The uniform enterprise income tax reform in China

In China, the income tax of enterprise is very different between foreign funded enterprises and other domestic enterprises. It is believed that this discrimination is harmful to the entire economy. So there is a reform in the tax system to build a uniform enterprise income tax. This is a significant reform in China＇s tax system, so every decision about this have to count the cost and the benefit carefully. The author has introduced the Computable General Equilibrium （CGE） to simulate this new tax system and value its benefit and cost. There are two different models in the paper; they are of different assumptions and for different purposes. Model I is a static CGE model and model II is a Ramsey Dynamic model. The static model is mainly used for comparative static approach to examine how the tax reform will change the endogenous variables. According to the results of the model, more goods will be produced by both of the DFEs and FIEs after the tax reform in the medium and low tax effective tax rate situations. If the nominal tax rates decrease 24.24% （from 33% to 25%）, the enterprise income tax will only reduce 19.36% and the total tax revenue will only reduce 1.911%. The dynamic model will concentrate on the costs and benefits during the transition. From the results of the model, a lower tax rate will increase the level of investment, capital stock, capital prices, wage rate and also the growth rates through transition. If the capital tax rates are changed gradually, the fluctuating of transition will be smoothed a little.     

The distribution of abilities and the progressive income tax

This paper develops a model of endogenous labor supply, where agents are uncertain about their future wages. Assuming risk aversion, some redistributive taxation is thus warranted. It is shown that, for a particular parameterization of the tax system, an optimally progressive income tax exists. Comparative ststics analysis demonstrates how this tax system is effected by changes in the wage distribution. The paper ends with a discussion of whether an optimally progressive income tax can be politically sustained. It is shown that generally this is not the case in a political system with majority voting.     

The impact of the Indonesian income tax reform: A CGE analysis

This study evaluates the impacts of Indonesia's recent income tax reforms on key macroeconomic variables, as well as the impacts on poverty and income distribution. It was found that the reductions in personal income tax and corporate income tax increase economic growth under a balanced budget assumption. The policy reforms also lead to a small reduction in the incidence of poverty. However, the policies also lead to an increase in income inequality because the tax cut is more beneficial to households in the highest income categories. It is recommended that future tax cuts should target the urban and rural poor.     

German income tax reform. A simulation model

An independent commission on tax reforms and the Federal Ministry of Finance had been working for some time on basic changes of the German tax system. Their suggestions recently have been published (Bericht, 1971) just as many other proposals for tax reform from various experts, organizations, and political parties. Yet, compared with the Report (1966) of the Royal Commission on Taxation of Canada (Carter Commission) the German reform plans are less comprehensive and fundamental than the thorough economic analysis in the six volumes of the Carter Report.     

Tax progressivity, income distribution and tax non-compliance

This article examines the determinants of tax non-compliance when we recognise the existence of an imperfectly competitive “tax advice” industry supplying schemes which help taxpayers reduce their tax liability. We apply a traditional industrial organisation framework to model the behaviour of this industry. This tells us that an important factor determining the equilibrium price and hence, the level of non-compliance, is the convexity of the demand schedule. We show that in this context, this convexity is affected by the distribution of pre-tax income, the progressivity of the tax-schedule and the way in which monitoring and penalties vary with income. It is shown that lower pre-tax income inequality as well as a less progressive tax code may cause more tax minimisation activities. Therefore, the frequently advocated policy of reducing the highest tax rate may fail as a policy directed at improving tax discipline. One way of offsetting the possible harm to tax compliance from a less progressive tax could be an adjustment of the penalty and monitoring functions.     

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。     

Evaluating social welfare and redistributive effects of Spanish personal income tax reform

Spain has recently concluded a process of wide-ranging reform of its personal income tax (IRPF), in force since 1992. The new IRPF is applicable from 1999 onward. The aim of this article is to analyse the implications of this tax reform for the distribution of personal income, and additionally to provide a comparative evaluation in terms of social welfare of both taxes. Empirical analysis is performed by a simulation exercise, employing the microdata contained in the Institute of Fiscal Studies’?IRPF Panel of Taxpayers. The analysis shows that the new IRPF induces a redistributive effect slightly lower than the old IRPF. The greater redistributive potential of the progressive structure of the new tax proves to be insufficient to compensate for the contrary effect caused by reduction in the level of tax liability. However, this new tax unambigously permits, in an inequality-adverse society, a higher level of social welfare than that attained by the old tax.     

The optimal linear income tax revisited

This paper shows that the Mirrlees-Seade conditions of agent monotonicity and noninferiority of leisure imply the positivity of the optimal marginal income tax rate in Sheshinski's model of linear income taxation as well as in the general model. The optimal marginal tax rate is bounded above by the Rawlsian rate, which in turn is bounded by the revenue-maximizing rate. The optimal marginal tax rate may be arbitrarily close to the Rawlsian rate. However, the optimal marginal tax rate is bounded away from the revenue-maximizing rate whenever the individual with the lowest ability works.     

