Growth effects of a revenue-neutral environmental tax reform

This paper analyzes tax-policy measures within a two-sector endogenously-growing economy with elastic labor supply. Pollution is either modeled as a side product of physical capital used as a production factor in the final-good sector or as a side product of production. The framework allows us to analyze the consequences of isolated tax changes or of a revenue-neutral environmental tax reform for economic growth. Although pollution does not directly affect production processes, it can be shown that a higher pollution tax as well as a revenue-neutral environmental tax reform boost economic growth, whereas a tax on capital, consumption, or labor reduces the long-term growth rate of the economy.     

Undominated directions of tax reform

This article considers the reform of a commodity tax system. Consumers' preferences over directions of tax reform are constructed from indirect utility functions. A Wicksellian decision procedure is used to define a dominance relation on the set of directions of change; direction x dominates direction y if and only if (a) everybody prefers x to y or (b) x is the status quo and at least one person prefers x to y. A number of characterizations of undominated directions of change are provided. A related unanimity rule procedure, which does not single out the status quo for special treatment, is also considered. Particular attention is paid to the issue of whether Wicksellian reforms preserve production efficiency. Remarks on the relationship between this work, previous work in optimal taxation theory, and social choice theory are also provided.     

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。     

On the timeliness of tax reform

This paper analyzes efficient government reactions to unanticipated tax avoidance. Quickly reforming tax laws to reduce the effectiveness of new tax avoidance techniques prevents widespread adoption, but indirectly encourages the rapid development of new avoidance methods if prior users are permitted to retain their tax benefits. Tax reforms that immediately prevent new avoidance mean that innovators need not fear imitation by competitors, and cannot rely on copying the innovations of others. Such an activist reform agenda diverts greater resources into tax avoidance activity, and might thereby lead to a faster rate of tax base erosion, than would a less reactive government strategy. Efficient government policy therefore entails either the retroactive elimination of tax savings, with possible associated costs, or else a deliberate pace of tax reform in response to taxpayer innovation.     

Project evaluation by potential tax reform

Shadow prices are derived for small open economies with several production sectors experiencing constant returns to scale. Small projects affect the balance of trade, domestic prices (of non-traded goods and factors), and sector scales. Only domestic prices affect welfare, and only if there is not ‘domestic price equalization’. Generally, a project's net benefits depend upon the potential tax (and tariff) reform made possible (or necessary) through the balance of trade effect. Border prices are right for traded goods, but domestic good shadow pricing requires knowing the direction of at least one reversible available tax reform, and presuming optimality with respect to available reforms.     

Price elasticities and tax reform in Mexico

Price responses are usually estimated for the average household. However, different households are unlikely to respond in a similar way to movement in prices. Consequently, relying on averages may be misleading when examining the behaviour of a particular group of households such as the poor. This article uses six household surveys collected in Mexico between 1989 and 2000 to derive price responses for 10 product groups and for five levels of income households. The estimated price elasticities are then fed into a micro simulation model to measure the effect of a marginal tax reform. The results find that that poorer households tend to react substantially more to movement in prices, suggesting the usefulness of estimating elasticities that reflect the behavioural responses of the poor rather than of the entire population. The micro simulation results indicate that reducing the taxes on maize, alcoholic beverages and vegetables would be both more equitable and more efficient in terms of social welfare. Meanwhile, a reduction in the tax on legumes, sugar, and oils and fats, while inefficient, would contribute to reduce inequality.     

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.     

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.     

An exercise in political economy of tax reform

If the tax rate is endogenously determined by majority voting, then a fully effective and costless reform resulting in full tax compliance may not be supported by a majority even when the evaders (or, avoiders) are only a minority.     

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.     

On selective indirect tax reform in developing countries

The current consensus on indirect tax reform in developing countries favors a reduction in trade taxes with an increase in VAT to raise revenue. The theoretical results on selective reform that underlie this consensus are, however, derived from partial models that ignore the existence of an informal economy. Once the incomplete coverage of VAT due to an informal economy is acknowledged, we show that, contrary to the current consensus, the standard revenue-neutral selective reform of trade taxes and VAT reduces welfare under plausible conditions. Moreover, a VAT base broadening with a revenue-neutral reduction in trade taxes may also reduce welfare. The results raise serious doubts about the wisdom of the indirect tax reform policies pursued by a large number of developing countries.     

German income tax reform. A simulation model

An independent commission on tax reforms and the Federal Ministry of Finance had been working for some time on basic changes of the German tax system. Their suggestions recently have been published (Bericht, 1971) just as many other proposals for tax reform from various experts, organizations, and political parties. Yet, compared with the Report (1966) of the Royal Commission on Taxation of Canada (Carter Commission) the German reform plans are less comprehensive and fundamental than the thorough economic analysis in the six volumes of the Carter Report.     

Optimal tax reform in the presence of adjustment costs

The optimal implementation of an efficiency-enhancing capital taxation reform is examined when the government is concerned about arbitrary reform-induced redistributions and investment causes firms to incur adjustment costs. Theoretical results indicate that immediate partial enactment of reform is optimal with concave adjustment costs, while with convex adjustment costs, the optimal reform implementation policy is either (i) immediate partial enactment with sufficiently low adjustment costs, (ii) phased-in partial enactment with intermediate adjustment costs, or (iii) postponed partial enactment with sufficiently high adjustment costs. Numerical results suggest that, relative to the optimal one-step implementation policy, little is gained by phasing-in reform.     

Aggregate spillovers magnify the welfare benefits of tax reform

Relatively small degrees of aggregate increasing returns to scale ubstantially magnify both welfare benefits and income effects associated with tax reform. External returns to scale of 10 per cent increase the welfare benefits of tax reform by roughly one-third and increase changes in income by significantly more than a model characterized by constant returns to scale. Aggregate spillovers of 20 per cent increase welfare benefits by roughly three-fourths. Aggregate spillovers significantly reduce tax revenue-maximizing capital tax rates. This research convincingly demonstrates the importance of precisely identifying the degree of aggregate returns to scale before the benefits of tax reform can be accurately assessed. JEL Classification: E62, O40
Des degrés relativement faibles de rendements croissants à l'échelle augmentent substantiellement les effets positifs de bien-être et les effets de revenus associés à une réforme fiscale. Des rendements externes à l'échelle de 10 pour-cent accroissent les effets positifs de bien-être d'une réforme fiscale d'un bon tiers, et les effets de revenus d'une manière significative par rapport à ce qui'ils seraient dans le cas de rendements constants à l'échelle. Des effets agrégés de retombée de 20 pour-cent augmentent les effets positifs de bien-être des trois quarts. Ces effets agrégés de retombée tendent à réduire les taux d'imposition du capital qui maximisent les revenus. Ces travaux montrent l'importance d'une identification précise du degré des rendements agrégés à l'échelle si l'on veut jauger avec justesse les effets positifs de bien-être d'une réforme fiscale.     

Public health spending, tax reform, and long-run growth

Public health spending is introduced into an endogenous growth model to examine the effect of a tax reform on the growth and learning time. Unlike previous studies, the calibrated model produces an increase in the learning time, consistent with the US data.     

我国燃油税改革中的利益博弈

燃油税从提出到现在已十余年.为何燃油税改革无法推进?这其中有方方面面的原因,本文仅从博弈论的角度分析.分别从交通部门与税务部门、中央与地方、政府与国有垄断石油公司三个方面分析了燃油税改革的内在阻力,并提出了燃油税改革的具体策略.