Impact of the GST and Wine Tax Reform on Australia’s Wine Industry: A CGE Analysis

This study analyses the impacts of the Goods and Services Tax (GST) introduced on 1 July 2000, and the associated wine tax reform, on both the premium and non‐premium segments of the grape and wine industry using a computable general equilibrium (CGE) model of the Australian economy. Through input cost reductions, the grape and wine industry is projected to gain from the GST tax package. Thus the industry can still gain even though wine consumption is taxed a little more heavily after than before the introduction of the GST. This is particularly so for the export‐oriented premium wine segment. A switch from the current ad valorem to a revenue‐neutral volumetric tax on wine under the GST is shown also to favour the premium segment of the industry, but at the expense of the non‐premium segment.     

Accounting for Growth in the Australian Wine Industry, 1987 to 2003

A computable general equilibrium model of the Australian economy is used to account for the dramatic growth in Australia's wine industry between 1987 and 1999, and to project grape and wine volumes and prices to 2003. Export demand growth has made a major contribution to total output growth in premium wines, and accounts for most of the increase in the producer price of premium red wine. Domestic consumer preferences have shifted, mainly towards premium red wine, but there is also some evidence of growing demand for premium white wine since the mid 1990s. From the perspective of producers, productivity growth, while being less important than growth in domestic demand, appears to have more than offset the negative effects on suppliers of wine consumer tax increases. From the domestic consumers' perspective, however, tax hikes have raised retail prices much more than productivity gains have lowered them. The high and sustained levels of profitability resulting from export demand growth have led to a massive supply response in Australia. Even so, by 2003 Australian wine output will still be less than 5 per cent of global production.     

The Structural Power of Business and the Power of Ideas: The Strange Case of the Australian Mining Tax

In 2010 the Australian federal government fought and lost an intense and very public battle with the country's mining industry over the introduction of a new ‘super-profits’ tax. The proposed tax was withdrawn and the Prime Minister, Kevin Rudd, was removed from office. Why did the government lose this battle and what can this episode tell us about the nature and determinants of business power? We argue that business power is not an objective condition but is shaped subjectively and inter-subjectively. What counts in the power equation is not whether business investment is essential for growth or whether business will disinvest if a new tax is imposed, but whether actors believe this to be the case. One reason why the structural power of business varies is because actors’ normative and causal ideas about the value and determinants of business investment vary. In the Australian case ministers did not believe that the introduction of a new tax would jeopardise investment. Ministers did however come to believe that the mining industry had successfully persuaded a large number of voters that the introduction of a new tax would jeopardise investment, employment and growth. This is why the tax was eventually abandoned.     

Progressivity Index of Sales Tax on Individual Expenditure Items in Australia*

The main contribution of this paper is to provide the estimates of the degree of progressivity (or regressivity) of the sales or excise tax on more than 300 individual consumption items. This is the first tax incidence study which considers such a fine classification of goods and services. The estimates based on the Australian Household Expenditure Survey 1975–7 6 provide a guideline for determining the tax rates on individual consumption items. Several interesting findings which emerge from the numerical results given in the paper suggest the usefulness of considering such a fine classification of goods and services .     

Federal excise tax increase and its effects on U.S. tobacco production

Using the equilibrium displacement model, we examine the impact on tobacco farms of the decrease in cigarette sales due to the increase in prices induced by the federal excise tax hike that went to effect on April 1, 2009. First we estimate the effect of the increase in the federal excise tax on cigarette price and sales. Then, we estimate the effect of the decrease in cigarette sales on tobacco farms. Results suggest that under a scenario of market power implied by a conjectural elasticity of 0.11 manufactures could charge $0.23 per pack more than the federal excise tax increase, which would be enough to offset the estimated 1.42 billion-pack sales decline and to maintain the industry’s revenue net of taxes. This decrease in cigarette sales induced by the increase in the federal excise tax would result in the tobacco leaf output and price declining by 2.85 and 0.41%, respectively. As a result, the tobacco leaf sector would sustain a loss of 3.25% in revenue, amounting to nearly $48.4 million.     

