A tax discrepancy coefficient resulting from tax evasion or tax expenditures

Tax evasion and tax expenditures introduce discrepancies between taxpayers. In this paper, a tax discrepancy coefficient has been worked out in order to establish, given a constant tax yield, what bigger or smaller amounts taxpayers would have to pay if tax evasion or tax expenditures were completely eliminated. After the definition of the coefficients these are calculated for individual income tax returns in Belgium. Similar coefficients can be established for other types of taxation, such as inheritance tax, corporate income tax or even sales tax (e.g. V.A.T.).     

Value-added tax and the theory of tax incidence

A value-added tax is examined in a general-equilibrium model of tax-incidence incorporating primary factors and intermediate goods. Production coefficients are variable and demand is elastic. The principal result is that under assumptions of fixed coefficients and inelastic demand which have been commonly employed in the literature, VAT as well as the corporation income tax will be neutral. In the more general setting of this paper, only VAT, applied to every industry at equal rates, will not affect relative factor and commodity prices. Incidence and other economic effects of a partial VAT are also discussed.     

Measuring tax efficiency: A tax optimality index

This paper introduces an index of tax optimality that measures the distance of some current tax structure from the optimal tax structure in the presence of public goods. This index is defined on the [0, 1] interval and measures the proportion of the optimal tax rates that will achieve the same welfare outcome as some arbitrarily given initial tax structure. We call this number the Tax Optimality Index. We also show how the basic methodology can be altered to derive a revenue equivalent uniform tax, which measures the tax burden implied by the public sector. A numerical example is used to illustrate the method developed, and extensions of the analysis to handle models with multiple households and nonlinear taxation structures are undertaken.     

Experimental evidence on tax salience and tax incidence

Although a basic theoretical principle in public economics assumes that individuals optimize fully with respect to the introduction of a tax, a growing body of research is proving that several heuristics are in place when people take decisions. We re‐examine the well known liability side equivalence principle in the light of the concept of salience. While these two topics have been extensively investigated in isolation, this paper innovates on the previous literature in that it focuses on their joint effects. Is tax incidence dependent on whether the subjects face a salient rather than a nonsalient tax? Does the salience of a tax exert a different effect depending on who is legally committed to bear the tax burden? We address these questions through a laboratory experiment in which one unit of a fictitious good is being traded through a double‐auction market institution. Based on a panel data analysis, our contribution shows that point of collection matters and determines the economic incidence of tax. Additionally, we find that the joint effect of salience and statutory incidence does not alter the informative efficiency, but has a positive effect on buyers’ allocational efficiency when the tax is levied on sellers.     

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 excise tax effects of the property tax

This paper constructs a theory of how differences across regions in property tax rates affect product prices and factor prices. For a model where labor and capital are perfectly mobile between regions, it is shown that consumers residing in different regions face the same nontraded good prices, even when property tax rates differ across regions.     

The effect of tax enforcement on tax morale

In this paper we argue that tax enforcement is an additional contextual factor affecting tax morale, one of the most important determinants of tax compliance. By using a unique dataset that merges a representative sample of Italian households with administrative data on tax enforcement, we first find that tax morale is positively correlated with tax enforcement. Second, to deal with possible endogeneity of tax enforcement, we show that results are confirmed in an IV specification using the change in the tax gap at the provincial level as an instrument for tax enforcement. Finally, we provide evidence that the impact of tax enforcement and social environment is stronger at low quantiles of tax morale. Our results show that besides that of lowering the expected value of tax evasion, tax enforcement has an additional and indirect effect on tax compliance through its effect on tax morale.     

Equalizing tax bases or tax revenues under tax competition? The role of formula apportionment

This paper contributes to the literature on fiscal equalization and corporate tax competition. The innovation is that we explicitly model multinational enterprises and a corporate tax system that is designed according to formula apportionment. Two main results are obtained. First, in contrast to previous studies we identify cases where tax revenue equalization is better in mitigating detrimental tax competition than tax base equalization. Second, tax base equalization nevertheless has the advantage that it may render tax rates efficient, depending on the shape of the apportionment formula. A pure payroll formula does not ensure efficiency, but a back‐of‐the‐envelope calibration of our model to Canadian provinces suggests that a pure sales formula may be optimal.     

Estimating tax noncompliance with evidence from unaudited tax returns

This article estimates the degree of tax noncompliance using evidence from unaudited tax returns. Measurements of noncompliance are derived from the relationship between reported charitable contributions and reported income from wages and salary as compared to alternative reported income sources such as self-employment, farm and other small business income. Assuming that the source of one's income is unrelated to one's charitable inclinations and that the ratio of true income to taxable income does not vary by income source, any difference in the relationship between charitable contributions and the source of income can be attributed to (relative) underreporting by the individual. We find that the implied amount of noncompliance is significant and that it varies by source of income, as well as between positive and negative values of each type of income.     

