Originally published as Finance Act commentary in the British Tax Review this paper begins by briefly examining four technical changes to the UK EIS, SEIS and VCT venture capital tax reliefs made by the UK Finance Act 2016. Detailed consideration is then given to the implications that the UK leaving the European Union might have for the future parameters of these tax reliefs. Written on 31st October 2016 the analysis primarily anticipates that either the UK will sever its ties to the EU without an exit deal of any sort being concluded, or that the UK’s departure from the EU will be facilitated by way of an EU/Canada style trade treaty incorporating the WTO 1994 Uruguay Round Subsidies and Countervailing Measures Agreement. The impact of the EU State aid rules manifested in the Risk Capital Guidelines and the General Block Exemption Regulation are compared and contrasted with those of the WTO SCM agreement. The discussion centres particularly on the constitution of a WTO subsidy in terms of benefit flow-through and the respective concepts of EU selectivity and WTO specificity, concluding that there are a number of significant ambiguities concerning the potential WTO treatment.
{"title":"UK Venture Capital Tax Relief Schemes After Brexit","authors":"A. Harper","doi":"10.2139/ssrn.3453211","DOIUrl":"https://doi.org/10.2139/ssrn.3453211","url":null,"abstract":"Originally published as Finance Act commentary in the British Tax Review this paper begins by briefly examining four technical changes to the UK EIS, SEIS and VCT venture capital tax reliefs made by the UK Finance Act 2016. Detailed consideration is then given to the implications that the UK leaving the European Union might have for the future parameters of these tax reliefs. Written on 31st October 2016 the analysis primarily anticipates that either the UK will sever its ties to the EU without an exit deal of any sort being concluded, or that the UK’s departure from the EU will be facilitated by way of an EU/Canada style trade treaty incorporating the WTO 1994 Uruguay Round Subsidies and Countervailing Measures Agreement. The impact of the EU State aid rules manifested in the Risk Capital Guidelines and the General Block Exemption Regulation are compared and contrasted with those of the WTO SCM agreement. The discussion centres particularly on the constitution of a WTO subsidy in terms of benefit flow-through and the respective concepts of EU selectivity and WTO specificity, concluding that there are a number of significant ambiguities concerning the potential WTO treatment.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2016-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125750604","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}
The traditional narrative is that direct taxes in EU remain non-harmonized since decisions in this domain originate solely from intergovernmental bargains, often exemplified as failure of legal, political and economic integration. The article reviews this conventional notion that European tax harmonization process draws truly on national choices of Member States. The study does not out rightly discard the national role in pooling EU-level tax mandate but rather seeks to assign it a temporal dimension under neofunctional integration model. Considering the intergovernmental decision-making in isolation, akin to that of traditional nation-state in the global arena, may create a misleading conception in the EU context. While European Member States might seem to be the sole actors of EU-level tax policymaking, yet there exist other players that shape or even push members’ decision-making processes. To this end, the study seeks to capture the key developments instrumental to the legal, political and economic fusion in the European construct. It concludes that (direct) tax policy domain – a symbol of fiscal sovereignty of Member States and unspoken supranational regime in EU law – is also not impervious to neofunctional political rationale and consequential processes of law-creation.
