TAX COMPETITION AS A CAUSE OF FALLING CORPORATE INCOME TAX RATES: A SURVEY OF EMPIRICAL LITERATURE

Abstract Since the mid 1980s, tax rates on corporate income have declined in most industrialized countries. Tax competition between countries for mobile capital has frequently been mentioned as an explanation for this development. A vast empirical literature dealing with tax competition for mobile capital has emerged. This paper categorizes and summarizes the existing empirical studies on this issue. Particular focus is placed on the isolation of the substantive implications the quantitative study outcomes convey. Given the empirical evidence surveyed, it appears that tax rates indeed decline due to tax competition between countries, and in particular due to competition for profits. In addition to summarizing the substantive implications of the existing empirical literature, the paper addresses the question of whether the existing studies can convincingly isolate tax competition as a driver of falling corporate income tax rates.     

Tax avoidance and business location in a state border model

Previous studies have struggled to demonstrate that higher taxes deter business activity. We revisit this issue by estimating the effect of changes over time in cross-border differences in state tax conditions on the tendency for new establishments to favor one side of a state border over the other. Identification is enhanced by taking account of previously overlooked reciprocal agreements that require workers to pay income tax to their state of residence as opposed to their state of employment. When reciprocal agreements are in force, higher personal income tax rates lure companies from across the border, while corporate income tax and sales tax rates have the opposite effect. Where reciprocal agreements are not in place, the results are largely reversed. These patterns are amplified in heavily developed locations, and differ in anticipated ways by industry and corporate/non-corporate status of the establishment. Overall, results strengthen the view that state-level tax policies do affect the location decisions of entrepreneurs and new business activity, but not in a way that lends itself to a one-size-fits-all summary.     

Are Corporate Tax Reductions Real Benefits under Imputation Systems?

Imputation systems integrate corporate and shareholder personal income taxes to alleviate double taxation of dividend income. In this study, we empirically examine whether a corporate tax rate reduction under an imputation tax system benefits shareholders. Using Taiwan as a setting, our analyses indicate that decreasing the corporate tax rate is associated with an increase in dividend payout ratio and foreign investment. Moreover, the increase in dividend payout ratio is even greater for firms that have a higher increase in foreign ownership. Additionally, the market reacts positively to an announcement of a tax rate reduction; specifically, positive stock price reactions are stronger for firms that experienced a greater increase in foreign ownership in response to the tax rate reduction, for firms with greater liquidity constraints and more growth opportunities before the tax rate reduction, and for firms with a bigger decrease in effective tax rates after the tax rate reduction. Overall, we provide evidence that a tax rate reduction is associated with economic impacts and that foreign shareholders appear to be the main beneficiaries of a tax rate reduction under an imputation tax system.     

New and Current Evidence on Determinants of Aggregate Federal Personal Income Tax Evasion in the United States

Using the most current data available, this study seeks to identify any new as well as traditional determinants of personal income tax evasion. A variety of empirical estimates find that income tax rates, the IRS audit rate and IRS penalty interest rates, and the unemployment rate all influence tax evasion. In addition, rarely investigated variables including the tax‐free interest rate, the public's job approval rating of the president, and the public's dissatisfaction with government, along with previously unstudied variables, namely, the real interest rate yield on Moody's Baa‐rated long‐term corporate bonds and the real interest rate yield on three‐year Treasury notes, also affect income tax evasion.     

论企业所得税税负变动对湖南投资的影响

税收作为国家一项重要的财政政策,经常被用于对经济进行宏观调控。由于企业所得税在我国税收体系中占据着重要地位,因此所得税政策的调整必然会给经济带来一定的冲击。本文主要分析企业所得税税负变动对湖南投资的影响。     

Earnings Management to Influence Tax Policy: Evidence from Large Malaysian Firms

This study investigates the link between effective tax rates (ETR) and earnings management in a non‐Western context. It examines the use of accounting choice by Malaysian firms in response to an anticipated change in tax policy. We predict and find that large Malaysian firms with low effective tax rates decrease book income prior to a reduction in corporate tax in order to influence tax policy. Our empirical results are consistent with prior evidence in the US, that firms use accounting choice to realize economic objectives. The Malaysian evidence suggests that the result of a positive association between ETR and earnings management can be generalized outside the US context.     

