Tax Competition and Revelation of Preferences for Public Expenditure

This paper considers a federal country composed of local jurisdictions that differ in their inhabitants' tastes for public goods, and which finance local public expenditure through a source-based tax on capital income. The taste for public goods is the private information of local governments. The central government seeks an optimal policy, in which grants to local governments are conditioned on local tax rates. The uninformed central government seeks both to allocate capital efficiently among jurisdictions, and to induce jurisdictions to provide an efficient mix of private and public consumption. It is shown that there persist at this constrained optimum both some misallocation of capital and some violation of the Samuelson rule for optimal public good provision in every jurisdiction.     

Optimal taxation and intergovernmental transfer in a dynamic model with multiple levels of government

In this paper, we study the optimal choices of the federal income tax, federal transfers, and local taxes in a dynamic model of capital accumulation and with explicit game structures among multiple private agents, multiple local governments, and the federal government. In general, the optimal local property tax is zero if the local property tax is constrained to be nonnegative, whereas the optimal local consumption tax is always positive. When the local consumption tax is chosen optimally, the federal income tax can be either positive or negative. For most reasonable parameter values, our numerical calculations have shown that with a positive local consumption tax there exists a reverse transfer from local governments to the federal government.     

Mobile Labor, Multiple Tax Instruments, and Tax Competition

The tax competition literature shows that local governments keep property tax rates inefficiently low to prevent capital outflows, thereby underproviding local public goods. This paper adds mobile labor and an alternative tax instrument to the model. Jurisdictions have access to a property tax levied on land and capital, plus either a head tax or a labor tax. Scale economies in public good provision create incentives to use the property tax, but these incentives are not accompanied by increased incentives to underprovide public goods. In contrast, underprovision is associated with the use of a distortionary labor tax.     

Lobbying and tax competition in an oligopolistic industry: a reverse home-market effect

This paper studies tax competition between two asymmetrical countries for an oligopolistic industry with many firms. Each government sets its tax rate strategically to maximize the weighted sum of residents’ welfare and political contributions by owners of firms. It is shown that if the governments care deeply about contributions and trade costs are low, the small country attracts a more than proportionate share of firms by setting a lower tax rate. The well-known home-market effect, which states that countries with a larger market attract a more-than-proportionate share of firms, may be reversed as a result of tax competition by politically interested governments.     

Fiscal news and macroeconomic volatility

This paper analyzes the contribution of anticipated capital and labor tax shocks to business cycle volatility in an estimated New Keynesian business cycle model. While fiscal policy accounts for about 15% of output variance at business cycle frequencies, this mostly derives from anticipated government spending shocks. Tax shocks, both anticipated and unanticipated, contribute little to the fluctuations of real variables. However, anticipated capital tax shocks do explain a sizable part of inflation fluctuations, accounting for up to 12% of its variance. In line with earlier studies, news shocks in total account for about 50% of output variance. Further decomposing this news effect, we find permanent total factor productivity news shocks to be most important. When looking at the federal level instead of total government, the importance of anticipated tax and spending shocks significantly increases, suggesting that fiscal policy at the subnational level typically counteracts the effects of federal fiscal policy shocks.     

借鉴国际经验完善我国促进循环经济发展的税收政策

循环经济是可持续发展的新兴经济增长模式,为了促进循环经济的发展,西方各国纷纷采用不同税收手段,如荷兰、丹麦、瑞典等国纷纷开征名目众多的环境税;美国联邦和地方政府分别开征不同的环境税;日本也在各不同环节开征环境税,与此同时,各国纷纷采用包括加速折旧、税收减免、税收抵免等税收优惠政策鼓励循环经济的发展,不断"绿化"本国税制。在借鉴这些经验的基础上,我国应完善立法、改革现行税制,开征新的税种,促进循环经济的发展。     

Coordination of capital taxation among asymmetric countries

This paper studies international fiscal coordination in a world of integrated markets and sovereign national governments. Mobile capital and immobile labor are taxed in order to finance a fixed budget. This generates productive inefficiency. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. It is shown that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound (i.e., a tax range) which is unanimously accepted.     

