Shareholder taxation and aggregate dividend payout: Evidence from the tax reform act of 1986

The effect of shareholder taxation on corporate dividend policy is a major controversy in financial economics. The Tax Reform Act of 1986 eliminated the statutory tax disadvantage of dividends versus long-term capital gains for individual shareholders. Using aggregate time series data I find evidence that corporate dividend payout has become more generous in the period after tax reform.     

The double dividend and the role of inequality aversion and macroeconomic regimes

The introduction of the European Community's carbon-energy tax in a small open economy is analyzed by comparing two kinds of revenue recycling. We use a dynamic general-equilibrium model with different regimes for the labor market, several income groups, and a crude valuation of environmental benefits. This allows for a more comprehensive empirical test of the double-dividend hypothesis, including equity aspects. It is shown that the weak double-dividend hypothesis can fail when equity aspects are taken into account.     

Assessing the international spillover effects of capital income taxation

Changes in capital taxes by one economy spill onto other economies with internationally mobile capital. We evaluate these impacts using a two-region, intertemporal general equilibrium model. The foreign economy's unilateral reduction in corporate income taxation has positive but small effects on U.S. welfare. In contrast, unilateral reductions in personal income taxation impose large negative spillovers. The differences result from CIT being source-based and PIT residence-based. The CIT cut reduces tax burdens to U.S. residents who invest abroad, while the PIT cut reduces foreigners' tax burdens only. Through general equilibrium adjustments neglected in simpler models, the PIT cut lowers U.S. residents' welfare.     

Environmental Tax Reform in a Small Open Economy With Structural Unemployment

The paper examines the effects of an environmental tax reform in a small open economy with decentralised wage bargaining, monopolistically competitive firms and equilibrium unemployment. There is a tradable and a non-tradable sector and all firms use labour as well as an imported polluting factor of production (energy). A key result is that a tax on energy, recycled to reduce the payroll tax, reduces unemployment if there is a tradable sector wage premium. However, even if energy taxes may boost employment, welfare will not necessarily improve. Numerical simulations suggest that energy taxes in general provide an environmental dividend but also reduce real GDP.     

International interest withholding taxation: Prospects for a common European policy

In 1989 the European Union member states rejected a proposal to introduce a minimum interest withholding tax of 15 percent. Some Union member states, however, remain keenly interested in bringing about some minimum level of international taxation of interest income. This suggests that member states will be asked to reconsider the issue in the near future. This paper first examines the effects of interest withholding taxes on financial markets. It then reviews some of the main aspects of potential tax reform in this area. A major challenge for any future proposal will be to satisfactorily integrate the banking system into a common interest withholding scheme.     

Globalisation,taxation and inequality

Today's tax systems, in which value-added taxes and payroll taxes play a prominent role, are largely creations of the 1950s. We need to invent modern tax systems adapted to the reality of the 21^st century: the growing importance of capital and the rise of inequality. This article reviews some of the challenges involved with increasing the progressivity of tax systems in a globalised world and discusses how these challenges could be overcome. I make the case for new and more ambitious forms of international cooperation and for modern forms of wealth taxation.     

Non-Homothetic Preferences and the Non-Environmental Effects of Environmental Taxes

We show that, if the utility function is non-homothetic, environmental taxes can have positive non-environmental effects. These effects are illustrated with specific reference to taxes on gasoline and tobacco, in the context of a computational model. We also clarify the relationship between the double dividend (associated with a marginal change from a tax system with low reliance on environmentally motivated taxes) and the situation in which the optimal environmental tax rate is greater than the Pigouvian tax rate. These two situations are generated by rather similar combinations of parameters.JEL Code: H21, H23, D58     

From Destination- to Origin-Based Consumption Taxation: A Dynamic CGE Analysis

A switch from the current destination-based value-added taxation to an origin-based consumption tax will not be neutral in a world economy with international capital mobility and overlapping generations. This paper evaluates the macroeconomic and welfare effects of such a multilateral reform in a two-region, intertemporal general equilibrium model. The analysis isolates and quantifies income effects due to changes in generations' tax burdens, factor price repercussions and initial asset price adjustments, as well as efficiency effects that arise from endogenous labor supply and short run savings responses in a numerical simulation exercise.     

Tax Reform and Employment in Europe

The purpose of this paper is to investigate to what extent modifications of tax systems between 1985 and 1992 within major parts of the European Union contributed to changes in the labour market. The principal countries under investigation are Germany, Italy, France and the United Kingdom, and the method of investigation is the numerical simulation of a multi-country general equilibrium model. Changes in VAT rates and in the personal income tax schedule are investigated. We conclude that a non-trivial part of the labour market changes may be due to reactions of the market to changes in these tax rates.     

Tax treatment of dividends and capital gains and the dividend decision under dual income tax

The paper analyses efficiency aspects of a dual income tax system with a higher tax on capital gains than dividends. It argues that apart from the distortions to investments claimed in earlier literature, the system puts even more emphasis in creating incentives for entrepreneurs to participate in tax planning. The paper suggests that the owner of a closely held company can avoid all personal taxes on entrepreneurial income by two tax-planning strategies. The first is the avoidance of distributions, which would be taxed at the tax rate on labour income. These funds would instead be invested in the financial markets. The second strategy is a distribute and call-back policy, converting retained profits into new equity capital. Interestingly, the outcome is that investment in real capital is not distorted in the long-run equilibrium. Empirical evidence using microdata is also provided.      