{"title":"Tax Harmonization in the EU: Insights on Political and Legal Fusion Under Neofunctional Rationale","authors":"Shafi UK Niazi","doi":"10.2139/ssrn.2716904","DOIUrl":"https://doi.org/10.2139/ssrn.2716904","url":null,"abstract":"The traditional narrative is that direct taxes in EU remain non-harmonized since decisions in this domain originate solely from intergovernmental bargains, often exemplified as failure of legal, political and economic integration. The article reviews this conventional notion that European tax harmonization process draws truly on national choices of Member States. The study does not out rightly discard the national role in pooling EU-level tax mandate but rather seeks to assign it a temporal dimension under neofunctional integration model. Considering the intergovernmental decision-making in isolation, akin to that of traditional nation-state in the global arena, may create a misleading conception in the EU context. While European Member States might seem to be the sole actors of EU-level tax policymaking, yet there exist other players that shape or even push members’ decision-making processes. To this end, the study seeks to capture the key developments instrumental to the legal, political and economic fusion in the European construct. It concludes that (direct) tax policy domain – a symbol of fiscal sovereignty of Member States and unspoken supranational regime in EU law – is also not impervious to neofunctional political rationale and consequential processes of law-creation.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2016-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126222082","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}
Juha-Pekka Kallunki, Jenni Mikkonen, Henrik Nilsson, Hanna Setterberg
This paper explores whether insiders who have shown noncompliance with the tax law (‘noncompliant insiders’) are more prone to exploit their information advantage in insider trading, compared to other insiders (‘compliant insiders’). Our empirical results from analyzing archival data of all insider trades in Sweden show that noncompliant insiders use more of their information advantage to trade their insider stocks shortly before significant stock price changes, compared to compliant insiders. These results remain similar after controlling for various insider- and firm-specific determinants of insider returns, including firm and year fixed effects. We believe that our results are of interest for academics and regulatory authorities monitoring and screening insider trading activity.
{"title":"Tax Noncompliance and Insider Trading","authors":"Juha-Pekka Kallunki, Jenni Mikkonen, Henrik Nilsson, Hanna Setterberg","doi":"10.2139/ssrn.2476888","DOIUrl":"https://doi.org/10.2139/ssrn.2476888","url":null,"abstract":"This paper explores whether insiders who have shown noncompliance with the tax law (‘noncompliant insiders’) are more prone to exploit their information advantage in insider trading, compared to other insiders (‘compliant insiders’). Our empirical results from analyzing archival data of all insider trades in Sweden show that noncompliant insiders use more of their information advantage to trade their insider stocks shortly before significant stock price changes, compared to compliant insiders. These results remain similar after controlling for various insider- and firm-specific determinants of insider returns, including firm and year fixed effects. We believe that our results are of interest for academics and regulatory authorities monitoring and screening insider trading activity.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134415805","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 shows that a reduction in tax discrimination between debt and equity funding leads to better capitalized financial institutions. The paper exploits exogenous variation in the tax treatment of debt and equity created by the introduction of a tax shield for equity. The results demonstrate that a more equal treatment of debt and equity increases bank capital ratios, driven by an increase in common equity. The change also leads to a significant reduction in risk taking for ex-ante low capitalized banks. Overall, the findings suggest that tax shields could be a valuable and innovative policy tool for bank regulators.
{"title":"Taxes and Bank Capital Structure","authors":"G. Schepens","doi":"10.2139/ssrn.2519533","DOIUrl":"https://doi.org/10.2139/ssrn.2519533","url":null,"abstract":"This paper shows that a reduction in tax discrimination between debt and equity funding leads to better capitalized financial institutions. The paper exploits exogenous variation in the tax treatment of debt and equity created by the introduction of a tax shield for equity. The results demonstrate that a more equal treatment of debt and equity increases bank capital ratios, driven by an increase in common equity. The change also leads to a significant reduction in risk taking for ex-ante low capitalized banks. Overall, the findings suggest that tax shields could be a valuable and innovative policy tool for bank regulators.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126694248","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}
Assessing the effects of subsidies is complicated, given the need to consider linkages within and across supply chain networks. A precondition for determining whether existing WTO disciplines on subsidies are adequate is better information and more empirical research on the extent to which negative international spillovers are created by prevailing policies. Many of the policies that affect supply chain operations are not considered subsidies under the WTO. There are no rules on subsidies for services or investment incentives. Conversely, some WTO rules may not be appropriate or effective given the increasing prevalence of value chains. There is an urgent need for policy analysis to determine how existing WTO disciplines impact on value chain s and whether and how large the negative spillovers are of national policies. A necessary condition for any such determination is much better data on the measures that are employed by governments around the world, both at the central and sub-central levels.
