Welfare criteria for tax reforms: Efficiency aspects

This paper provides unexpected support to Nash's view of how bargaining determines the social choice. We first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters' preferences and their choice probabilities. The outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a Nash-type social welfare function (theorem 1). This electoral outcome is also interpreted as a unanimity likelihood maximum (corollary 1). Within our framework, existence and uniqueness of such an outcome are guaranteed (corollaries 2 and 3).     

Anticorruption reforms,tax evasion,and the role of harassment

We examine the impact of anticorruption reforms on tax evasion when corruption and potentially harassment are endemic among tax auditors. We find that the threat of harassment may counterintuitively boost the impact of such anticorruption reforms on tax evasion and also eliminate corruption. Specifically, a moderate anticorruption policy can discontinuously reduce tax evasion to a level even below that under no corruption. Further strengthening of such policy can nonetheless prove counterproductive and increase tax evasion. On the contrary, in the absence of harassment, a moderate anticorruption reform induces higher tax evasion and sustenance of bribery. In this case, only a large reform can reduce tax evasion and eliminate corruption.     

The impact of tax reforms on unemployment in a SMOPEC

This paper analyzes revenue-neutral tax reforms for a small open economy which is constrained to a balanced current account and whose producers have market power on the world market. We consider origin-based and destination-based commodity taxes as well as taxes on income, the payroll, and on an imported factor of production. Our main findings are the following. First, the strength, and for some parameter constellations, even the sign of the employment effect of tax reforms varies with the degree of openness of the economy. Second, the indeterminacy of the sign of the employment effect crucially hinges on the presence of an internationally mobile factor. The central mechanism underlying our results are adjustments of the real exchange rate which have repercussions on wage and price setting and therefore on employment.     

Assessing tax reforms through the elasticity of reported income: an empirical analysis for Spain

This paper demonstrates the usefulness of the elasticity of reported income to assess tax reforms from the perspectives of tax revenue and well-being. Employing different identification strategies, evidence is provided of the value of the elasticity of gross reported income in Spain and, based on this elasticity, a detailed assessment is made of the impact of the increase in marginal tax rates which the Spanish government approved in 2012. We use microdata from the Taxpayers Panel of the Institute for Fiscal Studies. The mean value of this elasticity for Spain is 0,363 with considerable heterogeneity depending on taxpayers’ characteristics.     

Experimental evidence on tax salience and tax incidence

Although a basic theoretical principle in public economics assumes that individuals optimize fully with respect to the introduction of a tax, a growing body of research is proving that several heuristics are in place when people take decisions. We re‐examine the well known liability side equivalence principle in the light of the concept of salience. While these two topics have been extensively investigated in isolation, this paper innovates on the previous literature in that it focuses on their joint effects. Is tax incidence dependent on whether the subjects face a salient rather than a nonsalient tax? Does the salience of a tax exert a different effect depending on who is legally committed to bear the tax burden? We address these questions through a laboratory experiment in which one unit of a fictitious good is being traded through a double‐auction market institution. Based on a panel data analysis, our contribution shows that point of collection matters and determines the economic incidence of tax. Additionally, we find that the joint effect of salience and statutory incidence does not alter the informative efficiency, but has a positive effect on buyers’ allocational efficiency when the tax is levied on sellers.     

Democratic institutions and regulatory reforms

We use a sample of 144 countries over the period 2003–2013 to investigate the link between democratic institutions and regulatory reforms. Democracy may be conducive to reform, as politicians embrace growth-enhancing reforms to win elections. On the other hand, authoritarian regimes may not worry as much about public opinion and could undertake reforms that are painful in the short run but bring long-term benefits. We test these alternative hypotheses, using data on regulatory reforms from the World Bank’s Doing Business database. The results provide mixed support for the hypothesis that democracy is good for regulatory reforms. We also show that regulatory reforms are more likely just after parliamentary elections in poor and middle-income countries.     

Land reforms and population growth

One of the greatest puzzles in demographic history is why in the rich and urbanized England, fertility declined much later than in the poor and rural France. We consider the effects of a land reform on demographic growth by a family-optimization model where relative per capita wealth generates social status and welfare. We show that tenant farming is the major obstacle to escaping the Malthusian trap with high fertility and low productivity. A land reform provides peasants with higher returns for their investments, inducing them to increase their productivity and status rather than their family size. Consequently, the population growth rate slows down, but the productivity of land increases.     

International capital tax evasion and the foreign tax credit puzzle

In this paper we examine how the presence of international tax evasion affects the choice of a foreign tax credit by a capital exporting region. Since the credit raises the opportunity cost of concealing foreign source income, it can be employed to discourage evasion activity. International tax evasion can thus help to rationalize the adoption of a tax credit in excess of a deduction-equivalent rate. JEL Classification: H21, H26
Evasion fiscale pour le capital international et le problème du crédit d'impôt pour le fardeau fiscal à l'étranger. Ce mémoire examine comment la présence d'évasion fiscale pour le capital international affecte le choix du crédit d'impôt pour le fardeau fiscal à l'étranger par une région qui exporte du capital. Puisque le crédit d'impôt accroît le coût d'opportunité du camouflage de la source étrangère de revenus, c'est une technique qui peut être employée pour décourager l'évasion fiscale. Voilà qui peut expliquer qu'on adopte un crédit d'impôt qui est plus généreux que ce qui constituerait la déduction dans un système où le fardeau fiscal à l'étranger est simplement déduit du revenu imposable.     

