Many retirees will not have enough money from conventional retirement programs to maintain their standard of living once they stop working. To help support themselves, they will need to tap their home equity, the major asset for most middle-income older households. Yet tapping home equity is difficult: most people are reluctant to downsize and, even when they do, they rarely reduce their housing expenses. Reverse mortgages are an option, but most households are put off by the enormity of the decision, the complexity of the product, and the high up-front costs. A statewide property tax deferral program overcomes the hurdles to accessing home equity. Property tax deferral does not provide access to as much home equity as a reverse mortgage, but the offsetting advantage is that some of the house value after the repayment of the loan and interest will be available for a bequest. At the household level, the proposed program is revenue-neutral: all taxes owed by a participating household are paid back, with interest sufficient to cover borrowing costs and administrative expenses. But because loans are made well in advance of repayments, the sponsor of the plan must cover start-up costs. In Massachusetts, if the state government simply borrowed money to cover the annual outlays, the state’s ratio of debt-to-GSP would rise from 14.0 percent to 15.1 percent. The alternative is to involve the private sector. This decision would raise the costs to homeowners, but nevertheless it may be necessary to get a broad-based program up and running.
{"title":"Property Tax Deferral: Can a Public/Private Partnership Help Provide Lifetime Income?","authors":"A. Munnell, Wenliang Hou, Abigail N. Walters","doi":"10.2139/ssrn.3636483","DOIUrl":"https://doi.org/10.2139/ssrn.3636483","url":null,"abstract":"Many retirees will not have enough money from conventional retirement programs to maintain their standard of living once they stop working. To help support themselves, they will need to tap their home equity, the major asset for most middle-income older households. Yet tapping home equity is difficult: most people are reluctant to downsize and, even when they do, they rarely reduce their housing expenses. Reverse mortgages are an option, but most households are put off by the enormity of the decision, the complexity of the product, and the high up-front costs. A statewide property tax deferral program overcomes the hurdles to accessing home equity. Property tax deferral does not provide access to as much home equity as a reverse mortgage, but the offsetting advantage is that some of the house value after the repayment of the loan and interest will be available for a bequest. At the household level, the proposed program is revenue-neutral: all taxes owed by a participating household are paid back, with interest sufficient to cover borrowing costs and administrative expenses. But because loans are made well in advance of repayments, the sponsor of the plan must cover start-up costs. In Massachusetts, if the state government simply borrowed money to cover the annual outlays, the state’s ratio of debt-to-GSP would rise from 14.0 percent to 15.1 percent. The alternative is to involve the private sector. This decision would raise the costs to homeowners, but nevertheless it may be necessary to get a broad-based program up and running.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"183 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123519786","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}
Pub Date : 2020-06-19DOI: 10.17323/j.jcfr.2073-0438.14.1.2020.80-90
L. Polezharova
This article is devoted to development of mathematical models for resolving an actual scientific challenge in the field of corporate finance. This involves substantiating taxation policies for the counter-acting tax planning of multinational companies (MNC), and then devising and articulating the appropriate international taxation scheme, as evaluated from the position of national welfare policy. Based on an analysis of existing models of international taxation, and on the peculiarities of the actual mechanism of capital movement tax regulation, new models with equilibrium postulated have been developed. The primary mechanisms of this research involve the following considerations: (1) examination of an approach targeted at the determination of the final outcomes of international taxation from the perspective of national economies; (2) measures of tax planning on the part of MNCs, and corresponding counter-acting measures to the tax planning applied by governments, are taken as a complex. Our results indicate that because a government uses rules of controlled transactions, in order to counter-act MNCs’ tax planning, for the government the final outcome from an application of these rules may be negative. This is due to a possibility of MNCs’ development in convenient and offshore jurisdictions. This finding is illustrated by means of an approbation of models with a case study involving a three-tier structure.Further to this point, instead of additional revenues, a government is at a risk of a shrinking tax base and a reduction in budget revenues; and moreover from the perspective of national welfare, the additional loss of revenues and capital of MNCs. Therefore there is a significant importance in forming rules for MNC taxation policies which would focus not on taxes as such, but would focus on trying to keep capital within the territory and/or would facilitate the return of earlier divested income. This could be attempted, for example, by using the secondary adjustment rule in conjunction with a minimum tax on return. The novelty of this research resides in the specificity of our investigation and the applicability of our conclusions to the practical challenges of international taxation and national revenue policies. The peculiarities of this economic moment and the crucial challenges for national governments in dealing with MNCs and the digital economy underline the significance of this study. Our results expand and develop the existing literature in this ever-crucial area be of immediate use to policymakers, academics and administrators involved in national and international taxation, finance, economics, and analysis.
