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.     

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.     

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.     

The direct incidence of corporate income tax on wages

A stylised model is provided to show how the direct effect of corporate income tax on wages can be identified in a bargaining framework using cross-company variation in tax liabilities, conditional on value added per employee. Using data on 55,082 companies located in nine European countries over the period 1996–2003, we estimate the long run elasticity of the wage bill with respect to taxation to be ?0.093. Evaluated at the mean, this implies that an exogenous rise of $1 in tax would reduce the wage bill by 49 cents. Only a weak evidence of a difference for multinational companies is found.     

Decomposable measures of income tax progressivity

A class of decomposable income tax progressivity indices is defined by using a family of generalized entropy measures. For demonstration, changes in income tax progressivity in the United States are studied over time.     

Search costs and corporate income tax competition

If a small cost applies for learning the corporate tax rules in different countries, this can completely eliminate tax competition. This modified version of the Diamond paradox and can also explain the empirically observed tax cuts cum base broadening.     

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.     

Hierarchical design and enforcement of income tax policies

A hierarchical model of tax compliance is studied in which the government selects a tax policy and then delegates the responsibility to collect taxes to the IRS. There is a fixed distribution of income in the economy. Individuals differ by their income, which is known niether to the government nor to the IRS. We completely characterize the solution to the IRS's revenue-maximizing problem. When taxpayers are risk neutral, the optimal auditing policy divides the reported incomes into at most three groups. We show that the government provides a smaller budget to the IRS than the IRS would wish.     

Notes and comments. Ricardo on income tax: a note

Despite the fact that Ricardo experienced Pitt's income taxpolicies, and that he regarded taxation as the most importantissue to which the principles of political economy should beapplied, he rarely referred to actual tax reforms. This paperindicates that Ricardo's system of economics cannot bring aboutany tax that is completely compatible with his main criteriafor taxation (distribution neutrality, price neutrality andminimum taxation) as well as certainty, convenience and thesecurity of property. This result may explain why Ricardo didnot say which type of taxation system the British governmentshould establish.     

Taxation of multiple greenhouse gases and the effects on income distribution: A case study of the Netherlands

Current economic instruments aimed at climate change mitigation focus on CO₂ emissions only, but the Kyoto Protocol refers to other greenhouse gases (GHG) as well as CO₂. These are CH₄, N₂O, HFCs, PFCs and SF₆. Taxation of multiple greenhouse gases improves the cost-effectiveness of climate change mitigation. It is not yet clear, however, what the effect is of multigas taxation on the distribution of the tax burden across income groups. This paper examines and compares distributional effects of a CO₂ tax and a comprehensive tax that covers all six GHG of the Kyoto Protocol. The study concentrates on the Netherlands in the year 2000. We established tax rates on the basis of marginal abatement cost curves and the Dutch policy target. The distributional effects have been determined by means of environmentally extended input−output analysis and data on consumer expenditures. Our results show that taxation of multiple GHG improves not only the cost-effectiveness of climate change mitigation, but also distributes the tax burden more equally across income groups as compared to a CO₂ tax. These findings are relevant for the debate on the role of non-CO₂ GHG in climate change mitigation.     

论新形式下的企业所得税纳税筹划

企业所得税在企业纳税活动中占有重要的地位，且具有很大的税收筹划空间，本文从“两税合并”的政策背景入手，分析了新形式下的企业所得税纳税筹划的新思路与方法，并提出了筹划工作过程中应注意的问题和改进建议。     

The effect of marginal tax rates on taxable income: a panel study of the 1988 tax flattening in Canada

Federal tax reform in 1988 flattened the Canadian personal income tax schedule, changing the marginal tax rates for many individuals. Using methods similar to those applied by Auten and Carroll [Rev. Econ. 81(4) (1999) 681] in the study of the effects of the 1986 U.S. Tax Reform Act, we estimate the responsiveness of income to changes in taxes to be substantially smaller in Canada. However we find evidence of a much higher response in self-employment income, in the labor income of seniors and from those with high incomes.     

The income distribution frontier and taxation of migrants

The output distribution frontier, which traces out the economy's output and income distribution options, is used to confirm and explain intuitively the Bhagwati—Hamada results on the taxation of migrants from LDCs by their native country. It is shown that freedom of migration without taxation may reduce the welfare of those who remain in the LDC, but that taxation and free migration can be superior for them to either prevention of migration or freedom of migration without taxation. An externalities argument shows why even migrants may benefit.     

The impact of the corporate income tax: evidence from state organizational form data

By taxing the income of corporate firms at a different rate than non-corporate firms, taxes can play an important role in a firm's choice of organizational form. The sensitivity of the organizational form decision to tax rates provides a key indicator of the distortion created by the corporate income tax. This paper uses new cross-sectional data on organizational form choices across states compiled in the Census of Retail Trade to estimate this sensitivity. The results document a significant impact of the relative taxation of corporate to personal income on the share of real economic activity that is done by corporations and that the impact is many times larger than has been found in the previous empirical literature based on time-series data. The results show little impact, however, on the actual operations of firms such as their labor intensity, wages and the like. They do indicate that firms are able to exploit the progressivity of the corporate income tax system by dividing into numerous firms.     

The effects of low income housing tax credit developments on neighborhoods

This paper evaluates the impacts of new housing developments funded with the Low Income Housing Tax Credit (LIHTC), the largest federal project based housing program in the U.S., on the neighborhoods in which they are built. A discontinuity in the formula determining the magnitude of tax credits as a function of neighborhood characteristics generates pseudo-random assignment in the number of low income housing units built in similar sets of census tracts. Tracts where projects are awarded 30% higher tax credits receive approximately six more low income housing units on a base of seven units per tract. These additional new low income developments cause homeowner turnover to rise, raise property values in declining areas and reduce incomes in gentrifying areas in neighborhoods near the 30th percentile of the income distribution. LIHTC units significantly crowd out nearby new rental construction in gentrifying areas but do not displace new construction in stable or declining areas.