Classification: D12, E21
我们利用《家庭收入和财富调查》(Survey of Household Income and Wealth)的面板组件，估计了意大利家庭对2014年推出的“80欧元税收奖励”的消费反应。我们发现，获得退税的家庭每月在食品和交通工具上的消费分别增加了约20欧元和30欧元，约占总奖金的50%至60%。流动性财富较低或收入较低的家庭的收入增幅较大。我们的估计对不同的模型规格相当稳健，并且与其他国家类似退税的证据大致一致，但由于样本量小，并不总是具有统计学意义。为了理解我们的结果背后的机制，我们模拟了一个家庭消费的代际重叠模型:由结构模型产生的边际消费倾向与我们的经验估计一致。JEL分类:D12, E21
{"title":"Household Spending Out of a Tax Rebate: Italian '€80 Tax Bonus'","authors":"A. Neri, C. Rondinelli, Filippo Scoccianti","doi":"10.2139/ssrn.3047180","DOIUrl":"https://doi.org/10.2139/ssrn.3047180","url":null,"abstract":"We estimate the consumption response of Italian households to the “€80 tax bonus” introduced in 2014, using the panel component on the Survey of Household Income and Wealth. We find that households that received the tax rebate increased their monthly consumption of food and means of transportation by about €20 and €30, respectively, about 50-60 per cent of the total bonus. There was a larger increase for households with low liquid wealth or low income. Our estimates are quite robust to different model specifications and are broadly in line with the evidence available from similar tax rebates in other countries but, due to the small sample size, are not always statistically significant. To understand the mechanism behind our results we then simulate an overlapping generations model of household consumption: the marginal propensity to consume generated by the structural model is in line with our empirical estimates. JEL Classification: D12, E21","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132643710","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This report evaluates ‘under-declared employment’, which is the practice where a formal employer pays a formal employee an official declared wage but also an additional undeclared (envelope) wage in order to evade the full social insurance and tax liabilities owed. The aim is to evaluate the prevalence, characteristics and distribution of this fraudulent wage practice in Croatia, to explain its existence, and to provide an evidence-based evaluation of the different policy approaches for tackling it, and a set of policy recommendations.
{"title":"Assessment of Under-Declared Employment in Croatia","authors":"Colin Williams, Marek Radvanský, M. Štefánik","doi":"10.2139/SSRN.2983261","DOIUrl":"https://doi.org/10.2139/SSRN.2983261","url":null,"abstract":"This report evaluates ‘under-declared employment’, which is the practice where a formal employer pays a formal employee an official declared wage but also an additional undeclared (envelope) wage in order to evade the full social insurance and tax liabilities owed. The aim is to evaluate the prevalence, characteristics and distribution of this fraudulent wage practice in Croatia, to explain its existence, and to provide an evidence-based evaluation of the different policy approaches for tackling it, and a set of policy recommendations.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122989738","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. Burkhauser, N. Hérault, S. Jenkins, Roger Wilkins
Survey under-coverage of top incomes leads to bias in survey-based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK’s pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principal income distribution series (reported annually in Households Below Average Income) has been based on household survey data in which the incomes of a small number of ‘very rich’ individuals are adjusted using information from ‘very rich’ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under-coverage of top incomes, and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries.
{"title":"Survey Under-Coverage of Top Incomes and Estimation of Inequality: What Is the Role of the UK's SPI Adjustment?","authors":"R. Burkhauser, N. Hérault, S. Jenkins, Roger Wilkins","doi":"10.2139/ssrn.2991427","DOIUrl":"https://doi.org/10.2139/ssrn.2991427","url":null,"abstract":"Survey under-coverage of top incomes leads to bias in survey-based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK’s pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principal income distribution series (reported annually in Households Below Average Income) has been based on household survey data in which the incomes of a small number of ‘very rich’ individuals are adjusted using information from ‘very rich’ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under-coverage of top incomes, and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123471565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In Japan’s hometown tax donation system, people can donate to municipalities where they are not resident and in return receive reciprocal gifts from the local governments of those municipalities. A large part of the donated amount can be deducted from their income and residence taxes. This study examined altruistic and selfish motivations in donating money to municipalities where people are not resident through that donation system; we did so using panel data of local governments for 2008–2015. We made the following key findings. (1) The Great East Japan earthquake increased the amount of money donated through that system for local governments with disaster victims. We considered that motivation altruistic. (2) A 1% increase in expenditure for gifts to donors led to a 0.61% increase in donations. We considered that motivation selfish. (3) Compared with donors not receiving gifts, providing gifts to donors led to a reduction in altruistic donations by almost 300%.
