Indirect taxation with shadow cost of public funds in mixed oligopoly

We adopt a mixed oligopoly model, where a state-owned welfare-maximizing public firm competes with a profit-maximizing private firm, to compare the welfare effects of the specific and ad valorem tax in the presence of the shadow cost of public funds. Following the assumption of most previous literature that total output is constant under specific and ad valorem taxation, we find that, when the shadow cost of public funds exists, the tax policy must be adjusted according to the privatization level of the public firm; if the privatization level is low (medium, high), the government needs to adopt ad valorem (specific, ad valorem) tax. Moreover, the private firm will earn a higher (lower) profit under ad valorem tax than under specific tax, if the public firm is not fully privatized and the shadow cost of public funds is high (low).     

Patterns of Property Tax Exploitation Produced By Infrequent Assessments

A bstract . Out of dace assessments of real property for ad valorem taxation may give rise to systematic inequities in the distribution of the tax burden. One such inequity is the exploitation of a taxing jurisdiction's core area by its periphery. We provide an explanation of how such exploitation may arise. This explanation is tested empirically by observing the patterns of assessment in a sample of Pennsylvania school districts. We find a consistent pattern of overpayments, supporting an hypothesis that core areas are exploited by peripheral areas. The overpayments to school districts could be claimed by city governments.     

A note on computing equilibria in economies with activity analysis models of production

Equilibria in economies without production can be approximated by computing fixed points of continuous functions. With production present, the functions are usually replaced by set-valued mappings and fixed-point algorithms converge slowly. Here we propose continuous functions whose fixed points are equilibria in economies whose production is modelled by a finite list of activities. The penalty is that a least-distance program must be solved at each iteraction. The approach generalizes to allow ad valorem taxes on production. Finally, analogous arguments apply to the computation of an invariant optimal vector of capital stocks.     

Labor mobility and the incidence of the residential property tax

This paper analyzes the incidence of the residential property tax in an economy with two communities. Workers are perfectly mobile so that their utility levels are equal in the two communities in equilibrium. The property tax is modeled as an ad valorem tax on housing services.     

The Vermont Land Gains Tax Experience With It Provides a Useful Lesson in the Design of Modern Land Policy

Abstract . Vermont is currently the only state which employs a special capital gains tax on certain land sales. A comparison between the Vermont land gains tax and Henry George's Single Tax provides a useful lesson in the design of modern land policy. The Vermont tax is aimed at discouraging short run land speculation, while the Single Tax seeks to discourage the long term quasimonopoly of land ownership. The Single Tax would capture unearned increments to land value while the Vermont tax applies only to realized capital gains and tends to reward long term speculators. An empirical analysis of the Vermont tax reveals that tax revenues have been small, and that the tax has not prevented a rise in land values. In fact, the Vermont tax may have increased land prices by restricting available land supply. Although the Vermont tax intended to curb speculation and reduce land subdivision activity, it is not a substitute for land use planning and carefully designed growth control ordinances and regulations.     

Alternative Methods of School Finance: An Empirical Analysis of Cities in San Diego County

. Two alternatives to the local school property tax are explored using a simulation model: a power equalizing property tax and a state-wide property tax. The effects on residents’tax burdens and service levels are estimated and compared for residents of 13 cities in San Diego County. Under each of the available options shifts in tax burdens would occur. One high income city is a major beneficiary. Three others which would be required to contribute more to education are otherwise dissimilar; one is already taxing itself heavily. When tax effort is considered, cities intended to be prime beneficiaries do benefit but not greatly. The principal gainer is a city with high income and high property values. This analysis does not indicate that these alternative programs are more equitable than the present property tax.     

Natural Monopolies and Rent: A Georgist Remedy for X-Inefficiency Among Publicly-regulated Firms

Abstract . Publicly-regulated firms are sheltered from competition and are inefficient. When analyzed within the theoretical framework of X-inefficiency, it is discovered that they are subsidized by a quasi excise tax and result in deadweight losses to society. When the losses and X-inefficiency are understood as rent, an appropriate public policy is to levy a tax on these firms. A tax would raise productivity and increase tax revenues without reducing output.     

