Cross-border pollution,public pollution abatement and capital tax competition

We analyze the case where governments have to use income tax revenue to finance public pollution abatement and relate the results to the existing literature on capital tax competition. We show that the impact of public pollution abatement on Nash taxes on mobile factor income is non-trivial and the standard results from the tax competition literature can be reversed. When the two countries are identical, the Nash equilibrium capital income taxes converge to the tax on immobile factors income as the degree of cross-border pollution converges to one. When countries are asymmetric and pollution is local the presence of public pollution abatement lowers the capital tax for the capital exporting country, while the impact on the capital tax of the capital importing country is ambiguous.     

Fiscal incentives and local tax competition: Evidence from China

This paper explores how fiscal incentives affect capital tax decisions by local governments in the Chinese context. We develop a model in which local governments, facing different fiscal incentives, compete for mobile capital over corporate taxes. The key prediction of the model, borne out in data from Chinese cities over the years 2004–13, is that an increase in the local corporate income tax-sharing ratio, proxying local fiscal incentives, makes city governments’ horizontal tax reactions stronger. Our results contribute to the fiscal federalism literature by providing evidence in support of the argument that fiscal incentives faced by local governments significantly shape their policy choices. Additionally, we provide explicit evidence on local tax competition within provinces in China, which has long been regarded as one of the driving forces of China's rapid economic growth.     

Developing countries in competition for foreign investment

This study analyzes the competition for foreign direct investment (FDI) among countries at different stages of development. It is assumed that domestic companies in a more-developed country use more capital in production and that wages in a less-developed country are lower. Countries can compete for FDI by increasing the supply of public inputs in the economy, in addition to (or instead of) offering subsidies or tax reliefs to foreign investors. The results reveal that if governments of competing countries are not allowed to discriminate between domestic and foreign firms, there may be situations in which a less-developed economy will attract FDI depending on the labor cost differential and the responsiveness of foreign investor's and domestic companies' output to changes in the supply of public inputs. If tax discrimination between domestic and foreign firms is permitted, both countries will optimally raise the supply of public inputs, but the more-developed country will always win the foreign investment despite higher labor costs. Thus, governments of less-developed countries may have an incentive to work on an international agreement to disallow tax discrimination.     

Why do most countries set high tax rates on capital?

We consider tax competition in a world with tax bases exhibiting different degrees of mobility, modeled as mobile and immobile capital. An agreement among countries not to give preferential treatment to mobile capital results in an equilibrium where mobile capital is nevertheless taxed relatively lightly. In particular, one or two of the smallest countries, measured by their stocks of immobile capital, choose relatively low tax rates, thereby attracting mobile capital away from the other countries, which are then left to set revenue-maximizing taxes on their immobile capital. This conclusion holds regardless of whether countries choose their tax policies sequentially or simultaneously. In contrast, unrestricted competition for mobile capital results in the preferential treatment of mobile capital by all countries, without cross-country differences in the taxation of mobile capital. Nevertheless our main result is that the non-preferential regime generates larger expected global tax revenue, despite the sizable revenue loss from the emergence of low-tax countries. By extending the analysis to include cross-country differences in productivities, we are able to resurrect a case for preferential regimes, but only if the productivity differences are sufficiently large.     

转轨制国家国内横向资本税竞争的模型分析

本文分析了转轨制国家国内地方政府间的资本税竞争,认为一定条件下的地方政府间资本税竞争可以在一定程度上提高全国居民的福利水平;不过,经济转轨初期的各地方政府似乎更愿意采取协同一致的税收政策,因为实行这样的税收政策对地方政府的自身利益较为有利。     

The welfare and employment effects of trade and factor taxes with variable factor supply

This paper develops a general trade model with many traded goods, many internationally mobile factors, and with endogenous labor supply. Within this framework, the employment and welfare effects of taxes on trade, on wages and on the returns of the internationally mobile factors are examined. The employment maximizing and the first- and second-best tax structures are determined. The analysis identifies the conditions under which variable labor supply increases the welfare cost of a trade and a capital tax, and demonstrates the need for joint determination of taxes on trade and on the returns of factors in variable domestic supply.     

