The political economy of implementing environmental taxes

This paper considers the problems that countries have encountered in three areas: technical design issues, the treatment of the distributional effects of environmental taxes arising as a result of intramarginal transfers, and defining the purpose of the tax. It concludes that it would have been possible to predict and often avoid many of the reasons for failure to successfully implement ecotaxes. The paper draws on work of the OECD Joint Sessions on Taxation and the Environment in looking at strategies for the successful implementation of environmental taxes.     

欧盟碳税工具环境治理成效及其启示

欧盟碳税工具具有抑制碳排放的作用,但唯有丹麦效果最佳。煤燃料碳排放的削减是丹麦减排的关键。丹麦对煤燃料征收高税,对企业、居民实施差别税率,以及自愿协议税收返还政策的减排激励效应明显。我国开征碳税应准确把握时机,在税费改革的基础上建立环境税制度体系。要淡化碳税"双重红利"效应,立足节能减排调控功能;实施差别征税、善待民生、重在激励的碳税政策。     

Long‐Term Effects of Fiscal Policy on the Size and Distribution of the Pie in the UK*

This paper provides a joint analysis of the output and distributional long‐term effects of various fiscal policies in the UK, using a vector autoregression (VAR) approach. Our findings suggest that the long‐term impact on GDP of increasing public spending and taxes is negative, and especially strong in the case of current expenditure. We also find significant distributional effects associated with fiscal policies, indicating that an increase in public spending reduces inequality while a rise in indirect taxes increases income inequality.     

Indirect Taxes on International Aviation*

There has recently been much discussion of the possible use of internationally coordinated indirect taxes, or equivalent charges, on international aviation, whether as a source of finance for development or as part of a response to heightened concerns with climate change. This paper considers the strengths and weaknesses of the leading candidate instruments of this kind. It argues that, on both policy and administration grounds, the case for increasing indirect taxes on international aviation is strong: the indirect tax burden on international aviation is very low, yet aviation contributes significantly to border-crossing environmental damage, is just as proper an object of taxation as any other commodity, and incipient tax competition is likely to result in these taxes being set at inefficiently low levels. But the form(s) in which such taxes are levied matters: a tax on aviation fuel would address the key border-crossing externalities most directly; a tax on final ticket values would have greater revenue potential, and perhaps some distributional advantage; departure/arrival taxes face the least legal obstacles, but are much blunter instruments. Optimal policy, it is shown, typically requires deploying both a fuel tax and a ticket tax, and the paper explores, both in principle and by simulation, the key considerations and trade-offs involved in designing a suitable indirect tax regime for international aviation.     

湖南水污染税的税制设计及征收效应的一般均衡分析

湖南省"两型社会"的深化建设、首批环境税的开征试点、湘江污染的重点治理等事件将湖南省水污染税改革推向了历史的舞台。借鉴国外水污染税开征经验,文章系统地设计了湖南省水污染税征收的基本框架,运用可计算一般均衡(CGE)模型模拟征收水污染税对宏观经济、产业结构、污染物减排等产生的影响。结果表明:开征水污染税宏观经济受损的长期影响要大于短期;对绝大部分行业都带来了不同程度的负面影响,其中短期合成材料制造业产出下降最大,而长期毛纺织和染整精加工业受损最大;然而征收水污染税减少重金属等污染物排放,氨氮、化学需氧量下降尤为显著。     

Removing Homeownership Bias in Taxation: The Distributional Effects of Including Net Imputed Rent in Taxable Income