{"title":"Assessment of Measures for Tax Regulation of Transfer Pricing from the Standpoint of National Welfare (Оценка мер по налоговому регулированию трансфертного ценообразования с точки зрения национального благосостояния)","authors":"L. Polezharova","doi":"10.17323/j.jcfr.2073-0438.14.1.2020.80-90","DOIUrl":"https://doi.org/10.17323/j.jcfr.2073-0438.14.1.2020.80-90","url":null,"abstract":"This article is devoted to development of mathematical models for resolving an actual scientific challenge in the field of corporate finance. This involves substantiating taxation policies for the counter-acting tax planning of multinational companies (MNC), and then devising and articulating the appropriate international taxation scheme, as evaluated from the position of national welfare policy. Based on an analysis of existing models of international taxation, and on the peculiarities of the actual mechanism of capital movement tax regulation, new models with equilibrium postulated have been developed. \u0000The primary mechanisms of this research involve the following considerations: (1) examination of an approach targeted at the determination of the final outcomes of international taxation from the perspective of national economies; (2) measures of tax planning on the part of MNCs, and corresponding counter-acting measures to the tax planning applied by governments, are taken as a complex. \u0000Our results indicate that because a government uses rules of controlled transactions, in order to counter-act MNCs’ tax planning, for the government the final outcome from an application of these rules may be negative. This is due to a possibility of MNCs’ development in convenient and offshore jurisdictions. This finding is illustrated by means of an approbation of models with a case study involving a three-tier structure.Further to this point, instead of additional revenues, a government is at a risk of a shrinking tax base and a reduction in budget revenues; and moreover from the perspective of national welfare, the additional loss of revenues and capital of MNCs. Therefore there is a significant importance in forming rules for MNC taxation policies which would focus not on taxes as such, but would focus on trying to keep capital within the territory and/or would facilitate the return of earlier divested income. This could be attempted, for example, by using the secondary adjustment rule in conjunction with a minimum tax on return. \u0000The novelty of this research resides in the specificity of our investigation and the applicability of our conclusions to the practical challenges of international taxation and national revenue policies. The peculiarities of this economic moment and the crucial challenges for national governments in dealing with MNCs and the digital economy underline the significance of this study. Our results expand and develop the existing literature in this ever-crucial area be of immediate use to policymakers, academics and administrators involved in national and international taxation, finance, economics, and analysis.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121512181","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 discusses the current situation with government revenue, expenditure, and deficits in the economies of Central Asia and considers the options available to use fiscal policy to support the technological development of these economies. It analyses contemporary issues in the public finances of these countries including the size of their governments, efficiency losses due to uneven taxation of different sectors and entities, ineffective foreign aid, and government expenditure inefficiency. The paper provides recommendations for the modification of fiscal policies to promote economic diversification and productivity growth in Central Asia.
