Vertical externalities in cigarette taxation: Do tax revenues go up in smoke?

In federal systems, where tax bases are joint property, the tax policy of one level of government affects the tax base of the other. This paper examines the interdependence of US federal and state cigarette tax rates. Our results suggest that states may reduce their cigarette tax rate by as much as 48 cents per dollar increase in the federal tax rate. Thus, a federal tax hike may reduce the amount of generated state tax revenues both directly (the overall tax rate rises and the state tax base declines), and indirectly (the state tax rate declines).     

A Tale of Two Tax Jurisdictions:

ABSTRACT California's Proposition 13 and Massachusetts'Proposition 2½ attempted to shrink state and local tax burdens by reducing property taxes and limiting future tax growth. Both initially succeeded. However, following a brief lag, those governments made up lost revenues primarily through increased non-tax fees and charges; within a decade, real per capita revenues and expenditures exceeded their pre-tax revolt peaks. This development is consistent with the hypothesis that voter-initiated limits on a subset of revenue sources, intended to reduce state and local tax burdens, succeed temporarily but are then undermined by expansions in other revenue sources.     

The Effectiveness of Tax-Expenditure Limitations: A Re-evaluation

A bstract . A 1982 study of the efficacy and impact of tax and expenditure limitations (TEL) is updated. Utilizing various statistical comparisons, growth in expenditures and revenues in states with TELs is compared to growth in states without a TEL in place. This comparison matches growth in the pre tax revolt years with growth in the post revolt years. In all cases the statistical tests show that the existence of a TEL has had virtually no impact on the growth of statewide expenditures or revenues. Additionally, while aggregate state expenditures and revenues exhibited some decline during the tax revolt years, this decline was short-lived and has since been reversed. Thus, the primary implication is that TELs as presently construed are an ineffective means of limiting growth in state budgets     

Environmental taxes,reforms and economic growth: an empirical analysis of panel data

This paper explores the relationship between environmentally related taxes and the economic growth rate. The analysis also investigates whether this relationship differs between countries that have implemented environmental tax reforms (ETRs) and those that have not. Using panel data from 31 OECD countries over the period 1994–2013, the paper finds that when we allow environmentally related tax revenues to interact with an initial level of real GDP per capita, the overall revenues of these taxes are negatively associated with the economic growth rate in the short and long term. Furthermore, we show that the higher the initial level of GDP per capita, the more environmentally related tax revenues can promote the economic growth rate. The analysis also reveals that the relationship between environmentally related tax revenues and economic growth varies between countries that have a mechanism to redistribute environmentally related tax revenues and those that do not.     

Abatement R&D,market imperfections,and environmental policy in an endogenous growth model

We develop an endogenous growth model featuring environmental externalities, abatement R&D, and market imperfections. We compare the economic performances under three distinct regimes that encompass public abatement, private abatement without tax recycling, and private abatement with tax recycling. It is found that the benefit arising from private abatement will be larger if the degree of the firms’ monopoly power is greater. With a reasonably high degree of monopoly power, a mixed abatement policy by which the government recycles environmental tax revenues to subsidize the private abatement R&D is a plausible way of reaching the highest growth rate and welfare.     

Do Casinos Cause Economic Growth?

A bstract .   Casino gambling is a popular form of entertainment and is purported to have positive effects on host economies. The industry surely affects local labor markets and tax revenues. However, there has been little evidence on the effects of casino gambling on state economic growth. This paper examines that relationship using Granger-causality analysis modified for use with panel data. Our results indicate that there is no Granger-causal relationship between real casino revenues and real per capita income at the state level. The results are based on annual data from 1991 to 2005. These findings contradict an earlier study that found that casino revenues Granger-cause economic growth, using quarterly data from 1991 to 1996. Possible explanations for the differences in short- and long-run effects are discussed.     

Estimating cigarette-tax revenue

This paper presents a cigarette-tax revenue model which predicts potential tax revenues. The model is unique in that revenues are estimated in a two-stage process which is invariant to the type of state sales/excise tax regime. The model also controls for cross-state spillover effects. The empirical model was estimated using data from Alabama and surrounding states from 1955 to 1990. The results suggest the demand for cigarettes in Alabama is relatively inelastic; spillover effects are found but are small in scale; and additional revenue potentials can be realized by changes in the tax regime.     