The income tax systems of most countries entail a favourable treatment of homeownership, compared to rental‐occupied housing. Such ‘homeownership bias’ and its consequences for a wide range of economic outcomes have long been recognised in the economic literature. Although a removal of the homeownership bias is generally advocated on efficiency grounds, its distributional implications are often neglected, especially in a cross‐country perspective. In this paper, we aim to fill this gap by investigating the first‐order effects, in terms of distribution of income and work incentives, of removing the income tax provisions favouring homeownership. We consider six European countries – Belgium, Germany, Greece, Italy, the Netherlands and the UK – that exhibit important variation in terms of income tax treatment of homeowners. Using the multi‐country tax benefit model EUROMOD, we analyse the distributional consequences of including net imputed rent in the taxable income definition that applies in each country, together with the removal of existing special tax treatments of incomes or expenses related to the main residence; thus, we provide a measure of the homeownership bias. We implement three tax policy scenarios. In the first, imputed rent is included in the taxable income of homeowners, while at the same time existing mortgage interest tax relief schemes and taxation of cadastral incomes are abolished. In the two further revenue‐neutral scenarios, the additional tax revenue raised through the taxation of imputed rent is redistributed to taxpayers, through either a tax rate reduction or a tax exemption increase. The results show how including net imputed rent in the tax base might affect inequality in each of the countries considered. Housing taxation appears to be a promising avenue for raising additional revenues, or lightening taxation of labour, with no inequality‐increasing side effects.     

Tax Incidence in Madagascar: An Analysis Using Household Data

This article discusses tax incidence in Madagascar and askswho pays the taxes that finance government spending. Its mainconcern is to identify the progressivity of different taxeslevied in Madagascar, based on the consumption and income patternsfound in the 1994 Enquête Permanente auprès desMénages, a nationally representative survey. The resultssuggest that most taxes are progressive, meaning that wealthyhouseholds pay proportionately more of these taxes relativeto their expenditures than do poor households. Two notable exceptionsare taxes on kerosene and export duties on vanilla, both ofwhich are regressive. These results are consistent with thoseof a study of Ghana, the only other comparable research on taxincidence in Africa. That study found taxes on kerosene andcocoa exports to be the most regressive taxes in Ghana. Making firm policy recommendations for tax reform would requirean analysis of the economic efficiency and administrative efficacyof different taxes to complement this article's work on theirequity implications. Nevertheless, the results suggest thatthe movement away from trade taxes, especially export duties,and toward broadly based value added or income taxes would bemore equitable and more economically efficient. The only legitimateimpediment to such reforms in Madagascar is administrative,that is, the government's ability to collect different taxeseffectively. Although administrative efficiency may be a problemfor value added or income taxes, taxes on petroleum products(except kerosene) are highly progressive and provide a goodtax handle.     

A SIMPLER CONSUMPTION-BASED ALTERNATIVE TO THE INCOME TAX FOR SOCIALIST ECONOMIES IN TRANSITION

The tax systems of socialist economies in transition will distortresource allocation, create inequities, and cause administrativeheadaches if not reformed. These countries have weak tax administrations,lack experience with mass taxes based on voluntary compliance,and need to encourage domestic saving and foreign investment.This article suggests an alternative to the conventional incometax that is more suited to these conditions. Attempting to tax real economic income raises complicated timingissues (when to recognize income and allow deductions) and mayrequire complex adjustments for inflation. The simplified alternativetax (SAT) avoids these complications and provides a generalincentive for saving and investment less subject to abuse ordistortions than tax holidays and other tax gimmicks in voguein countries emerging from socialism. The key elements of the SAT are separate taxes on income fromlabor and capital, immediate deduction for all business expenditures,no deduction for interest, and no taxation of interest or dividends.(Interest could be treated as under an income tax, at some cost.)Although the marginal effective tax rate is zero, the governmentshares in extraordinary returns to investment. The article discussespotential problems (including distributional implications, taxlosses, and foreign tax credits) as well as advantages of theSAT.      

The Stability of Tax Elasticities over the Business Cycle in European Countries

We estimate short‐ and long‐run tax elasticities that capture the relationship between changes in national income and tax revenue. We show that the short‐run tax elasticity changes according to the business cycle. We estimate a two‐state Markov‐switching regression on a novel data set of tax policy reforms in 15 European countries from 1980 to 2013, showing that the elasticities during booms and recessions are statistically (and often economically) different. The elasticities of personal income taxes, corporate income taxes, indirect taxes and social contributions tend to be larger during recessions. Estimates of long‐run elasticities are in line with existing literature.     