{"title":"Public Finance and Technological Development in Central Asia","authors":"R. Mogilevskii","doi":"10.2139/ssrn.3806227","DOIUrl":"https://doi.org/10.2139/ssrn.3806227","url":null,"abstract":"This paper discusses the current situation with government revenue, expenditure, and deficits in the economies of Central Asia and considers the options available to use fiscal policy to support the technological development of these economies. It analyses contemporary issues in the public finances of these countries including the size of their governments, efficiency losses due to uneven taxation of different sectors and entities, ineffective foreign aid, and government expenditure inefficiency. The paper provides recommendations for the modification of fiscal policies to promote economic diversification and productivity growth in Central Asia.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126602661","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}
Purpose: To this thesis is analyzed the impact factor of education to the public sector and tax system, through a procedure of theoretical and mathematical analysis, a quantification method, an econometric method and behavioral scrutiny by a real case scenario. This work compares the cycle of money, to the one case using the impact factor of education and to the other case without it. Then, this work aims to study if the taxes for the education don’t belong to the general approach that taxes make weaker the cycle of money, but have a positive effect on the economy, are a different case as the theory of the cycle of money provides.
Design/methodology/approach: The analysis stands on the cycle of money and the impact factor of education. Therefore, the appropriate education to the economy supports the market and in general the economy. The impact factor of education enforces the economic dynamic of any economy. The study of cases when there is the factor of education and when this factor is omitted allows the extraction of the appropriate conclusions. Moreover, this analysis is used for the Q.E. method through R.B.Q. model. The use of simulations before the real application guarantees the significance of the results. To be able to understand the way that taxes for the education system, estimated to the one case how the economy interacts with these taxes and after this examination without these taxes, following the mathematical logic of the “reductio ad absurdum”.
Finding: The education of the U.S. for the period of 2012-2017 shows that taxes for education return to the economy, enhancing it. The general approach of simulation complies with this real case scenario.
Research limitations/implications: This paper shows that according to the theory of the cycle of money the education belongs to the case of factors that the taxes return to the economy, and robust the economic dynamic of a society.
Originality/value: The findings of this study contribute to the existing knowledge regarding the concept of the cycle of money to the case of education. The taxes on education belong to the case that the money returns to the economy, on the contrary with most taxes that are not robust the economy and should be reduced.
{"title":"The Impact Factor of Education on the Public Sector – The Case of the U.S.","authors":"Constantinos Challoumis Κωνσταντίνος Χαλλουμής","doi":"10.25103/ijbesar.131.07","DOIUrl":"https://doi.org/10.25103/ijbesar.131.07","url":null,"abstract":"Purpose: To this thesis is analyzed the impact factor of education to the public sector and tax system, through a procedure of theoretical and mathematical analysis, a quantification method, an econometric method and behavioral scrutiny by a real case scenario. This work compares the cycle of money, to the one case using the impact factor of education and to the other case without it. Then, this work aims to study if the taxes for the education don’t belong to the general approach that taxes make weaker the cycle of money, but have a positive effect on the economy, are a different case as the theory of the cycle of money provides.<br><br>Design/methodology/approach: The analysis stands on the cycle of money and the impact factor of education. Therefore, the appropriate education to the economy supports the market and in general the economy. The impact factor of education enforces the economic dynamic of any economy. The study of cases when there is the factor of education and when this factor is omitted allows the extraction of the appropriate conclusions. Moreover, this analysis is used for the Q.E. method through R.B.Q. model. The use of simulations before the real application guarantees the significance of the results. To be able to understand the way that taxes for the education system, estimated to the one case how the economy interacts with these taxes and after this examination without these taxes, following the mathematical logic of the “reductio ad absurdum”.<br><br>Finding: The education of the U.S. for the period of 2012-2017 shows that taxes for education return to the economy, enhancing it. The general approach of simulation complies with this real case scenario.<br><br>Research limitations/implications: This paper shows that according to the theory of the cycle of money the education belongs to the case of factors that the taxes return to the economy, and robust the economic dynamic of a society.<br><br>Originality/value: The findings of this study contribute to the existing knowledge regarding the concept of the cycle of money to the case of education. The taxes on education belong to the case that the money returns to the economy, on the contrary with most taxes that are not robust the economy and should be reduced.<br>","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122807775","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 this dissertation, I study the role of knowledge in policy preferences. In democracies, voters are often criticized for not being sufficiently informed when making their political decisions. Political scientists disagree about how consequential this ignorance is for the quality of democratic government. One camp emphasizes that people are capable of learning new information and that knowledge makes them change their views. Following this line of reasoning, I suggest using fundamental knowledge relevant to a specific policy domain rather than measuring knowledge that is directly related to the political world.
