International Tax and Public Finance最新文献

This study presents detailed estimates of the shadow economy's size and development in all European Union (EU) countries with particular emphasis on six specific countries (Germany, Austria, Denmark, Greece, Italy, and Romania) from 2003 to 2022. It focuses on understanding the key factors that motivate economic agents to engage in shadow economy activities within EU and particularly these countries. The estimates presented show a significant reduction in the shadow economy's size from 22.6% of GDP in 2003 to 17.3% in 2022, highlighting the effectiveness of various policy measures implemented in most EU countries with particular focus on these six countries. Despite a slight increase in the shadow economy across most EU nations due to the Coronavirus pandemic after 2020, our research identifies the main determinants of economic informality in most EU countries. Our analysis expose that weak institutional quality, ineffective government institutions, complex and burdensome tax and regulatory systems, the lack of strong legal systems, and pervasive corruption are the main determinants of economic informality in most countries of the EU. The study thoroughly reviews the driving forces behind the shadow economy and discusses the specific policy measures these six countries part of this policy analysis paper have adopted to mitigate and reduce its presence.

We assess the impact of a Swedish regulatory change, which required businesses with any business-to-consumer transactions, whether by cash or card, to use a certified electronic cash register (ECR), on reported revenue. To do this, we use administrative data on the monthly reported revenue of all affected firms and a staggered difference-in-differences approach. Our findings indicate that there was an immediate increase of about 2.7–4.3% in reported revenue following the implementation of a certified ECR. However, the effect was temporary and diminished to zero after just a few months, which indicates that firms found innovative methods to underreport their revenue.

This article proposes a hybrid national accounts (NA)-macroeconometric approach to fill the gap between the demand for reliable and internationally comparable estimates and the sparse availability of official statistics based on the NA approach. The proposed method combines data from Eurostat’s Tabular approach for the exhaustiveness of NA with estimates based on theoretical hypotheses on the drivers of non-observed production. We estimate underground, informal, and illegal economies for 22 European countries over the period 2000–2020.

In this paper, I analyze the local labor market consequences of multinational firms reallocating employees across their affiliates in response to antitax avoidance policies. I leverage the introduction of a worldwide debt cap in 2010 in the United Kingdom as a quasi-natural experiment that limited one of the forms of profit shifting—debt shifting—for a group of multinational corporations (MNCs). Multinationals affected by the reform reallocated their employees from the United Kingdom to foreign locations. I show that this led to a reduction in employment in regions more exposed to the reform in the United Kingdom. In foreign countries, the initial reallocation of labor across firms resulted in a relatively larger expansion of the affected local labor markets. These results suggest that a reallocation of labor across firms generates asymmetries in how negative and positive firm-level shocks are amplified through regional markets.

About half of government expenditure in the United States takes the form of government consumption (e.g., education, defense, infrastructure). In many studies of post-tax inequality based on the Dina framework (including the influential study by Piketty et al. (Q J Econ 133(2):553–609, 2018), government consumption is allocated either proportionally to post-tax disposable income or on a per-capita basis, and the level of inequality is fairly sensitive to this choice. This paper provides direct evidence on how public education spending (a substantial part of government consumption) is actually distributed. An allocation proportional to post-tax disposable income is clearly rejected, while a lump-sum allocation is found to provide a good approximation.

We expand the theory of politician quality in electoral democracies with citizen candidates by supposing that performance while in office sends a signal to the voters about the politician’s valence. Individuals live two periods and decide to become candidates when young, trading off against type-specific private wages. The valence signal increases the reelection chances of high valence incumbents (screening mechanism of reelection), and thus their expected gain from running for office (self-selection mechanism). Since self-selection improves the average quality of challengers, voters become more demanding when evaluating the incumbent’s performance. This complementarity between the self-selection and the screening mechanisms may lead to multiple equilibria. We show that more difficult and/or less variable political jobs increase the politicians’ quality. Conversely, societies with more wage inequality have lower quality polities. We also show that incumbency advantage blurs the screening mechanism by giving incumbents an upper-hand in electoral competition and may wipe out the positive effect of the screening mechanism on the quality of the polity.

This study explores empirically how business owners respond to dividend taxes in a range of different margins including tax planning and investment. Using administrative tax data on all privately held Finnish corporations, I find exceptionally clear dividend payment responses to tax rate discontinuities and changes. Studying the income composition of owners around tax changes reveals clear income shifting between wage and dividends with negligible effect on gross income received from the firm. Evidence on the asset composition of firms indicates that a notable part of the payment response is due to inter-temporal income-smoothing, while I observe no statistically significant real responses in output or investment. Heterogeneity analysis suggests that more experienced owners and owners with lower income have higher tax base elasticities.

We use regional data for Greece between 1975–1989 to demonstrate a disproportionate allocation of public investment funds to prefectures that exhibited stronger support for the incumbent party. Our main empirical evidence comes from an Instrumental Variables (IV) analysis that exploits the discontinuity in Greece's political landscape after a brief military junta (1967–1974) to link the parties established after 1974 with their ancestors from the same 'political family' during the pre-dictatorial era. In particular, we show that the electoral strength of political ancestors influences the allocation of public investment. Moreover, there is a strong association between the political support of ancestor and descendant parties, both of which influence the allocation of public investment in prefectures with many core supporters. We also present evidence indicating that the appointment of deputy ministers from loyal prefectures of the incumbent party plays a significant mediating role in the allocation of public investment to prefectures with a strong base of core supporters.

Various low-tax jurisdictions including Mauritius, have been often accused of usurping the just share of taxes of other countries. Given the adverse impact on the reputation of the ‘tax havens’, the country has implemented in 2019 the economic substance requirements to ensure a minimum substance for resident companies to be taxed in Mauritius. The aim of this research is to assess the efficiency and robustness of the economic substance rules of Mauritius in combatting harmful tax practices including base erosion and profit shifting. A doctrinal approach and a comparative analysis with the corresponding substance rules of Cayman Islands were adopted to achieve the research objective. The findings demonstrate that there is still room for improving the economic substance rules of Mauritius in terms of an enhanced interpretation of the rules, reporting requirements and imposition of the relevant sanctions.

This paper provides an overview of the relationship between tax policy and gender equality, covering labor, capital and wealth, as well as consumption taxes. It considers implicit and explicit gender biases and corrective taxation. On labor taxes, we discuss the well-established findings on female labor supply and present new empirical work on the impact of household taxation. We also analyze the impact of progressivity on pay gaps and labor supply. On capital and wealth taxation, we discuss the implications of lower effective capital income taxation on the personal income tax burden gap across genders. We show that countries with relatively low female shares of capital income and wealth also tend to tax property and inheritances particularly lightly. On consumption taxes, we cover taxes on feminine hygiene products and excise taxes, which we assess in relation to externalities and differences in consumption patterns across genders.