Towards a new tax covenant

Summary In The Netherlands, the high tax burden on employment income cripples the labor market, whilst the highly differentiated, if low, tax burden on capital income distorts the capital market. Building on the experience with dual income taxation in the Nordic countries, a new tax covenant is proposed comprising lower average and marginal tax rates on labor income and a more even-handed treatment of capital income. Specifically, capital income should be taxed at a low, proportional rate. Flanking measures are required to improve the workings of the labor market; notably, social benefits for people who can work as well as housing subsidies should be reduced. More fundamentally, a change in the social order is desirable which places greater weight on equal opportunities instead of equal outcomes.Thou shalt not muzzle the ox when the treadeth out the cornDeuteronomy 25:4 The author is grateful to Richard Bird, Lans Bovenberg, Flip de Kam, Jeroen Kremers, Ruud de Mooij, Leif Mutén, and Peter Sørensen for their stimulating comments on an earlier version of this article.Adapted from the Dutch version of the commencement address delivered at Earsmus University Rotterdam on November 8, 1994. Amounts in guilders can be converted into dollars by applying the exchange rate: Dfl. 1=US$ 0.63 (March 31, 1995).     

构建我国地方税主体税种的探讨

地方税收是提供地方性公共产品的资金来源。由于缺乏主体税种,导致我国地方税收出现税源不稳定,增长难度大的局面。因此,有必要培育地方主体税种。从近期目标看,营业税与企业所得税是地方税主体税种;从远期目标看,财产税应建设成为我国地方税的主体税种。     

Welfare Effects of Capital Taxation in a Small Open Economy

In a small open economy, the welfare effect of capital taxation depends on the allocation of the tax revenue as well as the tax system. If tax revenues are used to finance debt or government spending, an increase in either residential or territorial capital taxation will reduce the welfare of the representative individual. If tax revenues are transferred intergenerationally, an increase in the residential capital tax rate will increase the steady-state welfare when the after-tax interest rate is greater than the growth rate. If the revenue is rebated to the tax payer, an introduction of territorial capital taxation may increase welfare when the growth rate is relatively high. In the case where either the revenue from residential capital taxation is rebated to the tax payer or the revenue from territorial capital taxation is transferred intergenerationally, the welfare-maximizing tax rate appears to be zero.     

美国个人所得税税率结构演变对我国个税改革的启示

本文介绍美国个人所得税税率结构的演变,与我国个税税率结构进行比较分析,指出我国个人所得税税制存在问题,并借鉴美国经验提出完善我国现行税制的建议。     

Taxation and tax reform in LDCs: Lessons for South Africa

Taxation in South Africa will increasingly have to focus on political and economic developmental demands. Two important lessons from the experience of developing countries with taxation and tax reform are that the tax system should aim at not taxing the poor (rather than trying to level down the income of the rich) and that tax policy has a special role to play in generating revenue for development, a role which it should endeavour fill in a neutral way. With these lessons in mind taxation and tax reform are analysed in South Africa. It is concluded that the tax system is relatively efficient but that there has been retrogression in attaining equity objectives.     

Revenue Effects of Tax Facilities for Pension Savings

Many countries have tax facilities for pension savings. These facilities are often associated with the application of the cash-flow treatment of pensions: pension contributions are tax-exempt, capital income of pension funds is tax-exempt, and pension benefits are taxed, but usually at a relatively low rate. This paper investigates the revenue effects of a cash-flow tax regime for pension savings by full present-value calculations. A comprehensive income tax system is used as a benchmark. We present an empirical analysis for the Netherlands as a typical example of a country with funded pensions. Our calculations show that current taxation of pensions implies a major tax revenue loss. For the year 2003, we estimate a fiscal pension subsidy of 1.4% to 1.5% of Gross Domestic Product (GDP).