I focus on one policy domain – economic policies. I use the Global Financial Literacy test developed by Standard & Poor’s as a proxy for economic knowledge. I ask respondents to complete this test at the end of the three original surveys that I conducted in Argentina in 2017, 2018, and 2019. In total, 10,457 individuals participated in the surveys. I choose this country to study the effect of knowledge on policy preferences because of a drastic change in economic policies in 2015.
I find that those who score higher on the test are more likely to support pro-market economic policies, such as elimination of trade barriers, elimination of subsidies, and integration into the world financial markets. My identification strategy includes using a measure of knowledge that is uncorrelated with the most important driver for policy preferences – partisan attachments- and conducting analysis in two different contexts – economic boom and recession. The latter helps address possible confoundedness between financial knowledge and other factors, such as social status, that are important both for knowledge and policy preferences.
In addition to observational evidence, I provide randomly selected respondents in the 2018 and 2019 surveys with survey treatments – passages in which consequences of economic policies in Argentina and Venezuela are discussed. The results largely support the view that information helps shape policy positions. I receive stronger results in 2018 than in 2019. In 2018, I find that respondents who received the treatment are more likely to support the open economy and the debt repayment. In 2019, the coefficients for the treatment dummies do not reach a conventional level of significance, although their signs are consistent with the hypothesis.
Overall, my findings suggest that fundamental non-partisan knowledge matters when it comes to policy preferences.
{"title":"The Role of Knowledge for Policy Preferences: Evidence from Argentina","authors":"Alexandra Petrachkova","doi":"10.2139/ssrn.3625736","DOIUrl":"https://doi.org/10.2139/ssrn.3625736","url":null,"abstract":"In this dissertation, I study the role of knowledge in policy preferences. In democracies, voters are often criticized for not being sufficiently informed when making their political decisions. Political scientists disagree about how consequential this ignorance is for the quality of democratic government. One camp emphasizes that people are capable of learning new information and that knowledge makes them change their views. Following this line of reasoning, I suggest using fundamental knowledge relevant to a specific policy domain rather than measuring knowledge that is directly related to the political world.<br><br>I focus on one policy domain – economic policies. I use the Global Financial Literacy test developed by Standard & Poor’s as a proxy for economic knowledge. I ask respondents to complete this test at the end of the three original surveys that I conducted in Argentina in 2017, 2018, and 2019. In total, 10,457 individuals participated in the surveys. I choose this country to study the effect of knowledge on policy preferences because of a drastic change in economic policies in 2015. <br><br>I find that those who score higher on the test are more likely to support pro-market economic policies, such as elimination of trade barriers, elimination of subsidies, and integration into the world financial markets. My identification strategy includes using a measure of knowledge that is uncorrelated with the most important driver for policy preferences – partisan attachments- and conducting analysis in two different contexts – economic boom and recession. The latter helps address possible confoundedness between financial knowledge and other factors, such as social status, that are important both for knowledge and policy preferences. <br><br>In addition to observational evidence, I provide randomly selected respondents in the 2018 and 2019 surveys with survey treatments – passages in which consequences of economic policies in Argentina and Venezuela are discussed. The results largely support the view that information helps shape policy positions. I receive stronger results in 2018 than in 2019. In 2018, I find that respondents who received the treatment are more likely to support the open economy and the debt repayment. In 2019, the coefficients for the treatment dummies do not reach a conventional level of significance, although their signs are consistent with the hypothesis. <br><br>Overall, my findings suggest that fundamental non-partisan knowledge matters when it comes to policy preferences.