International Tax and Public Finance最新文献

This paper studies the conditions under which rewarding compliant taxpayers is an optimal mechanism to improve tax collection. The theoretical model suggests that when auditing contributors and evading are both costly, rewarding tax compliance is an effective strategy to increase the government’s profit. I provide empirical evidence from the Argentinian provinces’ rewards and tax policy variation. Where the data suggest that theoretical conditions hold, there is a positive effect in the real estate per-capita tax collection ranging from 0.4 to more than 2 standard deviations. This result has important policy implications, mapping the private evasion cost and the price of traditional policy tools as the main determinants of positive incentives’ effectiveness.

Multinational enterprises (MNEs) have incentive to reduce tax payment through transfer pricing. The incentive is stronger when MNEs own intangibles, because it is easy to transfer them across countries. To mitigate such strategic tax planning, the OECD proposes the arm's length principle (ALP). This paper deals with technology patents as an example of intangibles and investigates how the ALP affects MNEs' licensing strategies and welfare in a model with a tax haven. The ALP may distort MNEs' licensing decisions, because providing a license to unrelated firms restricts MNEs' profit-shifting opportunities due to the emergence of comparable transaction. Interestingly, the termination of licensing in the presence of the ALP may worsen domestic welfare if the (potential) licensee and the MNE's subsidiary do not compete in the domestic market but may improve welfare if they compete. The results under ad valorem royalty are in distinct contrast with those under per-unit royalty.

Consumption is an important source of greenhouse gas emissions. This study extends the footloose capital model to investigate consumption-generated emissions and consumption taxes in the presence of endogenous firm locations and different market sizes. We find that consumption taxes cause firm relocation and carbon leakage. That is, tax increase in one country induces firms to relocate to the other country; meanwhile, emissions decrease in that country but increase in the other country. We also show that when countries decide on their consumption taxes cooperatively to maximize the joint welfare, the optimal taxes are identical across them, regardless of different market sizes. However, under consumption tax competition, the larger country imposes a higher tax than the smaller country.

This paper studies how linear tax and education policy should optimally respond to skill-biased technical change (SBTC). SBTC affects optimal taxes and subsidies by changing (1) direct distributional benefits of each policy instrument, (2) indirect, general-equilibrium effects on wages, and (3) education distortions. Analytically, the effect of SBTC on these three components is shown to be ambiguous. In simulations for the US economy, SBTC makes the optimal tax system more progressive and lowers optimal education subsidies. This is because for both income taxes and education subsidies; their direct distributional effects become more important, which more than offsets the larger general-equilibrium effects and increased education distortions.

Many countries have a two-tiered unemployment compensation system that provides earnings-related unemployment insurance for a limited period of time and less generous unemployment assistance thereafter. This study evaluates the effects of a reform in Finland that increased the level of unemployment assistance by 22%. The reform led to a drop of 9% in the unemployment exit hazard, which can be attributed to fewer exits to both employment and inactivity. The implied elasticities suggest that a 10% increase in unemployment assistance reduces the unemployment exit hazard by 4% and the job-finding hazard by 6%. These effects are relatively small compared to the existing evidence on the effects of unemployment insurance benefits.