International capital tax evasion and the foreign tax credit puzzle

In this paper we examine how the presence of international tax evasion affects the choice of a foreign tax credit by a capital exporting region. Since the credit raises the opportunity cost of concealing foreign source income, it can be employed to discourage evasion activity. International tax evasion can thus help to rationalize the adoption of a tax credit in excess of a deduction-equivalent rate. JEL Classification: H21, H26
Evasion fiscale pour le capital international et le problème du crédit d'impôt pour le fardeau fiscal à l'étranger. Ce mémoire examine comment la présence d'évasion fiscale pour le capital international affecte le choix du crédit d'impôt pour le fardeau fiscal à l'étranger par une région qui exporte du capital. Puisque le crédit d'impôt accroît le coût d'opportunité du camouflage de la source étrangère de revenus, c'est une technique qui peut être employée pour décourager l'évasion fiscale. Voilà qui peut expliquer qu'on adopte un crédit d'impôt qui est plus généreux que ce qui constituerait la déduction dans un système où le fardeau fiscal à l'étranger est simplement déduit du revenu imposable.     

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.     

企业税收筹划的涉税风险与规避研究

企业在生产经营过程中需要强化税收筹划的涉税风险管理工作,分析税收筹划中涉税风险的成因,并采取相应的措施来防范和规避涉税风险。本文通过分析企业中常见的几类涉税风险,并针对这些风险提出一些规避措施,实现对企业税收筹划涉税风险的有效规避,对增加企业收益有所帮助。     

International tax arbitrage, tax evasion and interest parity conditions

Using a finite-horizon general equilibrium model with uncertainty and money, we characterize situations where tax arbitrage opportunities may arise for international portfolio investors in an economy with heterogeneous capital income taxation when there is some scope to evade taxes on foreign capital income. We derive tax-modified uncovered interest parity conditions and forward rates similar to the no-tax ones, but augmented by tax-induced “risk-premium” terms; covered interest parity conditions remain unaffected by the introduction of capital income taxes, a consequence of our approach of bounding tax-based arbitrage without restricting arbitrage per se.     

Household tax evasion

Household members share public goods and make intra-household transfers. We show how these features of the household interact with the tax evasion decision, and identify the dimensions in which household evasion differs from individual evasion. In the model we present two members of a household choose how much to contribute to a household public good and how much self-employment income to evade. We are interested in how different evasion possibilities interact with the contribution decisions to the household public good and the role of income transfers within the household. We show the household evasion decision differs from the individual decision because it affects the outcome of the household contribution game. When household members are taxed as individuals neutrality applies when choices are not constrained. If the evasion level of one household member is constrained then an income transfer can generate a Pareto improvement. When the household members are jointly taxed there is a couple constraint on strategies and corner solutions can emerge.     

Asymmetric tax multipliers

Using recently published tax series by Romer and Romer (2010) and Cloyne (2013) we examine whether or not positive and negative tax shocks have asymmetric effects on the U.S. and U.K. economies. We find that in the U.S. positive tax shocks—tax increases—do not affect output while negative tax shocks—tax cuts—have large, positive effects. In the U.K., tax increases substantially reduce output while tax cuts have no significant effect.     

Joint tax evasion

Tax evasion analysis typically assumes that evasion involves individual taxpayers responding to some given policies. However, evading taxes could require the collaboration of at least two taxpayers. Detection depends on the costly avoidance activities of both transacting partners. An increase in sanctions leads to a direct increase in the expected cost of a transaction in the illegal sector, but it may also increase the incentive for the partners to cooperate in avoiding detection. The total cost of transacting in the illegal sector can fall, and tax evasion may increase. The policy implications of this phenomenon are considered. JEL Classification: H26
L'évasion fiscale collective. Dans les analyses de l'évasion fiscale, on suppose habituellement que le payeur de taxe fait face à un ensemble donné de politiques auxquelles il réagit. Pourtant, dans le cas des transactions marchandes, l'évasion fiscale n'est possible que si plusieurs agents coopèrent ensemble. La probabilité que l'évasion soit détectée dépend alors des efforts que chacun fait pour la cacher. Dans un tel contexte, de plus lourdes sanctions accroissent le coût espéré des transactions illégales, mais peuvent aussi, indirectement, accroître l'incitation pour les partenaires à coopérer pour cacher leur activité illégale. Il en résulte que le coût total des transactions illégales peut diminuer et l'évasion fiscale augmenter. Nous étudions les implications de ce phénomène.     

Timing tax evasion

Standard models of tax evasion implicitly assume that evasion is either fully detected, or not detected at all. Empirically, this is not the case, casting into doubt the traditional rationales for interior evasion choices. I propose two alternative, dynamic explanations for interior tax evasion rates: First, fines increasing in the duration of an evasion spell, implying that the expected costs of evasion increase convexly with the time spent non-reporting, while the benefits increase linearly. Second, different vintages of income sources subject to aggregate risk and fixed costs when switched between evasion states. The dynamic approach yields a transparent representation of revenue losses and social costs due to tax evasion, novel findings on the effect of policy on tax evasion, and a tractable framework for the analysis of tax evasion dynamics.     

政府寻租及寻租社会的改革

寻租理论一直是人们最关注的领域。它既与公共选择学派分不开，又与传统政治经济理论相区别。公共选择学派的观点和现实生活中政府的寻租行为使得人们对政府的作用及其越来越多的限制个人行为的偏好产生极不信任的态度。通过对政府寻租、寻租的社会变革以及寻租产生的根源的分析，可以发现，用制度创新来抑制寻租将会更加灵活和多样化，也更加有效。