<br>","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129537567","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 paper takes an incisive shot at the systemic inadequacies that have tiptoed into the economic order of the state over time via the apparently innocuous mechanism of withholding taxes. Withholding tax – a legitimate instrument of preponing the state revenues on clearly identifiable chunks of incomes – has historically been resorted to by most states, and to that extent it should be normal with Pakistan, too. However, what has happened in Pakistan is that the tool of withholding taxation has been used as a source of revenues way too large in scale, size, scope and intensity. In addition to the pulling forward of tax collection on clearly demarcated chunks of incomes, a large number of transactions have also been roped into its nexus and then charged to tax by presumptivizing gross receipts as income – a withholdingization of the sorts not only of the tax system but of the entire economic system as a weighty portion of ubiquitous withholding taxes gets stuck into the pricing structure of the final goods and services produced in the economy rendering them price-incompetitive in the international market. This overwhelming withholdingization of the economic system, it is argued, has been brought about by a numb state continually operating under, using a Freudian framework, the “pleasure principle” instead of the “reality principle” with political governments complacently choosing to continue harvesting quick bucks into the exchequer, pushing the extractive system into a total disarray, the society into burgeoning civil strife, and the economy to the Dutch Disease effect.
{"title":"Pakistan: Withholdingization of the Economic System - A Source of Revenue, Civil Strife, or Dutch Disease+?","authors":"M. A. Ahmed","doi":"10.2139/ssrn.3621413","DOIUrl":"https://doi.org/10.2139/ssrn.3621413","url":null,"abstract":"The paper takes an incisive shot at the systemic inadequacies that have tiptoed into the economic order of the state over time via the apparently innocuous mechanism of withholding taxes. Withholding tax – a legitimate instrument of preponing the state revenues on clearly identifiable chunks of incomes – has historically been resorted to by most states, and to that extent it should be normal with Pakistan, too. However, what has happened in Pakistan is that the tool of withholding taxation has been used as a source of revenues way too large in scale, size, scope and intensity. In addition to the pulling forward of tax collection on clearly demarcated chunks of incomes, a large number of transactions have also been roped into its nexus and then charged to tax by presumptivizing gross receipts as income – a withholdingization of the sorts not only of the tax system but of the entire economic system as a weighty portion of ubiquitous withholding taxes gets stuck into the pricing structure of the final goods and services produced in the economy rendering them price-incompetitive in the international market. This overwhelming withholdingization of the economic system, it is argued, has been brought about by a numb state continually operating under, using a Freudian framework, the “pleasure principle” instead of the “reality principle” with political governments complacently choosing to continue harvesting quick bucks into the exchequer, pushing the extractive system into a total disarray, the society into burgeoning civil strife, and the economy to the Dutch Disease effect.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114091658","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}
S. Roll, M. Grinstein‐Weiss, O. Kondratjeva, Sam Bufe
Many U.S. households — especially those with low- to moderate-incomes (LMI) — struggle to save for retirement. To address this issue, the Department of the Treasury launched myRA, a no-fee retirement account designed primarily to help people who lacked access to employer-sponsored plans build retirement savings. In this paper, we report findings from two myRA-focused field experiments, both of which were administered to well over 100,000 LMI online tax filers before and during the 2016 tax season. The first experiment involved sending one of three different myRA-focused email messages to tax filers immediately prior to tax season, and the second experiment involved incorporating myRA-focused messages and choice architecture directly into an online tax filing platform. Messages were chosen to address different barriers to retirement savings LMI households may face. We find that, though the general level of interest in myRA was very low in this population, interest and enrollment in myRA depends heavily on the way in which the benefits of the accounts are framed. Results from both experiments indicate that messages emphasizing the possibility of receiving a larger refund in the future were the most effective at increasing interest in myRA, while messages focused around the simplicity and ease of use of the accounts were less effective. We also conduct several sub-sample analyses to investigate the extent to which these effects differed by key household characteristics.