Who offers tax-based business development incentives?

Many American communities seek to attract or retain businesses with tax abatements, tax credits, or tax increment financing of infrastructure projects (TIFs). The evidence for 1999 indicates that communities are most likely to offer one or more of these business development incentives if their residents have low incomes, if they are located close to state borders, and if their states have troubled political cultures. Ten percent greater median household income is associated with a 3.2% lower probability of offering incentives; 10% greater distance from a state border is associated with a 1.0% lower probability of offering incentives; and a 10% higher rate at which government officials are convicted of federal corruption crimes is associated with a 1.2% greater probability of offering business incentives. TIFs are the preferred incentive of communities whose residents have household incomes between $25,000 and $75,000; whereas TIFs are much less commonly offered by communities whose residents have household incomes below $25,000. The need to finance TIFs out of incremental tax revenues may make it infeasible for many of the poorest of communities to use TIFs for local business development.     

Experiencing Change in German Controlling – Management Accounting in a Globalized World

Abstract

In this study, I consider the effects of tax risk from tax volatility on the pricing of syndicated debt. Tax volatility is an interesting feature in that managers have some discretion over the risks they take with their tax strategies, which, however, are often harder to monitor for outsiders than risks related to other business activities. Framing my predictions based on the theoretical model developed by Merton [1974], I hypothesize and find that tax volatility is incrementally informative to other priced risks suggesting that tax risks per se are relevant to lenders. Moreover, I find that the results are stronger when the loan contract does not include performance pricing provisions or other restrictions, such as capital expenditure covenants, that protect lenders. This evidence adds to knowledge about the real effects of tax risk.     

Federal deductibility and local property tax rates

Recent econometric work has suggested that federal deductibility of state and local taxes has raised the proportion of these taxes—especially property taxes—in local budgets. This paper lends additional support to these earlier findings by showing that one channel through which deductibility leads to higher local property tax revenues is by increasing the rate of local property taxation. Specifically, we find that if deductibility were eliminated, the mean property tax rate in our sample would fall by 0.00715 ($7.15 per $1000 of assessed property), or 21.1% of the mean tax rate.     

Reducing tax receipt volatility in a developing country

This paper reports on a study that examines how tax revenue instability can be minimized by a developing country. The empirical analysis employed in the study identifies a combination of taxes that can be used to obtain both an acceptable rate of growth and the minimum variability of receipts for that rate of growth in revenues. An analysis of empirical results demonstrates how a government can have a growing, but relatively stable tax structure.     

完善电子商务活动税收征管的对策探讨

电子商务已在我国得到广泛推广与应用,对此,研究相应的税收征管对策,建立符合电子商务特点的税收制度,不仅有助于保护电子商务用户的合法权益,促进电子商务的正常发展,而且可以使我国分享网络发展资源,减少电子商务相关税收收入的流失而造成的国家财政收入损失,从而保证经济稳健发展。     

Long-run growth and welfare effects of public policies with distortionary taxation

In a one-sector growth model with infrastructure investment, we study the impact of fiscal policies on growth. The government collects taxes on labor income and profits. The government uses these revenues to purchase infrastructure investment, provide utility enhancing government services, and to provide transfer payments to the households. We show that the balanced growth rate is an increasing function of the percent of government revenues that goes to infrastructure. We find that the growth maximizing mix of taxes depends on the elasticity of substitution between inputs. In particular, with distortionary taxes, the growth maximizing tax rate on capital is higher the lower the elasticity of substitution between private physical capital and public capital. In addition, the growth maximizing size of the government is higher when the elasticity of substitution between public and private inputs is low. We also investigate welfare effects of other public expenditures as well. Depending on the elasticity of substitution in production, the welfare implications of different public policies can be substantial.     