Redistributive impact of indirect tax reforms: Greece, 1988–2002

This paper assesses the distributional impact of indirect taxes among Greek households between 1988 and 2002, a period that coincides with the introduction of significant reforms in the tax system due to EU membership. The highly differentiated indirect tax structure prevailing at the beginning of the period had distributional benefits over the more simplified 2002 tax structure. The overall inequality of the after‐tax welfare distribution has increased by 6–12½ per cent and changes in the indirect tax system seem to explain about half of this increase. The paper also applies a recent method of measuring the distributional impact of relative price changes caused by changes in tax rates of commodities (Newbery, 1995) and establishes that indirect tax reforms introduced since 1988 had an adverse impact on the distribution of purchasing power, which nevertheless seems to be very small.     

The “flat tax(es)”: principles and experience

This paper reviews experience with the ‘flat taxes’ that have been adopted in many countries in recent years. It stresses that they differ fundamentally, and that empirical evidence on their effects is very limited. This precludes simple generalization, but several lessons emerge: there is no sign of Laffer-type behavioral responses generating revenue increases from the tax cut elements of these reforms; their impact on compliance is theoretically ambiguous, but there is evidence for Russia that compliance did improve; the distributional effects of the flat taxes are not unambiguously regressive, and in some cases, they may have increased progressivity (including through the impact on compliance); adoption of the flat tax has not resolved common challenges in taxing capital income; and it may have strengthened, not weakened, the automatic stabilizers. A key reason for adoption of the flat tax seems to have been to signal a fundamental shift toward a market-oriented policy regime. Looking forward, as the value of the signal diminishes and familiar political economy forces reassert themselves, the question is not so much whether more countries will adopt a flat tax as whether those that have will move away from it.      

National Price Levels: Do Taxes Matter?

Utilizing a sample of 51 countries for which price leveldata for 1980 were available from stage IV of the ICP project,the paper examines the possible role of taxes in explaining thedeparture of national price levels from purchasing power parities.The results obtained in the paper suggest that the overall burdenof central government taxation, especially of indirect domestictaxes, raises the general price level. No such price effectsseem to be associated with the direct tax burden, supportingthe conventional view of their not being shifted forward. Theperhaps unexpected result, that import duties have no discernibleeffects on the price level, is consistent with earlier findings.Another unexpected result is that the burden of domestic indirecttaxation expresses itself in the prices of tradables, ratherthan of non-tradables. Furthermore, no evidence was found tosupport the view, that tax inflated prices are offset by reducedprices in the untaxed sector, as required for the price levelto be neutral with respect to taxation.     

Optimal Environmental Taxation with Capital Mobility*

Climate policy exemptions for energy‐intensive sectors are often justified with distributional concerns. One concern is that households employed in energy‐intensive sectors might be affected disproportionally because of (international) capital mobility. By assuming that workers cannot move freely between sectors, we can reproduce this concern: uniform climate policy causes more inequality between the sectors when capital is mobile than when it is not. However, we find that affected households can be relieved more effectively with sector‐specific labour taxes than with sector‐specific climate policy. The reason for this finding is that households benefit more directly from sector‐specific labour tax cuts than from climate policy exemptions. Keeping climate policy uniform across sectors has the added benefit of creating incentives for long‐term decarbonisation. In addition, we find that the differential effect of capital mobility depends on the government's degree of inequality aversion – redistribution is more expensive when capital is mobile.     

环境税率、双重红利与经济增长

本文构建了一个包含环境税、污染存量和预期寿命的世代交替模型,研究环境税对环境红利和经济发展红利的影响。基于新古典增长模型的研究表明,环境税能够实现双重红利(环境红利和经济发展红利),这契合“绿水青山就是金山银山”的绿色发展理念。从传导机制看,环境税通过负收入效应使得资本积累下降,同时,环境税通过健康效应使得预期寿命延长,这又使得资本积累增加。环境税通过影响资本积累,进而影响环境质量和经济发展。此外,环境税率上升使得用于环境治理的政府支出增加,这使得经济更容易产生环境红利。基于内生增长框架的分析表明,环境税有助于摆脱“环境贫困陷阱”,这为解释国家之间的收入差距提供了一个参考机制。数值模拟结果显示,在新古典增长框架和内生增长框架下,均存在最优的环境税率可以极大化人均产出和经济增长率。本文认为,合理的环境税率有助于推进减污降碳协同治理。     

Environmental regulation and the location of polluting industries

Does international tax competition in the environmental field lead to undesirably low levels of environmental regulation and to unacceptable disruptions of environmental quality? The paper tries to answer this question in a noncompetitive partial-equilibrium framework. There is one firm that wishes to establish a plant in one ofn countries. The paper shows that tax competition may lead to emission taxes that are either too low or too high. They may be so high that the investment is not undertaken, although this would be optimal if the countries cooperated. On the other end of the spectrum, a scenario in which taxes are driven to zero becomes possible if there are substantial transfrontier pollution effects.     