The optimal linear income tax: A diagrammatic analysis

This paper clarifies the role of the tax possibility frontier and the social indifference curve in the comparative statics analysis of the optimal linear income tax. By a mostly diagrammatic derivation of the results we confirm the conventional conjecture that the optimal marginal tax rate increases with the government's inequality aversion. On the other hand, we cannot always confirm analytically the conventional conjecture that the optimal marginal tax rate increases with the government's budgetary needs.     

Consumption tax revenue and personal income tax: analytical elasticities under non-standard tax structures

This article models the elasticity of consumption taxation faced with changes in disposable income. Its calculation makes clear the importance of the design of the personal income tax and of the changes caused to the consumption of taxpayers. The modelling is performed for both individual taxpayers and the population as a whole.     

The optimal linear income tax with tax credits contingent on fertility

The literature on the optimal linear income tax is extended by incorporating tax credits contingent on the number of dependents the taxpayer is responsible for. The choice over how many dependents to be responsible for is made endogenous by allowing taxpayers a choice over their own fertility. Formulae are derived governing the government's optimal choice of the labor income tax rate and the tax credit contingent on fertility. It is also shown that if the government chooses its policy based on the belief that fertility behavior is exogenous when it is actually endogenous, then a suboptimal policy will be chosen. If certain conditions are fulfilled the government will choose a labor income tax rate lower than that which is actually optimal.     

Separating small and big fish: The case of income tax evasion

This paper proposes to offer the taxpayer a choice of tax-enforcement schemes for self-selection. More specifically, the taxpayer should have the possibility of opting for the prevailing regime with a certain penalty on the evaded tax or for an alternative regime with a higher penalty on the evaded tax but a reduced tax rate. It is shown that this leads to a separation of taxpayers characterized by a relatively high degree of evasion (H-evaders) from taxpayers who evade only a relatively small amount of tax (L-evaders). Furthermore, the procedure is not self-defeating, it is effectively possible to direct the efforts of auditing towards the H-evaders. At the end of the game the L-evaders experience a welfare gain, the H-evaders are induced to reduce their evasion activities and the government can expect higher yields.We wish to thank Johann K. Brunner and two anonymous referees for many helpful comments.     

Estate tax and lifetime income inequality

This paper constructs a heterogeneous, intertemporal general equilibrium framework which integrates both intended and unintended bequest motives to examine the long-run effects of an estate tax on the inequality of lifetime income. The results are ambiguous in general and sensitive to the type of transfer motive involved. We find that in the purely intended bequest case, an estate tax increases the steady-state inequality of net lifetime income in the case where people's elasticity of intertemporal substitution is greater than one. However, in the purely unintended bequest case, the effect of an estate tax on inequality is dependent on the probability of survival.     

The corporate income tax in an open economy

The paper begins with a brief review of the distortion literature, stressing its relation to the general equilibrium consequences of the corporate income tax. The consequences for international trade of the distortions associated with the tax are then examined, and among other things it is found that trade could reduce welfare. Finally, the implications of trade for the incidence question are examined, and it is shown that whether labor or capital bears the burden of the tax depends entirely on whether the tax is imposed in the labor-intensive or the capital-intensive industry.     

Micro and macroeconomics of tax reform: Indonesia

Indonesia enacted reforms in taxation in 1983. The new laws replace outdated, complicated and unproductive taxes adopted several decades earlier. A complete overhaul of the tax system was required. Use of higher tax rates or other forms of tinkering with the old system were not options under the circumstances. Reform studies began in early 1981. They were strongly focused on base broadening and drastic simplification. While the original impetus for the reform was not fiscal crisis, the new system will be in place in time to supplant much of a projected decline in oil revenues. Other objectives of the reform were more effective income redistribution, simplification of taxation, a new tax information system and streamlining of tax administration. The Indonesian reform made eclectic use of the lessons from similar fiscal exercises in Asia, Africa and Latin America and of recent innovations in tax analysis elsewhere, but was tailored to national objectives and constraints. Prospects for fruitful implementation of the reform are as yet unknowable: one factor augering for some success is that the tax reform was introduced as one of a series of six major belt-tightening policy measures which gained a measure of public acceptance. None were imposed or required for external assistance. It is unclear which, if any, of the lessons derived from this tax reform are transferable elsewhere. However, among the lessons of possible relevance elsewhere is the importance of identifying at the outset those fiscal problems lying at the intersection of the sets of ‘complex’, ‘difficult’ and ‘politically sensitive’ issues. Of the dozens of issues faced in the process of reform in Indonesia, three such issues in this intersection accounted for more than half the intellectual and other resources expended on the reform.