Transaction taxes, greed and risk aversion in an agent-based financial market model

Recent agent-based financial market models came to the result that taxing financial transactions does not per se increase financial stability and that the response of volatility and misalignments to rising tax rates seem to be u-shaped. Moreover, greed and the risk appetite of traders are often blamed for financial instability and there is no evidence how greed and risk aversion affect the effectiveness of regulations in financial markets. We aim to add to this gap in the literature by analyzing how the effectiveness of transaction taxes depend on different behavioral patterns within an agent-based framework. Our simulations indicate that a tax rate of 0.1% demarcates the stabilizing tax regime from the destabilizing one. We figure out that transaction taxes are less effective, either when chartists trade more aggressively, fundamentalists trade less aggressively, agents switch more frequently between trading strategies or only have short memory in their fitness measures. Lower risk aversion of agents, however, makes higher tax rates more effective as indicated by a flatter volatility response curve. We conclude that additional regulations should concentrate on the traders’ responsibilities for their risk-exposure.     

Property taxes and property values: evidence from Proposition

We examine the effect of Proposition  on revenues and housing prices in Massachusetts. Communities that were initially constrained by the law saw large increases in state aid and the use of fees. We use these initial constraints as instruments for changes in other components of revenue while treating the change in the property tax as exogenously determined by Proposition  . Our results strongly suggest that communities that were able to increase their property taxes more rapidly saw greater increases in their housing values in the period following passage of the law.     

Theoretical analysis and empirical measurements of the effects of the Philadelphia income tax

This study develops policy-oriented measures of optimal local taxes and their maxima which take into account the existence of macro multipliers, other taxes, and discounting. It also presents an estimate of the effects of the Philadelphia income tax on employment tax and revenues. An upper bound for the optimal tax rate is suggested. The current tax rate is found to perhaps be above both the optimal and the revenue maximizing (or monopoly) point.     

UK Forecast in detail

On the face of it, recent public sector net borrowing numbers suggest that the Government's deficit reduction ambitions are stalling, with borrowing higher than last year despite a more favourable economic backdrop. But the underlying picture is less gloomy, with the recent disappointing numbers largely due to the comparison with the early part of fiscal year 2013–14, when revenues had been temporarily boosted by receipts from the Swiss Capital Tax and by high earners deferring income from the previous tax year to take advantage of the reduction in the top rate of income tax…     

Fiscal Policy and Economic Growth

This paper surveys the literature on fiscal policy and economic growth. We present a unifying framework for the analysis of long run growth implications of government expenditures and revenues. We find that several tax rates and expenditure categories exhibit a direct impact on the growth rate of the economy. In a creative synthesis we have assigned the relevant literature to the twelve introduced policy variables. Due to the equivalence of some policy variables we are left with six degrees of freedom, where we need four to internalize the model's intrinsic externalities, leaving two instruments to conduct short run fiscal policy.     

Tax aggressiveness and idiosyncratic volatility

This study finds that aggressive tax strategies adopted by a firm affect idiosyncratic stock return volatility. Aggressive tax strategies, which I measure as tax paid by a firm divided by pretax income (adjusted for special items), are associated with higher levels of idiosyncratic stock volatility. Uncertainty associated with tax strategies may result due to several factors, such as penalties, fines, and additional tax payments if particular tax strategies are disallowed by taxation authorities, or if there are changes in tax rules. Such uncertainty affects the future cash flows of a firm and is reflected in more volatile stock returns. Financial constraints, corporate governance mechanisms, and information environments surrounding a firm influence the relation between idiosyncratic volatility and effective tax rates.     

Are PILOTs property taxes for nonprofits?

Nonprofit charitable organizations are exempt from most taxes, including local property taxes, but U.S. cities and towns increasingly request that nonprofits make payments in lieu of taxes (known as PILOTs). Strictly speaking, PILOTs are voluntary, though nonprofits may feel pressure to make them, particularly in high-tax communities. Evidence from Massachusetts indicates that PILOT rates, measured as ratios of payments to the value of local tax-exempt property, are higher in towns with higher property tax rates: a one percentage point higher property tax rate is associated with a 0.2 percentage point higher PILOT rate. PILOTs appear to discourage nonprofit activity: a one percentage point higher PILOT rate is associated with 0.8% lower real property ownership by local nonprofits, 0.2% lower total assets, and 0.2% lower revenues of local nonprofits. These patterns are consistent with voluntary PILOTs acting in a manner similar to low-rate, compulsory real estate taxes.