The effects of tax reform on labor supply, tax revenue and welfare when tax avoidance matters

We examine how tax avoidance in the form of trade in well-functioning asset markets affects the study of labor supply. We discuss the implications for tax policy analysis, and we show that a failure to account for avoidance responses may lead to huge errors when analyzing how tax reform affects labor supply, tax revenue and the welfare cost of taxation. Our model may explain a number of otherwise hard to understand dimensions of taxpayer response.     

个税免征额、税率与拉弗曲线

本文基于个人所得税改革对经济主体行为产生激励的理论,尝试将个税免征额引入拉弗曲线(Laffer curve),分析了收入变化时收入税率曲线位置的移动与拉弗曲线的形态变化,以及个税免征额与最优税率之间的运动规律,发现随着个税免征额的提高,最优税率有下降的趋势,对我国当前个税免征额的提高与税率级次级距调整现象做出了较严密的数理分析。而在分析个税免征额的选择及其与税率之间的关系时,为我们找到在当前地区收入水平不均与居民收入分布多样的状况下的最优个税免征额以及实践差别化税制的理论依据,回答了原来仅考虑税率变化的拉弗曲线所不能回答的问题。     

Agglomeration and tax competition

Tax competition may be different in ‘new economic geography settings’ compared to standard tax competition models. If the mobile factor is completely agglomerated in one region, it earns an agglomeration rent which can be taxed. Closer integration first results in a ‘race to the top’ in taxes before leading to a ‘race to the bottom’. We reexamine these issues in a model that produces stable equilibria with partial agglomeration in addition to the core-periphery equilibria. A bell-shaped tax differential also arises in our model. Therefore, the ‘race to the top’ result generalises to a framework with partial agglomeration.     

Development through synergistic reforms

For many less developed countries production of high quality output is a precondition for firms to become exporters. Institutional deficiencies that raise costs of high quality production therefore limit the positive impact that trade facilitation can have on income. Consequently, institutional reforms that reduce costs of high quality production and trade reform have synergistic effects. In contrast, institutional reforms that reduce costs of low quality production (e.g., reforms that disproportionately benefit small businesses) interfere with the impact of trade reform. We obtain these results in a heterogeneous firm model that displays standard “industry rationalization” responses to reduced trade costs.     

中国邮改背后的利益战场

专营权的界定以及建立普遍服务补偿机制,关系到邮政企业的生死存亡,此乃邮政改革的各方利益交点所在。     

Estimating tax noncompliance with evidence from unaudited tax returns

This article estimates the degree of tax noncompliance using evidence from unaudited tax returns. Measurements of noncompliance are derived from the relationship between reported charitable contributions and reported income from wages and salary as compared to alternative reported income sources such as self-employment, farm and other small business income. Assuming that the source of one's income is unrelated to one's charitable inclinations and that the ratio of true income to taxable income does not vary by income source, any difference in the relationship between charitable contributions and the source of income can be attributed to (relative) underreporting by the individual. We find that the implied amount of noncompliance is significant and that it varies by source of income, as well as between positive and negative values of each type of income.     

Tax reforms and the growth of government

This paper analyzes alternative approaches to measuring the effects of structural tax changes on government growth. It first reviews traditional time series approaches that attempt to disentangle the causal relationships between taxes and spending. It explains why these methods are incapable of uncovering the true causal links because of problems of observational equivalence and why institutional data can assist in making this determination. It then presents the methods and results from two alternative approaches and studies that analyze the effects of changes in tax structures on government growth. Both methods rely on econometric and institutional analysis. First version received: November 1997/Final version received: February 1999     

企业统计制度改革的误区及其思考

企业统计是企业统计人员收集、汇总企业生产经营过程中的有关数据和情报,进行整理之后提供给各级领导,使领导掌握企业的生产和经营的具体情况,作为下步的调度和决策依据。本文主要分析目前我国企业在统计制度改革过程中存在的一些误区,提出自己的建议。     

The Damoclean tax and innovation

The paper presents a novel tax that is designed to improve the performance of research and development (R&D) investments. Ideally, the tax allows the technical efficiencies of monopoly while bringing about the desirable effects of the competitive pressure of R&D rivalry. Thus, with the tax, the state can sanction a monopoly of R&D investment in order to attain technical efficiencies and yet avoid the underinvestment in R&D that would result without competitive pressures. A critique of the tax emphasizes the problems of implementing it and offers a more practical alternative that would achieve the same desirable effects.     

Poverty alleviation and tax policy

This paper examines public good provision and tax policy—optimal non-linear income taxation and linear commodity taxation—when the government departs from purely welfarist objective function and seeks to minimise poverty. This assumption reflects much policy discussion and may help understand some divergences of practical tax policy from lessons in optimal tax analysis. In contrast to Atkinson and Stiglitz (J. Public Econom. 6 (1976) 55), it may be optimal to use differentiated commodity tax rates, including the taxation of savings, even if preferences are separable in goods and leisure. The optimal effective marginal tax rate at the bottom of the distribution may be negative, suggesting that wage subsidy schemes can be optimal. Finally, optimal provision of a public good is analysed under poverty minimisation.