Taxation of natural resources and economic growth in Russia's regions

We examine the impact of natural resources on economic growth in Russia's regions since the introduction of the mineral tax in 2002. Using novel measures of regional natural resource rents (mineral tax collections), we demonstrate that non-hydrocarbon wealth has had a slightly positive and hydrocarbon wealth has had no to a slightly negative effect on regional growth since 2002, although mineral-rich regions are richer than other regions. The absence of significant growth benefits to resource-endowed regions is at odds with the beneficial impact of natural resources, and particularly hydrocarbons, on the growth of the country as a whole. We discuss the reasons for this outcome and conclude that the central government was successful in taxing away incremental regional resource rents during 2002–2011, while preserving the pre-2002 regional rents.     

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.     

Is corporate payout taxation a long run phenomenon? Evidence from international data

This paper examines whether dividend and capital gains taxation influences corporate payout policy using the country level data of 21 countries in panel versions of time series models. We find that dividend relative to capital gains tax penalty is cointegrated with corporate payouts (dividends and share repurchases) i.e. corporate payout taxation may be a long run phenomenon. Further, the cointegrating vector estimates are largely consistent with the traditional view of dividend taxation whereby the tax penalty discourages dividends, while the estimates give limited support to the premise that firms substitute dividends for share repurchases in response to an increase in dividend tax penalty. Long run causality also operates between the tax penalty and payouts in the error correction models. Additionally, dividend tax appears to be more influential than capital gains tax on dividend payout decisions. Lastly, taxation affects dividends more significantly in countries with high investor protection.     

Tax Policy Coordination, Vertical Externalities, and Optimal Taxation in a System of Hierarchical Governments

Tax policies of two levels of government (state and federal) with overlapping tax bases are considered. This overlap leads to “vertical” fiscal externalities are considered when several different commodities are in the tax base and the tax bases of the two levels of government may not be identical. When the governments share a tax base, the mix of combined taxes is optimal. With different tax bases, combined taxes are no longer optimal as federal tax rates are adjusted to reflect state public service levels. When grants are available, a welfare-maximizing mix of taxes and public services is obtained.     

Redistribution and regional development under tax competition

This paper considers how capital tax competition affects transfer and development policies in the presence of regional income disparity. In each country, development policies determine the number of rich (poor) regions that (do not) engage in production activities, while transfer policies redistribute income between rich and poor regions. The mix of transfer and development policies is inefficient under tax competition: conditional on the equilibrium tax rate, too much revenue is spent on development policies and too little on transfer policies. This analysis of the expenditure mix implies that development policies are used as a means of regional redistribution even if transfer policies are efficient instruments for this purpose. Moreover, it is shown that the overall level of public expenditure may be too high because of the possibility of over-development.     

基于海外投资商与东道国动态博弈的税收风险研究

海外投资商遭受的东道国税收风险对投资成败具有关键影响作用,如何更好地规避税收风险,实现海外投资收益最大化,是投资者面临的难题。在综合考虑海外投资商对东道国本地企业的技术溢出效应和竞争效应基础上,构建海外投资商与东道国之间的动态博弈框架,分析海外投资商与东道国的策略互动,寻求海外投资商应对税收风险的最优投资策略。研究结果表明：东道国政府通常会给予海外投资商特定免税期,不过达到稳定状态后,均衡税率和海外投资商的资本存量会受技术溢出影响。     

Globalization and tax policy

Globalization is thought to reduce the ability of governments to collect taxes. If labor and capital can move between jurisdictions, then attempts to tax these factors will lead to a “vanishing taxpayer” as factors flee from high- to low-tax regions. More broadly, globalization suggests that there will be some convergence in tax rates across countries. This paper questions this view by examining the impact of globalization on taxation using a two-country, two-factor, two-good model. In particular, we ask how globalization, measured by increased international factor mobility, affects the ability of governments to tax factors. Our quantitative analysis indicates that, while increased mobility reduces revenues to some extent, governments still retain significant ability to collect taxes.     