{"title":"Subsidies and Spillovers in a Value Chain World: New Rules Required?","authors":"B. Hoekman","doi":"10.2139/ssrn.2637264","DOIUrl":"https://doi.org/10.2139/ssrn.2637264","url":null,"abstract":"Assessing the effects of subsidies is complicated, given the need to consider linkages within and across supply chain networks. A precondition for determining whether existing WTO disciplines on subsidies are adequate is better information and more empirical research on the extent to which negative international spillovers are created by prevailing policies. Many of the policies that affect supply chain operations are not considered subsidies under the WTO. There are no rules on subsidies for services or investment incentives. Conversely, some WTO rules may not be appropriate or effective given the increasing prevalence of value chains. There is an urgent need for policy analysis to determine how existing WTO disciplines impact on value chain s and whether and how large the negative spillovers are of national policies. A necessary condition for any such determination is much better data on the measures that are employed by governments around the world, both at the central and sub-central levels.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117157413","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 the period under review, a large number of regulatory documents aimed at coping with crisis phenomena in the economy were released. The main guidelines for the RF Government’s acIn the period under review, a large number of regulatory documents aimed at coping with crisis phenomena in the economy were released. The main guidelines for the RF Government’s activities in the period till 2018 (the revised version as of 14 May 2015) and Federal Law No.87-FZ of 20 April 2015 on The Reporting by the Government of the Russian Federation and Information by the Central Bank of the Russian Federation on Implementation of the Plan of Priority Measures Aimed at Ensuring of Sustained Development of the Economy and Social Stability in 2015 were approved; fi nancial agencies approved documents aimed at preventi on of channels of tax evasion (unfortunately, not always indisputable ones); explanations on application of provisions of the Tax Code of the Russian Federation were prepared and regulatory documents of other economic agencies dealing with organization of economic relations in present-day conditions were released. In our view, in the situation of fi nancial instability one of the most complicated and topical lines of the RF Government’s activities is development of the strategy of behavior in respect of natural monopolies and other state monopolies which operate in the economy.vities in the period till 2018 (the revised version as of 14 May 2015) and Federal Law No.87-FZ of 20 April 2015 on The Reporting by the Government of the Russian Federation and Information by the Central Bank of the Russian Federation on Implementation of the Plan of Priority Measures Aimed at Ensuring of Sustained Development of the Economy and Social Stability in 2015 were approved; fi nancial agencies approved documents aimed at prevention of channels of tax evasion (unfortunately, not always indisputable ones); explanations on application of provisions of the Tax Code of the Russian Federation were prepared and regulatory documents of other economic agencies dealing with organization of economic relations in present-day conditions were released. In our view, in the situation of fi nancial instability one of the most complicated and topical lines of the RF Government’s activities is development of the strategy of behavior in respect of natural monopolies and other state monopolies which operate in the economy.
{"title":"The Review of Regulatory Documents on Taxation Issues in April-May 2015","authors":"Ludmila Anisimova","doi":"10.2139/SSRN.2620671","DOIUrl":"https://doi.org/10.2139/SSRN.2620671","url":null,"abstract":"In the period under review, a large number of regulatory documents aimed at coping with crisis phenomena in the economy were released. The main guidelines for the RF Government’s acIn the period under review, a large number of regulatory documents aimed at coping with crisis phenomena in the economy were released. The main guidelines for the RF Government’s activities in the period till 2018 (the revised version as of 14 May 2015) and Federal Law No.87-FZ of 20 April 2015 on The Reporting by the Government of the Russian Federation and Information by the Central Bank of the Russian Federation on Implementation of the Plan of Priority Measures Aimed at Ensuring of Sustained Development of the Economy and Social Stability in 2015 were approved; fi nancial agencies approved documents aimed at preventi on of channels of tax evasion (unfortunately, not always indisputable ones); explanations on application of provisions of the Tax Code of the Russian Federation were prepared and regulatory documents of other economic agencies dealing with organization of economic relations in present-day conditions were released. In our view, in the situation of fi nancial instability one of the most complicated and topical lines of the RF Government’s activities is development of the strategy of