{"title":"Promoting Public Retirement Savings Accounts during Tax Filing: Evidence from a Field Experiment","authors":"S. Roll, M. Grinstein‐Weiss, O. Kondratjeva, Sam Bufe","doi":"10.2139/ssrn.3619113","DOIUrl":"https://doi.org/10.2139/ssrn.3619113","url":null,"abstract":"Many U.S. households — especially those with low- to moderate-incomes (LMI) — struggle to save for retirement. To address this issue, the Department of the Treasury launched myRA, a no-fee retirement account designed primarily to help people who lacked access to employer-sponsored plans build retirement savings. In this paper, we report findings from two myRA-focused field experiments, both of which were administered to well over 100,000 LMI online tax filers before and during the 2016 tax season. The first experiment involved sending one of three different myRA-focused email messages to tax filers immediately prior to tax season, and the second experiment involved incorporating myRA-focused messages and choice architecture directly into an online tax filing platform. Messages were chosen to address different barriers to retirement savings LMI households may face. We find that, though the general level of interest in myRA was very low in this population, interest and enrollment in myRA depends heavily on the way in which the benefits of the accounts are framed. Results from both experiments indicate that messages emphasizing the possibility of receiving a larger refund in the future were the most effective at increasing interest in myRA, while messages focused around the simplicity and ease of use of the accounts were less effective. We also conduct several sub-sample analyses to investigate the extent to which these effects differed by key household characteristics.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128559500","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}
Part I of this paper explains how wealth managers have modified the trust to create the possibility for stateless dynastic wealth. By this I mean wealth that is held by a family through a trust that is established in a haven state to eliminate the power of other states to regulate and oversee transmission and management of wealth and to make it very difficult for courts in another state to levy against wealth on behalf of private creditors. These structures also permit legal tax avoidance if income and wealth is not attributed to family members. And they facilitate tax evasion by not reporting foreign income and wealth. I use the relatively novel structure of a perpetual purpose trust to illustrate. Part II is a case study of China. It draws on multiple sources of information to estimate the potential demand for wealth preservation services in China and the current extent of the use of such services. I selected China as a case study in part because it was in the remit of the conference for which this paper was written, which was sponsored by the Chinese Journal of Comparative Law. This was a happy coincidence. Several factors make China an interesting case study. Private wealth has grown exponentially in China in the last fifty years, creating large potential demand for wealth preservation services. But China has been slow in developing internal legal structures like family trusts that would enable wealth holders in China to preserve wealth using Chinese law and Chinese entities. This creates an incentive to move wealth outside of China in addition to the usual incentives canvassed in Part I. Political risk adds to the incentive to move wealth outside of China. But it seems that relatively little wealth has moved outside of China compared to other wealthy states. Some of this lack of uptake of wealth management services may be attributed to unfamiliarity with such services. I speculate that a significant part can be attributed to restrictions imposed by China on the movement of capital. These restrictions increase the cost of moving capital out of China. This would imply is that there is not strong intrinsic demand for the more exotic services wealth managers can provide, such as the structure described in Part I. This is consistent with the experience in the U.S. where a change in tax law in 1986 is thought to explain an increase in demand for perpetual trusts. If this speculation is correct, then China would expect there to be a significant increase in capital export if it liberalized capital accounts and increased taxes on wealth. And, if the U.S. adopted significant wealth taxes such as have been proposed by some progressive Democrats, then we should expect wealthy individuals to respond by increasing use of structures such as the structure described in Part I.