Optimal tax and tariff policies with tax credits

This paper examines the optimal tax and tariff policies for a small open economy when mobile capital receives a tax credit for taxes paid to the host country. For a capital-importing country, a tax on capital equal to the source country tax rate (to capture tax revenue) combined with a subsidy to encourage capital imports is the optimal policy. Results are also derived for cases in which only one of the instruments can be varied. For a capital-exporting country that cannot reduce its capital tax rate, a subsidy to the sector using exported capital is desirable.     

Tax Competition and Tax Revenues

It is often feared that tax competition might lead to a “race to the bottom” and that the consequence of a reduction in tax rates on capital income would be shrinking capital income tax revenues and difficulties for national governments to perform their usual tasks. The following paper analyses what happened to tax revenues in a number of OECD countries. It turns out that taxes on capital income contribute to the financing of public expenditure to a more or less unchanged extent; nor are there significant changes in the level and structure of total tax revenues.      

现代城市营销策略探析:以福建泉州为例

城市营销是形成城市竞争优势的重要途径,针对泉州内外环境所形成的优势、劣势、机遇、威胁,目前泉州市存在民营企业外迁,总部外迁、资金外流、税收外流,县域品牌和企业品牌高于城市品牌等问题。为此,应选择科学合理的城市营销策略,凸现城市特色,彰显城市竞争优势,为经济社会发展注入活力,达到全面提高泉州市竞争力的发展目的。     

Tax competition when firms choose their organizational form: Should tax loopholes for multinationals be closed?

We analyze a sequential game between two symmetric countries when firms can invest in a multinational structure that confers tax savings. Governments are able to commit to long-run tax discrimination policies before firms' decisions are made and before statutory capital tax rates are chosen non-cooperatively. Whether a coordinated reduction in the tax preferences granted to mobile firms is beneficial or harmful for the competing countries depends critically on the elasticity with which the firms' organizational structure responds to tax discrimination incentives. A model extension with countries of different size shows that small countries are likely to grant more tax preferences than larger ones, along with having lower effective tax rates.     

Estimating the Benefits of Individual Retirement Accounts: A Comparison to Capital Gains Investments

This paper compares the benefits of investing funds in an IRA account to the benefits of investing funds in a long-term capital gains investment. The comparison is motivated because IRA funds, although they can be placed in a long-term capital gains account, are ultimately taxed at ordinary income tax rates. IRA funds cannot receive the favorable long-term capital gains tax treatment. Following previous work by Collins, gain factors are computed for IRA accounts vs. long-term capital gains accounts. In most cases the gain factors are larger than one, although much smaller than when the alternative investment is a typical savings account. Gains factors are, however, universally less than one for premature withdrawal of the IRA.     

How did the notional interest deduction affect Belgian SMEs’ capital structure?

The recently introduced risk capital allowance in Belgium, which allows a notional interest deduction (to be denoted NID hereafter) on a firm’s adjusted equity for tax purposes, has mitigated the tax discrepancy between equity and debt financing. To our knowledge, we provide the first empirical study of the extent to which this regulation has resulted in a strengthening of small and medium sized enterprises’ (to be denoted SMEs hereafter) solvency, which was one of its most prominent objectives. Results from logit regressions reveal that the probability of adopting the NID is higher for lowly leveraged SMEs, SMEs without experience with the tax-exempt investment reserve and SMEs with a sound knowledge of the notional interest deduction regulation. Results on the impact of the NID on the capital structure of SMEs based on panel and first differences regressions reveal that this measure did not result in a significant change of SMEs’ leverage. In view of the discussion regarding the optimal tax and legislative framework that governments should put in place (Poutziouris et al., J Small Bus Enterp Dev 6(1):7–25, 1999), these results cast doubt on the risk capital allowance, as it stands now, being the right government instrument to contribute—at least in the short term—to creating a pro-enterprising tax and legislative climate for SMEs. We conclude by providing some general suggestions for improving the effectiveness of the risk capital allowance.     