Corporate tax,financial leverage,and portfolio risk

We examine the theoretical implications of corporate income tax for a risky portfolio in a aggregate-endowment economy. In this model, corporate income tax affects the portfolio risk associated with the rebalancing motive during market clearance. An asset is defined as a portfolio of stocks and bonds whose portfolio weights are similar to financial leverage. Corporate tax can decrease after-tax consumption from dividends (increase leverage) and increase the tax shield that increases dividends (decrease leverage). Changes in dividends are responsible for the correlation between expected dividend growth and consumption growth and, thus, affect stock pricing and returns. Overall, the model is characterized by tax-induced portfolio risk associated with financial leverage.     

The interaction of corporate dividend policy and capital structure decisions under differential tax regimes

We develop a valuation model that integrates corporate capital structure and dividend payout policies. The resulting “extended” Miller (J Financ 32:261–297, 1977) model explicitly incorporates the different tax rates on corporate income, personal interest, dividends, and capital gains. We apply the model to ten different U.S. tax regimes since 1979 and generate several testable predictions. When the dividend tax rate exceeds the capital gains tax rate, dividend payout can partially offset value-enhancing effects of leverage. When the two rates are close, dividend payout loses its moderating influence. Using the S&P 1500 universe, we obtain empirical results that are consistent with the model’s predictions.     

Child Exemptions or Child Allowances

A bstract Eliminating Child exempitons and replacing them with a European style child allowance program would be an effective and costless antipoverty policy The distributional and poverty reducing effects of three potentral child allowance programs are examined These include a fixed dollar tax credit a dollar tax credit a tax credit that declines with income, and a taxable allowance of the some dollar amount for each child     

Tax Competition and Revelation of Preferences for Public Expenditure

This paper considers a federal country composed of local jurisdictions that differ in their inhabitants' tastes for public goods, and which finance local public expenditure through a source-based tax on capital income. The taste for public goods is the private information of local governments. The central government seeks an optimal policy, in which grants to local governments are conditioned on local tax rates. The uninformed central government seeks both to allocate capital efficiently among jurisdictions, and to induce jurisdictions to provide an efficient mix of private and public consumption. It is shown that there persist at this constrained optimum both some misallocation of capital and some violation of the Samuelson rule for optimal public good provision in every jurisdiction.     

Corporate income taxation of multinationals and unemployment

Within a two-country model with involuntary unemployment, this paper investigates corporate income taxation under separate accounting versus formula apportionment. In contrast to separate accounting, under formula apportionment the corporate tax policy causes a fiscal externality that results from unemployment. This externality is the highest when the apportionment formula contains the payroll factor only. It is minimized for the pure sales (property) formula, if the substitution elasticity is low (high). The unemployment externality tends to compensate other externalities such that tax rates become inefficiently low. The deviation from the efficient tax policy is minimized when the apportionment formula contains the sales factor only.     

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.     

论内外资企业所得税并轨改革

在20世纪80年代初,为吸引外资和引进先进设备,我国制定了相应的外资企业税收优惠政策,这些政策为国家吸引了大量的外贸资金以及先进的技术设备。然而随着国民经济的高速增长以及税基的不断增长,内外资企业出现了严重的不公平竞争,负面影响已逐步显现。本文认为,为了改变内外资企业的不公平竞争以及税收优惠政策引起的负面影响的局面,内外资企业所得税并轨改革势在必行。     

财政双向失衡、地方税财治理与企业避税分化

以我国A股上市区公司微观与30省区市的宏观进行匹配得到的面板数据为样本,通过构建双向固定效应模型和面板联立方程模型,就财政双向失衡对企业避税的影响路径进行实证。研究表明：我国同时存在较高的双向失衡,财政纵向失衡促进企业避税,财政横向失衡抑制企业避税。从传导路径来看,财政纵向失衡通过降低地方税收征管和政府补助强度促进企业避税,财政横向失衡通过提高地方税收征管和政府补助积极性抑制企业避税;从地区分化来看,东部地区与全样本结论一致,但在非东部地区,财政纵向失衡、横向失衡与企业避税均负相关,这主要是因为中西部地区企业减少避税能换来更多的政府补助;从地方政府债务规模分化来看,财政纵向失衡与横向失衡对企业避税的影响均在债务规模低的地区成立;从企业自身现金流分化来看,纵向失衡与企业避税的促进关系在现金流低组中成立,而横向失衡与企业避税的抑制关系在现金流高组中成立。     