本文第一部分解释了财富管理者如何修改信托以创造无国籍王朝财富的可能性。我指的是由一个家族通过在一个避风港州建立的信托基金持有的财富，以消除其他州监管和监督财富转移和管理的权力，并使另一个州的法院很难代表私人债权人征收财富。如果收入和财富不归属于家庭成员，这些结构也允许合法避税。他们还通过不报告海外收入和财富，为逃税提供便利。我用一个相对新颖的永久目的信托结构来说明。第二部分是中国的案例研究。它利用多种信息来源来估计中国对财富保值服务的潜在需求以及目前这种服务的使用程度。我之所以选择中国作为案例研究，部分原因是这篇论文是由《中国比较法杂志》(Chinese Journal of Comparative Law)主办的。这是一个令人愉快的巧合。有几个因素使中国成为一个有趣的研究案例。在过去的50年里，中国的私人财富呈指数级增长，对财富保值服务产生了巨大的潜在需求。但中国在发展家族信托等国内法律结构方面进展缓慢，这些法律结构将使中国的财富持有者能够利用中国法律和中国实体来保护财富。这就产生了一种将财富转移到中国境外的动机，除了第一部分中讨论的通常的动机之外。政治风险增加了将财富转移到中国境外的动机。但与其他富裕国家相比，中国转移到海外的财富似乎相对较少。缺乏财富管理服务的部分原因可能是对此类服务不熟悉。我推测，很大一部分原因可以归因于中国对资本流动的限制。这些限制增加了资本流出中国的成本。这意味着，对于财富管理公司可以提供的更奇特的服务，如第一部分中描述的结构，并没有强烈的内在需求。这与美国的经验是一致的，1986年税法的变化被认为是永久信托需求增加的原因。如果这种猜测是正确的，那么，如果中国放开资本账户并提高财富税，那么中国预计资本输出将大幅增加。而且，如果美国采纳了一些进步的民主党人提出的重要的财富税，那么我们应该期待富有的个人通过增加使用第一部分中描述的结构来回应。
{"title":"The Possibility for Stateless Dynastic Wealth and the Case of China","authors":"Mark P. Gergen","doi":"10.2139/ssrn.3619227","DOIUrl":"https://doi.org/10.2139/ssrn.3619227","url":null,"abstract":"Part I of this paper explains how wealth managers have modified the trust to create the possibility for stateless dynastic wealth. By this I mean wealth that is held by a family through a trust that is established in a haven state to eliminate the power of other states to regulate and oversee transmission and management of wealth and to make it very difficult for courts in another state to levy against wealth on behalf of private creditors. These structures also permit legal tax avoidance if income and wealth is not attributed to family members. And they facilitate tax evasion by not reporting foreign income and wealth. I use the relatively novel structure of a perpetual purpose trust to illustrate. \u0000 \u0000Part II is a case study of China. It draws on multiple sources of information to estimate the potential demand for wealth preservation services in China and the current extent of the use of such services. I selected China as a case study in part because it was in the remit of the conference for which this paper was written, which was sponsored by the Chinese Journal of Comparative Law. This was a happy coincidence. Several factors make China an interesting case study. Private wealth has grown exponentially in China in the last fifty years, creating large potential demand for wealth preservation services. But China has been slow in developing internal legal structures like family trusts that would enable wealth holders in China to preserve wealth using Chinese law and Chinese entities. This creates an incentive to move wealth outside of China in addition to the usual incentives canvassed in Part I. Political risk adds to the incentive to move wealth outside of China. But it seems that relatively little wealth has moved outside of China compared to other wealthy states. \u0000 \u0000Some of this lack of uptake of wealth management services may be attributed to unfamiliarity with such services. I speculate that a significant part can be attributed to restrictions imposed by China on the movement of capital. These restrictions increase the cost of moving capital out of China. This would imply is that there is not strong intrinsic demand for the more exotic services wealth managers can provide, such as the structure described in Part I. This is consistent with the experience in the U.S. where a change in tax law in 1986 is thought to explain an increase in demand for perpetual trusts. If this speculation is correct, then China would expect there to be a significant increase in capital export if it liberalized capital accounts and increased taxes on wealth. And, if the U.S. adopted significant wealth taxes such as have been proposed by some progressive Democrats, then we should expect wealthy individuals to respond by increasing use of structures such as the structure described in Part I.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121050864","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}
Saroj Bhattarai, Jae Won Lee, Woong Yong Park, Choongryul Yang