资本资产定价模型的扩展及其在保险中的应用

传统的资本资产定价模型是在一系列过于严格化、理想化的条件下建立起来的。针对现实资本市场情况,通过对资本资产定价模型的应用条件的部分修改,如增加保险公司存在违约风险、交易费用和税收的条件,并且讨论交易费用分别为固定值和保费的函数时的情形以及税收分为固定值和变量的情形,对保费定价问题进行模型扩展。理论推导结果显示,在存在违约风险情况下,保险公司所收保费应该更低;承保费用越少,所需保费就越少;存在税负条件下的公平保费与税收水平有关。     

谈我国中央与地方政府间税权配置的进一步改进

本文从介绍政府间税权配置的基本原则及中央与地方政府间税权配置的基本模式出发,认为目前我国中央与地方政府间在税权配置上仍存在着许多问题。为了更好地实现政府间“事权与财权”的相对统一,有必要对我国中央与地方政府间的税权配置做进一步的改进。     

Strategic aspects of public finance in a world with high capital mobility

In a world with high capital mobility an increase in equity taxes is likely to induce a capital out-flow. It is commonly believed that, in consequence, there may be an under-provision of public goods when governments have only equity taxes at their disposal. This paper compares the provision of public goods under cooperative and non-cooperative tax policies. Suprisingly, the non-cooperative regime may result in either an over- or an under-provision of public goods. It is also shown that the gains from coordination increase as countries become atomistic.     

房产税对房价的影响:来自OECD国家的证据

本文使用1980-2009年23个OECD国家的住房市场数据,考察了住房房产税对房价的影响。研究发现:第一,房产税对房价具有显著负向作用,但过去30年23个OECD国家房产税率的均值为2.61%。这表明,尽管房产税能有效降低房价,但地方政府不大可能通过大幅提高房产税率来实现。因此,房产税对房价的抑制作用具有局限性。第二,预期比房产税对房价影响更大。因此,改变房价增长预期、抑制投机的政策比房产税更有效。第三,长期利率的回归系数不仅小于房产税,而且符号为正。因此,房产税政策比利率政策更有效。第四,房价主要是由收入和人口决定的,房价仍未脱离基本经济面。因此,收入和人口的变动可以预测房价的长期变动。最后,住房建造成本回归系数不显著。因此,房价并非主要由成本决定,降低住房建造成本并不能降低房价。     

关于财政分权利弊的理论分析

本文从理论上系统分析和总结了财政分权或分权化的公共管理体制改革所存在的利弊。财政分权的有利之处主要体现在对多样化地区偏好的敏感度,通过家庭流动性揭示真实偏好,保护后代人的利益,限制政府权力滥用,提高居民对公共事务的参与度,促进公共服务创新等方面;其弊端主要包括资源在地区间的无效配置,破坏性的税收竞争,税收出口与溢出效应,次优的收入分配与稳定政策等。在此基础上,简要讨论了我国财政分权体制下的财政监督问题。     

Locational Competition: A Neglected Paradigm in the International Division of Labour

Krugman's verdict that competitiveness of countries is a largely meaningless concept is a serious misjudgement of the economics profession. Countries compete for the mobile factors of production, most importantly for capital and technology. The exit‐option of these factors and of firms changes the calculus of national governments. This paper sets out the main elements of the concept of competition between locations – locational competition – and analyses its impact on welfare and employment of the capital‐exporting country. It also looks at whether competition between countries necessarily results in a race to the bottom or whether it can function as a controlling mechanism for governments and as a discovery device. The paper discusses under which conditions common rules are needed to reduce transaction costs and to prevent strategic, opportunistic behaviour of countries and which common rules thus reduce transaction costs. Finally, it deals with the question whether one institutional equilibrium in the world economy can be expected or whether many national equilibriums can coexist.     

Financial repression and external openness in an endogenous growth model

An endogenous growth model has been developed that extends Sidrauski (1967), Roubini and Sala-i-Martin (1992,1995) and Lucas (1988) by combining financial development, human capital investment, and external openness. Financial development and trade liberalization are shown to increase the economic growth rate by increasing the marginal benefits of human capital investment. Expansionary governments are, however, provided with an incentive to increase the money supply growth rate, to repress the financial sector, to close its economy, and to impose a high proportional income tax rate.     

The welfare effects of illegal immigration

"This paper extends the work of Ethier on illegal immigration by examining the optimal level of enforcement for the labor-importing country in a two-country model and by considering the effects of allowing capital mobility. We derive a formula for the optimal level of enforcement against firms that hire illegal workers, and show that the presence of enforcement costs makes the policy less efficient than a wage tax. With capital mobility, foreign workers gain from an increase in enforcement in the home country because capital is driven out of the home country."