A General Model of the Behavioral Response to Taxation

This paper generalizes the standard model of how taxes affect the labor-leisure choice by allowing individuals to change both their labor supply and avoidance effort in response to tax changes. Doing so reveals that the income and substitution effect of taxes depend on both preferences and the avoidance technology. Econometric analysis will not in general allow one to separately identify the two influences, unless one can specify observable determinants of the cost of avoidance. The effective marginal tax rate on working must be modified by the addition of an avoidance-facilitating effect, which measures how the cost of avoidance changes with higher income. This model provides a conceptual structure for evaluating to what extent, and in what situations, the opportunities for tax avoidance mitigate the real substitution response to taxation.     

Environmental policy,pollution, unemployment,and endogenous growth

The paper develops a model of endogenous economic growth with pollution externalities and a labor market distorted by union monopoly power and by taxes and transfers. We study the optimal second-best pollution tax and abatement policy and find that a shift toward greener preferences will tend to reduce unemployment, although it will hamper growth. We also find that greater labor-market distortions call for higher pollution tax rates. Finally, we show that a switch from quantity control of pollution combined with grandfathering of pollution rights to regulation via emission charges has the potential to raise employment, growth, and welfere without damaging the environment.     

我国银行税负效应比较分析

税收对于金融业发展的有重大影响，随着我国经济发展及竞争环境的改变，中国金融业面临激烈的竞争。根据WTO条款，我国金融业的开放力度将加大，外资全面进入金融业只是时间问题，而我国金融业还存在许多问题．极大的影响了中国金融业的健康发展。本文简要介绍了我国金融税制结构及其存在的问题，并分别对以间接税（营业税）与直接税（所得税）进行局部均衡分析，在学者研究的基础上设计了我国银行利润函数，分析了主要税种对我国银行业务的影响．进行了一定程度的探讨。最后对完善我国金融税制提出了建议，以期对我国金融税制改革有帮助。     

Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households

This paper explores the effects of a tax levied on Spanish energy-related CO2 emissions. After justifying the relevance of carbon taxation in the Spanish context, we consider the introduction of a product (fossil-fuel) tax with a rate obtained through the ‘actual damage cost’ method. Our empirical analysis proceeds in two stages. First, we employ an input-output demand model to calculate the price changes after the introduction of carbon taxation. In a second stage, simulation with Spanish household micro-data for 1994 yields the environmental and economic effects of a Spanish carbon tax. We find a limited short-run reaction to the carbon tax, which hampers its environmental success. The carbon tax burden is, however, significant, with a proportional distribution across households.     

环境保护税收政策的国际实践及借鉴

目前世界各国都力求遵循可持续发展的基本思想,实现人与自然、环境的和谐统一,其中环境保护问题是各国面临的共同难题。从上世纪70年代起,西方发达国家采用税收政策保护环境,已取得了明显的效果。学习西方发达国家环境保护税收政策的实践经验,对其在税种的开征、税收收入的使用、税收征管等方面进行研究、总结,对于我国采用税收手段保护环境,注重经济增长质量的提高具有借鉴意义。     

A CGE Analysis of the Impacts of a Carbon Tax on Provincial Economy in China

This article conducts a computable general equilibrium (CGE) model to investigate the impacts of a carbon tax on economy at province levels in China since China features significantly differentiated development modes across regions. Three representative provinces including Henan, Fujian, and Chongqing are selected as the sample. The empirical results indicate that carbon tax is an efficient policy to reduce carbon emissions accompanied with negative impact on provincial economy. To cushion the negative impacts of carbon tax, a moderate carbon tax rate and carbon tax recycling policy are recommended according to the simulation results.     

Efficient Tax Competition with Factor Mobility and Trade: A Note

This note shows that residence- and source-based taxes on capital income are not sufficient to sustain an efficient Nash equilibrium when several goods are internationally traded, apart from two special cases. With several traded commodities, domestic fiscal policies affect foreign welfare not only through changes in the world interest rate but also through changes in the equilibrium relative prices of traded commodities. In order to guarantee the existence of an efficient Nash equilibrium in the general case, additional tax instruments are required. In particular, destination-based taxes on traded commodities are needed to enable the government to control the relative commodity prices faced by domestic consumers. In addition, in order to shield domestic producers from changes in world prices, the government must levy either origin-based commodity taxes or taxes on the immobile factors.     

Network Externalities and Indirect Tax Preferences for Electronic Commerce

Although most arguments supporting preferential tax treatment of electronic commerce are suspect, the existence of network externalities provides one potentially defensible rationale. This paper considers (1) direct network externalities, which arise in communications networks like the Internet, (2) indirect network externalities, which arise in computer hardware/software systems in imperfectly competitive markets, and (3) learning network externalities, which arise when existing network participants assist new users. It concludes the case for preferential treatment is weak, and that proposed blanket sales tax exemptions of remote (or all) e-commerce are especially inappropriate. Finally, the paper comments briefly on US sales tax reform efforts.     

From the global income tax to the dual income tax: Recent tax reforms in the Nordic countries

The paper discusses the recent drive toward a system of dual income taxation (DIT) in the Nordic countries. The pure version of this system combines progressive taxation of labor and transfer incomes with a proportional tax on income from capital at a level equal to the corporate income tax rate. The paper considers the motives for the introduction of this new income tax system, ranging from abstract theoretical arguments to very pragmatic considerations. While the Nordic DIT system violates the principles of the conventional personal income tax, it is argued that it may in fact be more in line with the philosophy of a true Haig-Simons comprehensive income tax. It is also suggested that the DIT system may cause fewer distortions to resource allocation than the conventional income tax. On the debit side, the paper points out several practical problems of taxing income from small enterprises under the differentiated income tax.