We study aggregate, distributional, and welfare effects of a permanent reduction in the capital tax rate in a quantitative model with capital-skill complementarity and household heterogeneity. Such a tax reform leads to expansionary long-run aggregate output and investment effects, but those are coupled with increases in wage, consumption, and income inequality. The tax reform is not self-financing and its effects depend crucially on whether the government cuts lump-sum transfers or raises distortionary labor or consumption tax rates for financing. The former results in a larger aggregate expansion, but at the expense of a greater rise in inequality. As a result, the latter is relatively more beneficial for unskilled households. We find that the tax reform, when the consumption tax rate adjusts, leads to a Pareto improvement in terms of life-time welfare. For transition dynamics, monetary policy, in addition to the fiscal adjustments, matters. In particular, if monetary policy inflates away a portion of the public debt, the economy can avoid the short-run contraction that would arise otherwise.
{"title":"Macroeconomic Effects of Capital Tax Rate Changes","authors":"Saroj Bhattarai, Jae Won Lee, Woong Yong Park, Choongryul Yang","doi":"10.24149/GWP391","DOIUrl":"https://doi.org/10.24149/GWP391","url":null,"abstract":"We study aggregate, distributional, and welfare effects of a permanent reduction in the capital tax rate in a quantitative model with capital-skill complementarity and household heterogeneity. Such a tax reform leads to expansionary long-run aggregate output and investment effects, but those are coupled with increases in wage, consumption, and income inequality. The tax reform is not self-financing and its effects depend crucially on whether the government cuts lump-sum transfers or raises distortionary labor or consumption tax rates for financing. The former results in a larger aggregate expansion, but at the expense of a greater rise in inequality. As a result, the latter is relatively more beneficial for unskilled households. We find that the tax reform, when the consumption tax rate adjusts, leads to a Pareto improvement in terms of life-time welfare. For transition dynamics, monetary policy, in addition to the fiscal adjustments, matters. In particular, if monetary policy inflates away a portion of the public debt, the economy can avoid the short-run contraction that would arise otherwise.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"123 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127064830","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 provide novel evidence of discrete labor supply responses to tax incentives and study the broader implications of discrete rather than continuous labor supply. We utilize an income notch and a reform that shifted the location of the notch in order to study the labor supply mechanisms. We find transparent evidence of discrete labor supply responses, revealing that wage earners even in the part-time labor market can face significant restrictions in their available labor supply choices. As an implication of discrete labor supply, we show that the conventional differencesin-differences and bunching elasticity estimates can be downward-biased when labor supply is discrete.
{"title":"Discrete Labor Supply: Empirical Evidence and Implications","authors":"Tuomas Kosonen, Tuomas Matikka","doi":"10.2139/ssrn.3609866","DOIUrl":"https://doi.org/10.2139/ssrn.3609866","url":null,"abstract":"We provide novel evidence of discrete labor supply responses to tax incentives and study the broader implications of discrete rather than continuous labor supply. We utilize an income notch and a reform that shifted the location of the notch in order to study the labor supply mechanisms. We find transparent evidence of discrete labor supply responses, revealing that wage earners even in the part-time labor market can face significant restrictions in their available labor supply choices. As an implication of discrete labor supply, we show that the conventional differencesin-differences and bunching elasticity estimates can be downward-biased when labor supply is discrete.","PeriodicalId":431495,"journal":{"name":"Public Economics: Taxation","volume":"150 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122443847","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}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：