Generational incidence of savings taxation versus capital-income taxation

This paper examines the incidence of capital taxation in a model in which the taxation of capital is clearly justifiable and using analytical techniques from the tax reform literature. The taxation of capital has long been a controversial issue, with much of the literature concluding that savings/capital-income should not be taxed. Recently, however, Blackorby and Brett have shown in a model with several desirable features that it can be optimal to tax capital, and they provide a simple yet compelling argument in favor of both savings taxation and capital-income taxation. We use the Blackorby–Brett model (i.e. a model in which the taxation of capital can be justified) to revisit the question of the incidence of capital taxation. We focus on the generational incidence of capital taxation; that is, the incidence on a young generation and an old generation. However, an interpretation in terms of the incidence on "capital" versus "labor" (as is traditional in the tax incidence literature) is also provided.     

Preferential corporate income tax treatment: Valuation in the market portfolio

In the setting of the market portfolio, the impacts of preferential corporate income tax treatments through the valuational reduction for risk are opposite to and offset the impacts through the expected proceeds. This suggests that focusing on the absolute valuation of tax-favored firms results in the undermeasurement of implicit taxes on returns on investments in tax-favored firms and the relative valuation with reference to fully taxed (i.e., tax-disfavored) benchmark firms be used. In addition, corporate income taxes imposed on entities and capital income taxes imposed on investors have opposite valuational effects through the endogenously derived market-aggregate aversion to risk.     

Welfare cost of higher tax rates: An empirical laffer curve for The Netherlands

Summary On the basis of a simple general equilibrium model calculations are made of the welfare cost of higher tax rates. Furthermore, the Laffer curve for The Netherlands is estimated. Taking 1970 as the basic year and assuming that all tax revenues were paid back in lump-sum benefits, the Laffer curve topped at a marginal rate of 66.9076 and theMEB stood at 1.24. This means that an additional guilder in tax revenues involves a welfare loss of Dfl. 1.24 on top of the direct tax burden. Considering the true proportion of government income being spent on benefits, the Laffer curve is found at a marginal tax-rate of 70.1016. In that case theMEB amounts to 0.83 in 1970. The most striking finding was the sharp rise in theMEB, from 0.83 in 1970 to 6.36 in 1985. This high welfare cost is an indication that The Netherlands is nearing the limits of taxation on income. It is found that market signals are disturbed most when tax revenues are used for income transfers in a form which does not influence allocation decisions at the margin (lump-sum benefits). In that case relative prices are affected, whereas income effects are neutralized.The authors wish to thank Professor F. W. Rutten, J. van Sinderen and other colleagues at the Directorate for Macro-economic Policy of the Ministry of Economic Affairs for their stimulating support and critical remarks. J. Hulsman translated the original Dutch draft.     

Long-Run Implications of Social Security Taxation for Growth and Fertility

This paper compares long-run implications for growth and fertility of four types of taxation for social security with positive bequests. A tax rise under lump-sum taxation enhances growth but lowers fertility, while other types of taxation do so under additional restrictions. A tax rise under consumption taxation is less likely to stimulate growth and to reduce fertility than under payroll taxation. A rise in an interest income tax raises fertility, reduces both savings and human capital investment, and hence is harmful for growth. The case with zero bequests is also discussed.     

资本市场税收调控问题探析

本文主要结合现行税制中关于资本市场的税收政策,分析现行资本市场税收政策存在的不足,提出利用税收政策规范资本市场发展的对策建议。     

Dual Income Taxation: A Promising Path to Tax Reform for Developing Countries

The dual income tax combines a progressive tax on labor income and a lower flat tax on income from capital. Unlike flat tax systems, a dual income tax provides developing countries greater flexibility in addressing tax competition while retaining progressivity. Countries could use the move to a dual income tax system not just as an opportunity to rationalize the taxation of income from business operations and investment but also as a vehicle for broader reform of their tax systems.     