新收入准则对房地产行业的税务影响

财政部在2017年修订了新收入准则,这一举措,对企业和行业产生了非常大的影响。经过修订之后的新收入准则,不仅在会计信息的可比性方面得到了提升,同时对于收入确认时点和收入金额计量这两个方面也带来了一系列的税法和会计间差异。针对房地产行业比较普遍的业务场景,论文对新收入准则下产生的房地产行业的税会差异,还有在增值税、企业所得税以及土地增值税这三个方面产生的作用展开分析。     

做好企业所得税纳税调整

近年来,财税政策发生了建国以来的重大变化,社会各监管部门对大型国有垄断企业的财务监管力度进一步加强,税务检查非常频繁,这就对企业财务人员提出了新的更高的要求,做好企业所得税纳税调整,就显得十分重要。本文从工资性支出等方面阐述应当做好企业所得税纳税调整。     

Income taxes and the destination of movers to multistate MSAs

We examine how differences in state income tax rates, as well as other state and local taxes and public service expenditures, influence the choice of state of residence for households (federal tax filers) moving into multistate metropolitan areas (MSAs) using data from the IRS on the migration of taxpayers. MSAs that are on borders provide a spatial discontinuity—discrete differences in state tax rates within a single labor market. These MSAs allow residents to live in one state and work in another state. We find that differences in state income tax rates have a significant impact on the relative rate of migration to the states within an MSA. However, contrary to what would be expected, this impact is only significant in MSAs in which the filing state is based on employment (states without reciprocity) and not for those states in which the filing state is the state of residence (states with reciprocity). In MSAs where states do not have reciprocity agreements, a difference of ten percent in tax rates leads to a 4.1 percent difference in the relative rate of incoming taxpayers. Analogously, we find that a ten percent difference in state tax rates in these MSAs results in a 3.3 percent difference in the rate of tax base inflow (AGI). Our results suggest that one reason that differences in state income taxes appear to have more impact in multistate MSAs without reciprocity is that only relatively large differences in state income tax rates have any impact on migration and these differences are much more pronounced in MSAs without reciprocity.     

Lowering the Marginal Corporate Tax Rate: Why the Debate?

In an effort to attract new investors and retain existing producers, governments use corporate tax rates as a policy tool for industrial recruitment, resulting in inter‐state tax competition. Foreign direct investment (FDI) growth and GDP growth are the two policy outcomes gauged in inter‐state tax competition. The assumption is that lower corporate taxes lead to increases in FDI, which results in capital formation that generates GDP growth. This 60‐nation panel study tests that assumption through examining economic indicators contingent on taxation, such as FDI and mergers and acquisitions among multinational corporations between 1999 and 2009. The results suggest that reduced corporate tax rates can increase FDI but decrease annual GDP growth. The main policy implication is that tax competition may attract investment, but may not promote overall economic growth, offering support for value‐extraction theories.     

地方政府政绩诉求、政府控制与国有企业税负

以我国2004—2012年A股非金融类地方国有上市公司为研究样本,在区分了省级政府与市级政府控制的基础上,实证检验了各级地方政府不同的政绩诉求对国有企业控制程度是否存在差异及该控制程度对国有企业税负的影响。研究发现：地方政府的政绩诉求（包括财政盈余、相对经济增长率、失业率等）显著影响地方政府对国有企业的控制程度,且省级政府更注重相对经济增长率及失业率,市级政府更关注财政盈余水平;三个政绩诉求中相对经济增长率对政府控制的影响最为显著;地方政府对国有企业的控制程度与企业税负显著正相关;与省级政府相比,市级政府控制的国有企业税负更重。这表明,增加地方国有企业税负是市级地方政府实现其政绩诉求的重要途径。     

Agricultural Land Conversion and Inheritence Tax in Japan

In this paper we investigate theoretically the extent to which the development timing of agricultural land conversion would be hastened by the introduction of inheritence tax. We extend the optimal timing of wealth maximizing value use models by Scouras (1978), Anderson (1993) and Kanemoto (1996) to examine cases where tax rates vary according to land use with (i) almost no income and (ii) high income use, such as rental housing. We first model landowner's behavior within the life cycle dynamic optimization framework and then simulate the impact of inheritence tax on the optimal timing of development. Some notable predictions about optimal timing of development emerge from our numerical analysis: no inheritence tax effect is observed for landowners whose inheritence probability is less than 1% (that is, landowners in the age group 40 or below) and whose inheritence tax rate is less than 10%. However, the optimal timing of development drops to below one year for landowners whose inheritence probability is more than 18% and whose tax rate is 30%.