{"title":"Altruistic and Selfish Motivations of Charitable Giving: Case of the Hometown Tax Donation System","authors":"Eiji Yamamura, Y. Tsutsui, F. Ohtake","doi":"10.2139/ssrn.2968260","DOIUrl":"https://doi.org/10.2139/ssrn.2968260","url":null,"abstract":"In Japan’s hometown tax donation system, people can donate to municipalities where they are not resident and in return receive reciprocal gifts from the local governments of those municipalities. A large part of the donated amount can be deducted from their income and residence taxes. This study examined altruistic and selfish motivations in donating money to municipalities where people are not resident through that donation system; we did so using panel data of local governments for 2008–2015. We made the following key findings. (1) The Great East Japan earthquake increased the amount of money donated through that system for local governments with disaster victims. We considered that motivation altruistic. (2) A 1% increase in expenditure for gifts to donors led to a 0.61% increase in donations. We considered that motivation selfish. (3) Compared with donors not receiving gifts, providing gifts to donors led to a reduction in altruistic donations by almost 300%.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132056521","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents baseline results from the latest version of EUROMOD (version G4.0+), the tax-benefit microsimulation model for the EU. First, we briefly report the process of updating EUROMOD. We then present indicators for income inequality and risk of poverty using EUROMOD and discuss the main reasons for differences between these and EU-SILC based indicators. We further compare EUROMOD distributional indicators across all EU 28 countries and over time between 2011 and 2016. Finally, we provide estimates of marginal effective tax rates (METR) for all 28 EU countries in order to explore the effect of tax and benefit systems on work incentives at the intensive margin. For a subset of countries for which 2014 EU-SILC data are available in EUROMOD, we also compare poverty and inequality indicators and METR across countries and over time between 2013 and 2016. Throughout the paper, we highlight both the potential of EUROMOD as a tool for policy analysis and the caveats that should be borne in mind when using it and interpreting results. This paper updates the work conducted in the EUROMOD Working Paper EM3/16.
{"title":"Baseline Results From the EU28 EUROMOD: 2011–2016","authors":"Mattia Makovec, Miko Tammik","doi":"10.2139/ssrn.3302025","DOIUrl":"https://doi.org/10.2139/ssrn.3302025","url":null,"abstract":"This paper presents baseline results from the latest version of EUROMOD (version G4.0+), the tax-benefit microsimulation model for the EU. First, we briefly report the process of updating EUROMOD. We then present indicators for income inequality and risk of poverty using EUROMOD and discuss the main reasons for differences between these and EU-SILC based indicators. We further compare EUROMOD distributional indicators across all EU 28 countries and over time between 2011 and 2016. Finally, we provide estimates of marginal effective tax rates (METR) for all 28 EU countries in order to explore the effect of tax and benefit systems on work incentives at the intensive margin. For a subset of countries for which 2014 EU-SILC data are available in EUROMOD, we also compare poverty and inequality indicators and METR across countries and over time between 2013 and 2016. Throughout the paper, we highlight both the potential of EUROMOD as a tool for policy analysis and the caveats that should be borne in mind when using it and interpreting results. This paper updates the work conducted in the EUROMOD Working Paper EM3/16.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126147900","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper documents methodology underlying the construction of the integrated data base for our study on “Wer tragt die Steuerlast in Deutschland? - Verteilungswirkungen des deutschen Steuer- und Transfersystems” (Who bears the tax burden in Germany? – Distributional Analyses of the German tax and transfer system). Financial support from the Hans Bockler Stiftung for the project is gratefully acknowledged. The paper greatly benefited from comments by the members of the scientific advisory council of the project.
{"title":"An Integrated Micro Data Base for Tax Analysis in Germany","authors":"Stefan Bach, Martin Beznoska, Viktor Steiner","doi":"10.2139/ssrn.3013633","DOIUrl":"https://doi.org/10.2139/ssrn.3013633","url":null,"abstract":"This paper documents methodology underlying the construction of the integrated data base for our study on “Wer tragt die Steuerlast in Deutschland? - Verteilungswirkungen des deutschen Steuer- und Transfersystems” (Who bears the tax burden in Germany? – Distributional Analyses of the German tax and transfer system). Financial support from the Hans Bockler Stiftung for the project is gratefully acknowledged. The paper greatly benefited from comments by the members of the scientific advisory council of the project.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133210885","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. Graham, Michelle Hanlon, T. Shevlin, Nemit Shroff
We survey companies and find that many use incorrect tax rate inputs into important corporate decisions. Specifically, many companies use an average tax rate (the GAAP effective tax rate, ETR) to evaluate incremental decisions, rather than using the theoretically correct marginal tax rate. We find evidence consistent with behavioral biases (heuristics, salience) and managers’ educational backgrounds affecting these choices. We estimate the economic consequences of using the theoretically incorrect tax rate and find that using the ETR for capital structure decisions leads to suboptimal leverage choices and using the ETR in investment decisions makes firms less responsive to investment opportunities.