behavior in respect of natural monopolies and other state monopolies which operate in the economy.vities in the period till 2018 (the revised version as of 14 May 2015) and Federal Law No.87-FZ of 20 April 2015 on The Reporting by the Government of the Russian Federation and Information by the Central Bank of the Russian Federation on Implementation of the Plan of Priority Measures Aimed at Ensuring of Sustained Development of the Economy and Social Stability in 2015 were approved; fi nancial agencies approved documents aimed at prevention of channels of tax evasion (unfortunately, not always indisputable ones); explanations on application of provisions of the Tax Code of the Russian Federation were prepared and regulatory documents of other economic agencies dealing with organization of economic relations in present-day conditions were released. In our view, in the situation of fi nancial instability one of the most complicated and topical lines of the RF Government’s activities is development of the strategy of behavior in respect of natural monopolies and other state monopolies which operate in the economy.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130417843","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}
The purpose of this paper is to estimate how much revenue might feasibly be generated by closing loopholes in the UK Government’s stamp duty tax on share transactions. We focus predominantly on preventing abuse of intermediary relief (sometimes known as the market-makers’ exemption). We use estimates of the elasticity of turnover to an increase in transaction costs, estimates of turnover attributed to market-makers but related to the hedging of derivative transactions by hedge funds and other short-term traders rather than market-making activities and we sum all marginal transaction costs, including price-impact, dealing spreads, clearing and settlement costs. There is a tendency by industry participants to focus on only partial transaction costs, thereby exaggerating the impact of the tax on tunover. We estimate that taking into account the likely reduction in turnover, preventing abuse of the market-makers exemption would raise approximately £1.2bn to £1.8bn in additional tax revenues, leading to an increase in total revenues from £3.1bn to £4.3bn to £4.9bn.
{"title":"Closing the Stamp Duty Loophole","authors":"A. Persaud","doi":"10.2139/ssrn.2563303","DOIUrl":"https://doi.org/10.2139/ssrn.2563303","url":null,"abstract":"The purpose of this paper is to estimate how much revenue might feasibly be generated by closing loopholes in the UK Government’s stamp duty tax on share transactions. We focus predominantly on preventing abuse of intermediary relief (sometimes known as the market-makers’ exemption). We use estimates of the elasticity of turnover to an increase in transaction costs, estimates of turnover attributed to market-makers but related to the hedging of derivative transactions by hedge funds and other short-term traders rather than market-making activities and we sum all marginal transaction costs, including price-impact, dealing spreads, clearing and settlement costs. There is a tendency by industry participants to focus on only partial transaction costs, thereby exaggerating the impact of the tax on tunover. We estimate that taking into account the likely reduction in turnover, preventing abuse of the market-makers exemption would raise approximately £1.2bn to £1.8bn in additional tax revenues, leading to an increase in total revenues from £3.1bn to £4.3bn to £4.9bn.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132584008","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}
Various contributions to the recent literature on congestion pricing have demonstrated that when services at a congestible facility are provided by operators with market power, the case in point often being a few airlines jointly using a congested airport, optimal congestion pricing rules deviate from the familiar Pigouvian rule that tolls be equal to the marginal external costs. The reason is that an operator with market power has an incentive to internalize the congestion effects that its customers and vehicles impose upon one-another, so that Pigouvian tolling would lead to overpricing of congestion. More recent contributions to this literature, however, have brought to the fore that when congestion at the facility takes on the form of dynamic bottleneck congestion a la Vickrey (1969), where trip scheduling is the key behavioural margin, there may exist no Nash e quilibrium in arrival schedules for oligopolistic operators also under rather plausible assumptions on parameters. This paper investigates whether in such cases, an equilibrium does exist for another congestion technology, namely the Henderson-Chu dynamic model of flow congestion. We find that a stable and unique equilibrium exists also in cases where it fails to exist under bottleneck congestion (notably when the value of schedule late exceeds the value of travel delays). Our results suggest that self-internalization with only two firms leads to a considerable efficiency gain compared to the atomistic equilibrium (83% or more of the gain from first-best pricing in our numerical exercises).