Absentee Ownership of Farmland and State and Local Tax Policy: Income Tax Promotes Absenteeism, But the Property Tax Can Be Used to Strengthen Family Farms

Abstract . The incentive effects of state and local tax policies in promoting or inhibiting the ownership of farmland by non-operators are evaluated. Previous research on the economic, social and environmental effects of absentee ownership is reviewed as well as evidence regarding the impact of tax laws on absentee owners versus owner-operators. The Federal tax laws, it is found, work to increase land prices, reduce entry into farming by young farmers, and increase absentee ownership. State income tax policies may reinforce these effects. Property tax policies, on the other hand, may counteract income tax laws by giving tax relief preferentially to owner-operators. Several modifications of property tax relief programs are suggested.     

Property Tax Assessment Reform: A Source of Local Revenue Windfall or Fiscal Retrenchment

Abstract . Researchers, state officials and taxpayers have often speculated that property tax assessment reform would lead to an increase in the overall tax burden. They contend that, given the large non-discretionary increase in the tax base during the reform, local governments can raise more resources without increasing the nominal tax rate. An empirical analysis of 74 towns in New York supports that position. However, two types of tax shifts that occurred in the wake of reassessment—interclass shifts of tax burden to the owners of residential propertieskovn the other property classes and intra-class shifts observed among residential property owners—have caused significant moderation in this pattern of local government behavior. Therefore, tax reform, while it bestows revenue windfalls upon some local governments, may require fiscal retrenchment by others.     

Federal Income Tax Reform in the United States: How Did It Happen? What Did It Do? Where Do We Go from Here?

Abstract . The 16th Amendment to the U.S. Constitution in 1913 provided the legal basis for progressive federal income taxes. They now yield revenues of about $450 billion annually. Tax base erosion eventually produced a levy in serious violation of norms of allocation efficiency, distributional equity, and macroeconomic performance. Vested private interests influenced legislators by propaganda and campaign contributions to minimize their tax burdens at the expense of less wealthy taxpayers. The result was an irrational and badly flawed tax structure. In 1981 the maximum marginal tax rate on income from property and wealth was significantly reduced along with other bracket reductions. The income tax reform movement culminated in 1984 to 1986. It expanded the base of the tax while reducing marginal rates as well as brackets, with little change in the distribution of the burden among different income groups but achieving some greater equity in tax liabilities for those with similar incomes.     

Tax competition in a fiscal union with decentralized leadership

This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that local tax policy is chosen prior to federal transfers. The paper's main result is that ex-post federal policy neutralizes horizontal fiscal externalities, insulating tax policy from capital mobility. Federal policy, however, introduces a new source of inefficiency unrelated to tax competition. Specifically, ex-post transfer payments prove to be equivalent to an interstate revenue-sharing system which may render federal intervention in the presence of fiscal externalities welfare-deteriorating relative to tax competition.     

Interregional tax competition and intraregional political competition: The optimal provision of public goods under representative democracy

This paper explores the implications of the interaction between interregional tax competition and intraregional political competition for the optimal provision of public goods under representative democracy à la (Osborne and Slivinski, 1996) and (Besley and Coate, 1997). As an extension of Hoyt’s (1991) finding that intensified tax competition is always harmful and aggravates the extent to which public goods are undersupplied in a region, we show that intensified tax competition can be beneficial if political as well as tax competition is considered. In particular, we identify plausible conditions under which (i) there is an optimal intensity of tax competition such that the interaction between interregional tax competition and intraregional political competition will result in the optimal provision of public goods and (ii) intensified tax competition will be beneficial if and only if the degree of tax competition is less than this optimal intensity.     

Site Value Taxation and Manvel's Land Value Estimates

Replacement of the existing property tax with a. tax on site value requires that the site value base be sufficiently large to generate the same revenue as the existing tax. The adequacy of the site value base is examined in view of Manvel's land value/property value estimates. The conclusion is that only partial replacement may be feasible in many cases, but this may still produce a desirable effect.     

Henry George and the Institution of Private Property in Land: A Property Rights Approach

Abstract . Conflicting statements concerning whether the implementation of Henry George's single tax proposal would destroy the institution of private property in land have appeared in the literatures of economics and other disciplines. A number of writers have implied that the taxation of Ricardian rent is equivalent to land nationalization. In the main, followers of George have denied that the single tax would abolish private property in land. Their claim is based on the fact that land titles would remain in private hands under the single tax. Since the whole question of private property is beset with ideological difficulties, a property rights approach is applied to this issue in an attempt to resolve the controversy. The conclusions are that the actual implementation of George's system would not destroy private property in land and that it is incorrect to equate the single tax with land nationalization.     