地方政府政绩诉求、政府控制与国有企业税负

以我国2004—2012年A股非金融类地方国有上市公司为研究样本,在区分了省级政府与市级政府控制的基础上,实证检验了各级地方政府不同的政绩诉求对国有企业控制程度是否存在差异及该控制程度对国有企业税负的影响。研究发现：地方政府的政绩诉求（包括财政盈余、相对经济增长率、失业率等）显著影响地方政府对国有企业的控制程度,且省级政府更注重相对经济增长率及失业率,市级政府更关注财政盈余水平;三个政绩诉求中相对经济增长率对政府控制的影响最为显著;地方政府对国有企业的控制程度与企业税负显著正相关;与省级政府相比,市级政府控制的国有企业税负更重。这表明,增加地方国有企业税负是市级地方政府实现其政绩诉求的重要途径。     

A theory of interregional tax competition

A general equilibrium model is constructed to study tax competition, where local governments compete for capital by holding down property tax rates and public expenditure levels. An exact definition of tax competition is provided, and both the existence and nonexistence of tax competition are shown to be theoretically possible. It is argued, however, that tax competition must occur under empirically reasonable conditions. Inefficiency in public production is also explicitly modeled. The amount of capital used to produce a given level of public service output is shown to be greater than that which is required to minimize costs evaluated at the prices facing private firms.     

A quantitative view on policymakers’ goal,institutions and tax evasion

We develop a general theoretical model to compare two different policymakers both facing tax evasion. Policymakers differs in that they aim to maximize either the fiscal revenues ( $T$ ) as in a social-democracy as, e.g., Sweden, or the GDP as in a capitalistic country as, e.g., the USA. Both Bureaus can manoeuvre the tax rate and the share of tax receipts spent to fight the tax evasion rather than to increase the public capital. Our model merges the indications of two distinct, and sometimes conflicting, approaches to the analysis of tax evasion in that reconciling them. We also find that the feedbacks between the private and public sector are linked to some Laffer-type relationships usually unexplored by the existing literature. As compared to capitalistic systems, then, our results show that social-democracies end up imposing higher tax rates and, possibly, more pervasive regulations. Consequently, they are likely to suffer from larger tax-evasion-to-GDP ratios. This notwithstanding, social-democracies spend relatively more to contrast tax dodgers. On the other hand, $T$ -maximizing governments have better institutional settings and greater employment rates. Whichever the preferred target, however, no policymaker is able to erase totally the tax evasion, which may explain why this latter is so pervasive and persistent even among the richest countries.     

Taxes, Federal Grants, Local Public Spending, and Growth

In a dynamic model with both private and local public capital accumulation, this paper examines how federal and local income taxes, local consumption tax, and federal matching grants for local public consumption and local public investment affect the long-run equilibrium (equilibria) of private consumption, private capital accumulation, local public consumption, and local public capital stock.     

The Revenue Adequacy of Site Value Taxation in a Ricardian System of Economic Growth

A bstract . The federal administration has sought to reduce the growth of federal expenditures by shifting some government costs to state and local governments. An increased expenditure burden for the latter governments would require increased tax rates for existing types of taxes that have adverse impacts on economic incentives. Land taxes are considered as a source of revenue because of their efficiency aspects. Unfortunately this idea is all too often dismissed because of alleged revenue inadequacy. Thus an analysis is called for of the revenue adequacy of site value taxation in a Ricardian model of economic growth. The model allows analysis of revenue adequacy over time in an economic growth context that is suited for the long range tax-expenditure planning horizon with which local governments are faced. When revenue needs are primarily dependent upon the population size, and the fisc is initially operating at a deficit, for a land tax to permit attainment of balance, per capita rents must be increasing over time. Also when the economy's public service demand is primarily dependent upon income, deficits will not occur if rental share exceeds the share of income devoted to public output. Not all income goes to fiscal output, so rent eventually exceeds expenditures.     

Rights and judicial independence

This paper models endogenous judicial independence (JI) as a commitment device in a political commitment game between a ruler and citizens. In a situation where citizens can observe the effectiveness of JI with some positive probability, the model shows that the ruler in fact creates an independent judiciary and credibly commits to an announced tax rate, i.e., the ruler protects private property rights. Even when citizens have no chance to observe the effectiveness of JI, the ruler can still guarantee property rights by granting human rights as a signal of JI. Although the creation of JI achieves a Pareto improvement compared with its lack, two sources of inefficiency arise. First, the equilibrium tax is inefficiently high in the sense that the tax rate is on the inefficient side of the Laffer curve. This inefficiently high tax reflects the cost of credible commitment. Second, equilibrium JI for guaranteeing human rights is inefficiently high in the sense that the ruler does not entirely use JI for credibly committing to a low tax. This inefficiently high JI represents the cost of credible signalling.