{"title":"Dynamic Equilibrium at a Congestible Facility Under Market Power","authors":"E. Verhoef, Hugo E. Silva","doi":"10.2139/ssrn.2588949","DOIUrl":"https://doi.org/10.2139/ssrn.2588949","url":null,"abstract":"Various contributions to the recent literature on congestion pricing have demonstrated that when services at a congestible facility are provided by operators with market power, the case in point often being a few airlines jointly using a congested airport, optimal congestion pricing rules deviate from the familiar Pigouvian rule that tolls be equal to the marginal external costs. The reason is that an operator with market power has an incentive to internalize the congestion effects that its customers and vehicles impose upon one-another, so that Pigouvian tolling would lead to overpricing of congestion. More recent contributions to this literature, however, have brought to the fore that when congestion at the facility takes on the form of dynamic bottleneck congestion a la Vickrey (1969), where trip scheduling is the key behavioural margin, there may exist no Nash e quilibrium in arrival schedules for oligopolistic operators also under rather plausible assumptions on parameters. This paper investigates whether in such cases, an equilibrium does exist for another congestion technology, namely the Henderson-Chu dynamic model of flow congestion. We find that a stable and unique equilibrium exists also in cases where it fails to exist under bottleneck congestion (notably when the value of schedule late exceeds the value of travel delays). Our results suggest that self-internalization with only two firms leads to a considerable efficiency gain compared to the atomistic equilibrium (83% or more of the gain from first-best pricing in our numerical exercises).","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122542168","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. Duran-Cabré, Alejandro Esteller-Moré, L. Salvadori
The literature on horizontal tax interdependence pays limited attention to interactions in administrative policies, although they can play a large role in determining the amount of tax revenues collected. We investigate the incentives for sub-central tax authority cooperation in a decentralized context, with the aim of identifying the determinants of that cooperation. Our results are congruent with standard theory; in particular, the existence of reciprocity is essential for sharing tax information, but there is sluggishness in this process, which is partly the result of the short-sighted behaviour of tax authorities influenced by budget constraints. Hence, this is good news for the functioning of a decentralized tax administration, as in the medium-long run the gains to be made from sharing tax information are achieved.
{"title":"Empirical Evidence on Tax Cooperation Between Sub-Central Administrations","authors":"J. Duran-Cabré, Alejandro Esteller-Moré, L. Salvadori","doi":"10.2139/ssrn.2580145","DOIUrl":"https://doi.org/10.2139/ssrn.2580145","url":null,"abstract":"The literature on horizontal tax interdependence pays limited attention to interactions in administrative policies, although they can play a large role in determining the amount of tax revenues collected. We investigate the incentives for sub-central tax authority cooperation in a decentralized context, with the aim of identifying the determinants of that cooperation. Our results are congruent with standard theory; in particular, the existence of reciprocity is essential for sharing tax information, but there is sluggishness in this process, which is partly the result of the short-sighted behaviour of tax authorities influenced by budget constraints. Hence, this is good news for the functioning of a decentralized tax administration, as in the medium-long run the gains to be made from sharing tax information are achieved.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130514101","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 addresses the problem of the normative evaluation of income tax systems and income tax reforms. While most of the existing criteria, framed in the utilitarian tradition, are uniquely based on information about individual incomes, this paper, building upon the opportunity egalitarian theory, proposes new equity criteria which take into account also the socio-economic characteristics of individuals. Suitable dominance conditions that can be used to rank alternative tax systems are derived by means of an axiomatic approach. Moreover, the theoretical results are used to assess the redistributive effects of an hypothetical tax reform in Romania through a microsimulation analysis.
{"title":"Income Taxation and Equity: New Dominance Criteria and an Application to Romania","authors":"P. Brunori, F. Palmisano, Vito Peragine","doi":"10.2139/ssrn.2523800","DOIUrl":"https://doi.org/10.2139/ssrn.2523800","url":null,"abstract":"This paper addresses the problem of the normative evaluation of income tax systems and income tax reforms. While most of the existing criteria, framed in the utilitarian tradition, are uniquely based on information about individual incomes, this paper, building upon the opportunity egalitarian theory, proposes new equity criteria which take into account also the socio-economic characteristics of individuals. Suitable dominance conditions that can be used to rank alternative tax systems are derived by means of an axiomatic approach. Moreover, the theoretical results are used to assess the redistributive effects of an hypothetical tax reform in Romania through a microsimulation analysis.","PeriodicalId":105680,"journal":{"name":"ERN: Taxation","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114432420","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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