THE ECONOMICS OF INTRODUCING WINE INTO GROCERY STORES

The repeal of the Prohibition Act in 1933 introduced many state‐specific regulations in wine markets. For example, 15 states currently have laws that restrict wine sales in grocery stores. Several of these states have proposed changes that would expand the distribution of wine; however, the proposals have met significant resistance from key stakeholders and none have resulted in legislation. It is widely expected that additional proposals will be initiated, but with more attention given to mechanisms that would address some of the transitional issues. A simulation model is developed here to assess the likely economic effects of introducing wine into grocery stores in New York State. Results indicate that tax revenue would increase by $22 million annually, revenue for in‐state wineries would increase by approximately 13%, and revenue for liquor store owners is calculated to fall by 28%. Simulation results are subsequently used to develop a framework for evaluating the transitional costs of policy reform in this highly regulated industry. (JEL K23, Q18)     

Towards a Negative Income Tax System for Australia

The undue complexity of the Australian tax-transfer system is outlined as are the associated high effective marginal tax rates for many individuals and families. A negative income tax system is a possible solution to these problems.
The most radical version of negative income tax is a 'basic income/flat tax' system which combines universal tax credits (that vary according to presence of children, disability etc.) and a flat tax rate on private income. Using NATSEM's microsimulation model STINMOD it is found that to ensure that no current social security beneficiaries become worse off under such a system would either be very expensive to introduce or require a tax rate that is likely to be unacceptably high. Less radical versions of negative income tax are also costed, incorporating the possibility of varying tax rates, the tapering out of tax credits, and placing some restrictions on the granting of tax credits. This makes negative income tax look more feasible.
The analysis does not incorporate behavioural responses. Since the motivation for a negative income tax system is largely to achieve such responses (for example, labour supply responses), this feasibility analysis might have been unduly harsh. Research is required to incorporate behavioural responses into the analysis.     

Performance-based Wages in Tax Collection: The Brazilian Tax Collection Reform and its Effects

We use panel data from the Brazilian tax collection authority to examine the effects of a major incentive reform instituted in 1989 to improve tax enforcement. Beforehand, fine collections per inspection were relatively stable; however, a striking trend break occurred afterwards, which we attribute to the incentive reform not to changes in the macroeconomy or personal and corporate income tax rates. Our estimates suggest the growth in fines per inspection after the reform is about 75% above what it would have been without it and that there is substantial heterogeneity in the impact of the reform across tax regions.     

环境保护税对经济和碳排放影响研究——以江苏省为例

环境保护税的征收,有效减少了污染物排放,同时也会对经济和碳排放产生一定影响。通过构建包含环境保护税模块的CGE模型和江苏省2018年环境社会核算矩阵,模拟分析不同环境保护税税率对江苏省经济发展和碳排放的影响。研究发现:(1)征收环境保护税会给江苏省经济带来负面影响,但影响程度较小,当征收税率上升时,江苏省GDP、出口、省际调出等会下降,而居民和地方政府收入几乎没有变化。(2)环境保护税税率上升时,不仅会增加环境保护税收入,还会减少江苏省碳排放水平。(3)对于大多数行业,环境保护税税率上升会造成行业产出下降,但是对于污染物排放强度较低的行业,行业产出会上升,碳排放会增加。(4)为了更好地完成碳减排目标,建议江苏省可以适度增加环境保护税税率或加征碳税,对于污染物排放浓度较低的行业,可以采取补贴措施鼓励发展;对于污染物排放强度较高的行业,要推动转型升级,降低排放强度。     

Corporate Investment and Tax Disincentive: Evidence from China

This study investigates how taxes influence corporate investment behavior. Based on a census of Chinese industrial enterprises, we utilize a tax-adjusted q model to examine the effects of taxes on corporate investment in fixed assets in China. Results show that the effective tax rate has a relatively small but significantly negative impact on Chinese firms’ investment in fixed assets. We extend the tax-adjusted q model to control for the lagged investment effect and peer effect of investment. Models with these effects do better at explaining the impact of taxes on firms’ investment. The lagged investment models present smaller but significant tax disincentive. Firms compete for investment with other firms both in the same region and in the same industry through peer effect. In addition, the tax disincentive differs among state owned enterprises, private enterprises, and other enterprises in China.     

Twenty-first century bootlegging: unlawful wine shipments and direct-to-consumer laws

Direct to consumer (DTC) shipping has been a burgeoning segment of the wine industry for some time. However, regulatory policy has not kept pace with the growing reach and availability of these wines which has left this sector of economic activity prohibited in states that historically disallowed DTC wine shipping. Using detailed shipping records of wine shipments into the state of Oklahoma, a state that explicitly disallows direct shipping, we describe the nature of illegal wine purchasing in the face of prohibition by linking economic data from the American Community Survey at the zip code level for each purchase. We find that zip codes with 10% higher incomes purchase 7.4–9.3% more DTC wine, and that race is not a useful predictor in DTC demand. Our results have forward-looking relevance as well as more states amend their laws to allow DTC wine shipping. In just a 6-month period, an estimated $186,629 may not have been collected in excise and sales taxes in Oklahoma. This figure is plausibly a lower bound of future tax collections due to DTC prohibition.     

Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment

We consider the impact of tax policy uncertainty on firm level and aggregate investment, comparing investment behaviour when uncertainty is due to a shock following Geometric Brownian Motion (GBM) versus when random discrete jumps in tax policy occur. Expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty. Aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional GBM model but can be enhanced in the jump process model.     

城镇居民间接税负担的演变

本文研究了进入新世纪以来,税收收入高速增长对于城镇不同收入家庭间接税负担的影响.收入越高的家庭负担的间接税越多,但是税收占收入的比例却是低收入家庭的比例大于高收入家庭的比例,间接税是累退的.从2000年到2005年,所有家庭的税收负担比例都增加了,税收累退的程度没有变化.通过把税收负担变化分为税收征管和经济结构引起的实际税率变化和家庭消费结构变化两部分,本文发现实际税率提高是近年来所有家庭税收负担增加的主要原因.     

资源税从价计征改革对资源开采业的经济影响研究

资源税由从量计征转为从价计征会对资源开采业产生经济影响。但资源开采行业税负转嫁能力的理论分析和对11家煤炭开采行业上市公司的实证分析表明:我国资源开采行业具有很强的税负转嫁能力。因此,资源税从价计征改革对资源开采业的经济影响有限,但是很可能通过产业链向国民经济其他部门传导进而对其他行业以及宏观经济产生影响。     

The Environmental and Economic Impact of the Carbon Tax in Australia

To fulfil its emission reduction target pledged in the Copenhagen accord, the Australian Government has determined to introduce a carbon tax from July 1st 2012. This paper simulates the effects on the environment and on the economy of a carbon tax of A$23 per tonne of carbon dioxide proposed by the government with, and without, a compensation policy. We employ a computable general equilibrium model with an environmentally extended Social accounting matrix. According to the simulation results, the carbon tax can cut emissions effectively, but will cause a mild economic contraction. Because the price signal is intact, the proposed compensation plan has little impact on emission cuts while significantly mitigating the negative effect of a carbon tax on the economy.     

Recent Changes in Personal Income Tax

The amendments to the Australian system of personal income tax effected in the 1975–76 budget and in the measures announced by the Treasurer on 20 May constitute the first major change in the system since 1950. The legislation of that year established a structure of tax rates and concessional deductions which remained substantially unaltered for 25 years. During that period, the shape and impact of the personal income tax was affected more by inflation than by legislative change, most of which was concerned either with closing loopholes or with monetary adjustments consequent on inflation.     

Some Effects of Reducing Excess in Infrastructure Charges on the Export Coal Industry*

Excess rail freight and port charges on the Australian export coal industry amount to over 10 per cent of export prices and represent a form of ad valorem tax. Efficiency and distributional effects of removing the excess charges are assessed using a quantitative commodity model and a qualitative general equilibrium assessment. Removal of the excess charge would increase production by 29 per cent by the year 2000, slightly reduce upon prices and generate national efficiency gains of over $150 million a year. The mining industry and the Federal government gain and the State governments lose     

On the Tobin Tax

Abstract

This paper clarifies why a transaction tax, such as the Tobin Tax, can stabilize financial markets. In markets that are already fairly deep, relatively small changes in trading volume are unlikely to have any impact (positive or negative) on volatility. Thus, a Tobin Tax can potentially have a stabilizing effect on international currency markets not because it reduces the excessive volume of transactions of speculators, but because it can slow down the speed with which market traders react to changes in prices of currencies. Moreover, it can lower their elasticity of future price expectations with respect to current price changes, which also has a stabilizing effect. Thus, to the extent that a Tobin Tax causes traders in financial markets to delay their decisions, a few ‘grains of sand in the wheels of international finance’ can indeed be stabilizing. Whether or not that is sufficient to prevent speculative attacks on currencies is a different matter.     

股票期权的税收效应及非税成本

股票期权最早是基于税收目的出现及税收政策作用于股票期权使得股票期权产生替代效应,然而,非税成本会对股票期权的税收效应产生冲击,因此,公司制定股票期权时应充分考虑非税成本对其的影响,否则可能导致负面影响。     

The Effect of Tax Convexity on Corporate Investment Decisions and Tax Burdens

This paper examines the effect of convexity in the corporate tax schedule on corporate investment decisions and tax burdens. Using a contingent‐claims model, we show that greater tax convexity results in (i) earlier exit, (ii) delayed investment (except for small entry cost), and (iii) reduced corporate risk taking (except for small entry cost and unfavorable operating conditions). Also, the effective tax burden is an increasing function of tax convexity. The convexity of the tax schedule has a nontrivial impact on corporate investment decisions and investment levels. These results are relevant for economic growth, which depends (at least partly) on investment levels, and tax policy makers should be aware of these effects when making adjustments that might impact the convexity of the corporate tax schedule.