{"title":"Tax Rates and Corporate Decision Making","authors":"J. Graham, Michelle Hanlon, T. Shevlin, Nemit Shroff","doi":"10.2139/ssrn.2548641","DOIUrl":"https://doi.org/10.2139/ssrn.2548641","url":null,"abstract":"We survey companies and find that many use incorrect tax rate inputs into important corporate decisions. Specifically, many companies use an average tax rate (the GAAP effective tax rate, ETR) to evaluate incremental decisions, rather than using the theoretically correct marginal tax rate. We find evidence consistent with behavioral biases (heuristics, salience) and managers’ educational backgrounds affecting these choices. We estimate the economic consequences of using the theoretically incorrect tax rate and find that using the ETR for capital structure decisions leads to suboptimal leverage choices and using the ETR in investment decisions makes firms less responsive to investment opportunities.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130205761","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
João Félix Pinto Nogueira, Francisco Alfredo Garcia Prats, W. Haslehner, Volker Heydt, E. Kemmeren, G. Kofler, M. Lang, P. Pistone, Stella Raventos-Calvo, Emmanuel Raingeard de la Blétière, Isabelle Richelle, A. Rust, Rupert Shiers
This article examines the decision of the CJEU in Brisal and KBC Finance Ireland (Case C-18/15) of 13 July 2016. Following a Portuguese reference for a preliminary ruling, the Court's decision provides further clarification on the permissibility of withholding taxation within the European Union. In relation to interest, the Court held that non-resident taxpayers may be subject to withholding taxes (even if comparable residents pursuing the same activity are not) but that non-residents may nevertheless not be taxed on gross income (when comparable residents are taxed on net profits) and are, therefore, entitled to deduct expenses directly connected to their business activity.
{"title":"OS ECJ-TF 2/2016 on the Decision of the Court of Justice of the European Union of 13 July 2016 in Brisal and KBC Finance Ireland (Case C-18/15), on the Admissibility of Gross Withholding Tax of Interest","authors":"João Félix Pinto Nogueira, Francisco Alfredo Garcia Prats, W. Haslehner, Volker Heydt, E. Kemmeren, G. Kofler, M. Lang, P. Pistone, Stella Raventos-Calvo, Emmanuel Raingeard de la Blétière, Isabelle Richelle, A. Rust, Rupert Shiers","doi":"10.2139/ssrn.3644425","DOIUrl":"https://doi.org/10.2139/ssrn.3644425","url":null,"abstract":"This article examines the decision of the CJEU in Brisal and KBC Finance Ireland (Case C-18/15) of 13 July 2016. Following a Portuguese reference for a preliminary ruling, the Court's decision provides further clarification on the permissibility of withholding taxation within the European Union. In relation to interest, the Court held that non-resident taxpayers may be subject to withholding taxes (even if comparable residents pursuing the same activity are not) but that non-residents may nevertheless not be taxed on gross income (when comparable residents are taxed on net profits) and are, therefore, entitled to deduct expenses directly connected to their business activity.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2016-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130239590","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Since the mid-1990s, Italy’s economic growth faltered, primarily due to sluggish productivity growth. This article investigates the root causes of the slow growth. Firstly, it benchmarks Italy over time visa-vis euro area and OECD countries in the area of human capital, product market regulation, taxation structure and innovation. The analysis shows that Italy's gaps in these areas have grown over the last 15 years and are particularly large for human capital. Secondly, it uses a set of stylized simulations in QUEST R&D model of the European Commission to assess the potential impact of a package of growth-enhancing reforms in these areas. The simulations show that structural reforms could boost productivity and GDP growth significantly. Important reforms are ongoing. Given the very nature and the size of the gaps, it is important that the reform momentum is maintained.
{"title":"Exploring Italy's Growth Challenge: A Model-Based Exercise","authors":"D. Pinelli, Istvan P. Szekely, J. Varga","doi":"10.2139/ssrn.3407394","DOIUrl":"https://doi.org/10.2139/ssrn.3407394","url":null,"abstract":"Since the mid-1990s, Italy’s economic growth faltered, primarily due to sluggish productivity growth. This article investigates the root causes of the slow growth. Firstly, it benchmarks Italy over time visa-vis euro area and OECD countries in the area of human capital, product market regulation, taxation structure and innovation. The analysis shows that Italy's gaps in these areas have grown over the last 15 years and are particularly large for human capital. Secondly, it uses a set of stylized simulations in QUEST R&D model of the European Commission to assess the potential impact of a package of growth-enhancing reforms in these areas. The simulations show that structural reforms could boost productivity and GDP growth significantly. Important reforms are ongoing. Given the very nature and the size of the gaps, it is important that the reform momentum is maintained.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128222266","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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