Tourism, Vacation Home Development and Residential Tax Burden:

Abstract . Differences in property tax rates among communities within a regional economy are a source of inefficiency and inequity. Less developed rural areas where natural amenities exist have often attempted to use the tourist industry as a means of importing economic development. Promoters of vacation home development argue that the impact on the local tax base is positive. However, the quantitative research in this paper indicates that under certain circumstances, vacation home development has the effect of increasing the tax burden on residential property.     

Ireland's Mining Boom:

Abstract . Over the past 15 years, Ireland has experienced a meteoric rise to prominence in mining. A decade ago output of metallic minerals was virtually non-existent. Today, metal concentrates from Irish mines are valued at $55 million annually, or 4 percent of total national exports. Metals have assumed fourth place among individual export categories. There is no single explanation for the mining boom. Rather, it must be attributed to several interrelated factors. Most notably, these include government tax relief incentives for economic development, recent advances in mining technology, the role played by Canadian exploration companies, and the impetus created by initial ore discoveries. Mining development has impacted significantly on the country, in terms both economic and social. It has bolstered the economy, provided valuable employment, spurred regional development and helped discourage emigration in rural areas. However, owing to a dramatic reversal of national mining policy in 1974, the industry's future is now in some question.     

Community Classification and Growth in Effective Property Tax Rates: A Case Study of Rate Divergence in 39 Rhode Island Towns

Abstract . A multiple regression analysis of cross-sectional data for 39 Rhode Island towns indicates that variation in the level of effective property tax rates among communities can be substantially explained. The determinants are a community's population density, median family income, real property per capita, and the ratio of commercial to total property tax, revenue. Population density serves as a criterion for judging the “cityness” (1) of a community, that is, its degree of urbanization. A positive relationship exists between population density and effective property tax rate. Communities with the highest population density tend to have the highest tax rates. This relationship is shown in each analyzed year. Covariance analysis applied to the regression coefficients for the various years reveals a significant change in the population density coefficient. This coefficient change indicates a divergence in effective property tax rates among city, suburban, and rural communities.     

Experiencing Change in German Controlling – Management Accounting in a Globalized World

Abstract

In this study, I consider the effects of tax risk from tax volatility on the pricing of syndicated debt. Tax volatility is an interesting feature in that managers have some discretion over the risks they take with their tax strategies, which, however, are often harder to monitor for outsiders than risks related to other business activities. Framing my predictions based on the theoretical model developed by Merton [1974], I hypothesize and find that tax volatility is incrementally informative to other priced risks suggesting that tax risks per se are relevant to lenders. Moreover, I find that the results are stronger when the loan contract does not include performance pricing provisions or other restrictions, such as capital expenditure covenants, that protect lenders. This evidence adds to knowledge about the real effects of tax risk.     

Cash flow analysis for energy impacted local governments—a case study of mercer county,north dakota

Energy resource taxation policy has become a major issue in a number of energy producing areas and particularly in the western united States. This paper compares alternative energy taxation systems in terms of their implications for local governments and local planning. A fiscal impact simulation model is utilized to evaluate a severance-production tax system and, alternatively, an ad valorem property tax system. The results indicate that the form of taxation system adopted can have a major influence on the fiscal outlook for local governments in areas affected by large scale development projects and thus on the welfare of area residents. These results also suggest that local fiscal considerations should receive careful attention in local planning and policy formulation.     

An Examination into the Relevance of the Median Voter Model: Empirical Evidence Offers Support for the Model and Certain Uses

Abstract . This study analyzes some criticisms of the empirical use of the median voter model. In an attempt to evaluate these criticisms, a local school expenditure model is constructed which incorporates various income measures and various measures of tax price. Results indicate that median income outperforms other income measures. This empirical evidence offers support for the median voter model and its use in empirical work. The median tax price measure proved not to be of statistical significance. It should not be used without independent validation. Moreover, it does not outperform other tax price measures, in this test, at least. Further research is needed to explain this seeming anomaly.