Attitudes towards Tax Levels: A Multi‐Tax Comparison*

We analyse Swedes' opinions about the levels of 11 different taxes to see which taxes people are most averse to and why. The most unpopular tax is the real estate tax, while the corporate tax is the least unpopular. We find a strong self‐interest effect in tax attitudes and that knowledge and education increase support for corrective taxes.     

Local tax rebates,corporate tax burdens,and firm migration: Evidence from China

Conflicts of interest between local governments and the central administration in China have yielded many local policies that only serve the interests of local governments. The policy of first levying and then rebating taxes is an example of how local governments eschew the national tax regulations to boost local economies rather than national interests. In 2001, the Chinese government announced the termination of local tax rebates, which had some expected outcomes. We find that local governments complied with the new tax policy even though it no longer allowed local governments to grant tax incentives. However, some companies found ways to avoid the greater tax burdens by moving their business registration locations to tax havens. We also find that firms controlled by local governments were less likely to change registration locations. Our study examines the national tax regulation in China and explores how tax rules influence company decisions. In addition, we show that non-tax incentives, such as local economic development, may also influence company decisions.     

A New Method for Estimating the Effects of Fuel Taxes: An Application to Thailand

This article proposes a new methodology for estimating the impactof fuel price and tax changes on the general price level andthe distribution of income and applies a model to Thailand usingdata for 1975–76 and 1981–82. Because the modelallows for pricing under international competition where taxincreases must be partially absorbed in reduced factor incomerather than always being passed on in higher consumer prices,the results are significantly different from those generatedby the more conventional cost-plus pricing rule. The inflationaryimpact of fuel tax changes is slight because of both the opennessof the economy and the low energy intensity of manufacturingand other production in Thailand. In contrast, taxes on importsengender price increases not only for imports but also for goodswhich substitute for imports. The model also indicates thatthe net effects of taxes on petroleum products (other than kerosene)are progressive in their distributional impact, relative toa tax on imports or consumption. A main policy conclusion ofthe study is that fuel taxes could be used to increase bothequity and allocative efficiency without inducing significantinflationary responses. It follows that in the current circumstancesof falling world oil prices, developing countries could generaterevenues needed for structural adjustment by increasing fueltaxes to maintain domestic petroleum price levels.     

影响纳税人税款支付意愿的个体因素研究

新修订的个人所得税法规定年所得12万元以上的纳税义务人,应在年度终了后3个月内到主管税务机关办理纳税申报。在此背景下,个人所得税稽查中如何选择税收稽查的重点人群是税收稽查部门面临的一个新课题。本文以公众价值观调查的数据为基础对纳税人的税款支付意愿进行了研究。结果表明性别、年龄及婚姻状况对税收道德有显著影响,而收入水平和接受教育的程度对公民的税收道德没有显著影响。     

A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee

If regulations are used to make cars and fuels cleaner, shouldgasoline taxes be used to manage demand for trips that pollute?Analysis of a well-composed program for Mexico City indicatesthat the emission reductions would cost 24 percent more if atax on gasoline was not introduced. A simple analytical framework is developed to analyze the useof abatement requirements to make cars cleaner, and a gasolinetax to economize on the use of cars. The two instruments shouldbe combined to mimic the incentives that would have been providedby an emissions fee. Thus, cleaner cars and fewer trips areanalogous to competing suppliers of emission reductions; theplanner should buy from both so that marginal costs are equal.Applying that rule, the marginal cost of emission reductionsis, simply, the gasoline tax rate divided by emissions per liter.