中国企业海外并购的税收风险与控制

随着中国经济的持续发展,中国企业在海外并购中扮演着越来越重要的地位。但是,海外并购存在着许多的风险。其中,税收风险是其中一个不容小觑的方面。对海外并购的税收成本进行剖析,企业主要面临着所得税缴纳的税收成本。而在海外并购中,所得税的缴纳主要存在跨国重组以及国际双重征税的两个重要问题。分别是跨境重组和国际双重征税问题。针对这两个问题,企业在税法风险控制方面要注意利用重组优惠和避免双重征税。在维护我国税收利益的同时,降低税收成本。     

The rise and decline of industrial foundations as controlling owners of Swedish listed firms: the role of tax incentives

ABSTRACT

Beginning in the interwar period, industrial foundations became a vehicle for corporate control of large listed firms in Sweden. In the 1990s they were replaced by wealthy individuals who either directly own controlling blocks or who own them through holding companies. We study potential explanations for this change and propose two tax-related candidates: shifts in the relative effective taxation across owner types and the dismantling of inheritance taxation that prevented the generational transfer of the ownership of large controlling blocks. We exploit newly computed marginal effective capital income tax rates across capital owners, accounting for all relevant factors, including rules governing tax exemptions. We show that the 1990–91 tax reform, abolition of the wealth tax for controlling owners in 1997, 2003 tax exemption of dividends and capital gains on listed stock for holding companies with a voting or equity share of at least 10 percent, and abolition of the inheritance and gift taxes in 2004 reversed the rules of the game. Recently, control has largely been wielded through direct ownership, and the role of foundations is rapidly declining. These findings point to the importance of tax incentives for the use of foundations as the control vehicle of listed firms.     

跨国并购专利交易的税务问题

影响跨国并购中专利交易的一个重要影响因素就是税负考量。外资并购中国企业的专利交易所涉国内税主要为所得税、营业税等。中国企业海外并购当地的专利技术需关注当地的税务问题。国际或双边协调机制对于跨国专利技术转移具有重要作用。     

两岸旅游税制比较分析

大陆和台湾流转税、所得税的主要税种都与旅游相关,但各税种名称、相应各税种的课税要素存在差异;台湾旅游税制的某些方面,如减少重复征税、较好的调节功能、有效的税收征管等,可资大陆借鉴。     

社会公平与个人所得税改革

我国的贫富差距日益拉大,而我国的个人所得税存在课税模式不合理、费用扣除标准不合理、税制设计不完善、税收征管水平低下等问题,不能起到应有的调节个人收入分配,促进社会公平的作用,应当顺应国际潮流,结合我国的实际情况,作出相应的变革。     

Corporate tax systems and cross country profit shifting

The paper analyses optimal taxation of corporate profits whengovernments can choose both the rate and the base of the corporationtax, but are constrained to collect a given amount of corporatetax revenue. In a standard two-period model of investment andinternational mobility of portfolio capital only, the optimaltax system allows a full deduction for the costs of capital.When foreign direct investment is permitted, however, and firmscan shift profits between countries through transfer pricing,it will be optimal for each government to distort investmentdecisions in order to reduce tax rates and limit the incentivefor profit shifting.     

How Sensitive is FDI to Differences in Corporate Income Taxation within the EU?

Differences between corporate taxation of EU member states drive a wedge between after-tax and pre-tax productivity. This implies that productivity could be increased by reallocating capital from low-tax to high-tax member states. Moreover, the integration of the EU capital market may trigger tax competition among member states. The responsiveness of investors to taxation is crucial for the importance of both the misallocation of capital and the extent of tax competition. In this paper we measure this responsiveness by examining the relation between FDI positions and effective corporate income tax rates. Our estimates show that investors from one EU member state increase their FDI position in another EU member state by approximately four percent if the latter decreases its effective corporate income tax rate by one percentage point relative to the European mean.     

Tolerance of tax evasion

We present a formal model in which individuals want the government to tolerate tax evasion because, in a context of limited state capacity, evasion provides insurance. Also, preferred tolerance of tax evasion increases with income, because government programs are redistributive, and decreases with perceived state capacity, because taxation is less distortionary in more capable states. We test the model using a question in the World Values Survey (WVS) about how justifiable cheating on taxes is. We find that tax evasion justifiability views present an inverted-U shape in perceived risk and increase with individuals’ income.