The unintended impact of tax and expenditure limitations on the use of special districts: the politics of circumvention

The increasing trend of special districts deserves more attention as it raises concerns on the efficiency and accountability of the fragmented local governance system in America. This paper examines whether the rapid growth of special districts can be partially explained by the expansion of state-imposed tax and expenditure limitations (TELs) during the last several decades. Using panel data from 1972 to 2007, this paper finds that TELs produce unintended circumvention effects among local governments. Specifically, the results reveal TELs motivate local general-purpose governments to create new special districts as an institutional strategy to evade the fiscal constraints imposed by the state.     

国际贸易中电子商务带来的税收问题

本文首先分析电子商务给国际贸易带来的变化,接着说明了电子商务出现后国际贸易的变化对现行税收制度的影响,最后粗浅地探讨了我国对国际贸易中电子商务这种特殊贸易征税的对策和采取的措施。     

Payroll tax incidence when the tax varies by jurisdiction: The case of the U.S. unemployment insurance tax

Standard treatment of payroll tax incidence suggests that labor, both because of inelastic supply and because workers value the benefit financed by the tax, bears most of the tax. This note considers the special case of the U.S. unemployment insurance tax, which is a payroll tax that varies by jurisdiction (states). The model set forth in this paper allows for differing degrees of both labor mobility and substitutability between types of labor and capital. Contrary to the standard treatment, this paper predicts that some types of labor will avoid this particular type of payroll tax completely. I thank Daniel Hamermesh and seminar participants at the Upjohn Institute for Employment Research and at Oakland University for helpful comments on an earlier draft. I also gratefully acknowledge sabbatical support provided by Oakland University during the initial conceptualization of the ideas presented in this paper.     

What are the effects of fiscal policy shocks?

We propose and apply a new approach for analyzing the effects of fiscal policy using vector autoregressions. Specifically, we use sign restrictions to identify a government revenue shock as well as a government spending shock, while controlling for a generic business cycle shock and a monetary policy shock. We explicitly allow for the possibility of announcement effects, i.e., that a current fiscal policy shock changes fiscal policy variables in the future, but not at present. We construct the impulse responses to three linear combinations of these fiscal shocks, corresponding to the three scenarios of deficit‐spending, deficit‐financed tax cuts and a balanced budget spending expansion. We apply the method to US quarterly data from 1955 to 2000. We find that deficit‐financed tax cuts work best among these three scenarios to improve GDP, with a maximal present value multiplier of five dollars of total additional GDP per each dollar of the total cut in government revenue 5 years after the shock. Copyright © 2009 John Wiley & Sons, Ltd.     

TAX REVENUE-FINANCED PUBLIC ABATEMENT AND WELFARE: A CONSUMPTION TAX CASE

This paper develops a model of public abatement financed either by a pollution tax or by a consumption tax. It shows that consumption tax revenue-financed public abatement raises welfare more than pollution tax revenue-financed public abatement does when the pollution tax rate rises. This result is worthwhile for environmental protection policy makers when they are determining the revenue source of public abatement.     

Patterns of Property Tax Exploitation Produced By Infrequent Assessments

A bstract . Out of dace assessments of real property for ad valorem taxation may give rise to systematic inequities in the distribution of the tax burden. One such inequity is the exploitation of a taxing jurisdiction's core area by its periphery. We provide an explanation of how such exploitation may arise. This explanation is tested empirically by observing the patterns of assessment in a sample of Pennsylvania school districts. We find a consistent pattern of overpayments, supporting an hypothesis that core areas are exploited by peripheral areas. The overpayments to school districts could be claimed by city governments.     

State and local tax competition in a spatial model with sales taxes and residential property taxes

This paper presents a theoretical model with a uniformly populated line that is divided into local jurisdictions (and/or states). If one level of government imposes sales and residential property taxes, and if the spatial extent of each taxing jurisdiction is positive and finite, then (in Nash equilibrium) the sales tax rate is less than residential property tax rate, housing consumption is suboptimal, and the public good is underprovided in each jurisdiction. If a very large state (or country) is divided into local jurisdictions, and if both levels of government choose tax rates endogenously, then under some assumptions there is an efficient outcome.     

Cash flow analysis for energy impacted local governments—a case study of mercer county,north dakota

Energy resource taxation policy has become a major issue in a number of energy producing areas and particularly in the western united States. This paper compares alternative energy taxation systems in terms of their implications for local governments and local planning. A fiscal impact simulation model is utilized to evaluate a severance-production tax system and, alternatively, an ad valorem property tax system. The results indicate that the form of taxation system adopted can have a major influence on the fiscal outlook for local governments in areas affected by large scale development projects and thus on the welfare of area residents. These results also suggest that local fiscal considerations should receive careful attention in local planning and policy formulation.     

Factor substitution and taxation in a finance constrained economy

In this paper, we examine the effects of constant-rate factor taxation on macroeconomic stability in the Woodford (1986) model. Our focus is on how the degree of factor substitution, as measured by the elasticity of factor substitution (EOS) in production, affects different balanced-budget tax rules. Analytically, we show that indeterminacy can occur under capital income taxation only when the EOS is very low, whereas indeterminacy under labor income taxation is not subject to the EOS restriction. This finding is robust when we tax all of the factor incomes with equal rates. Thus, in terms of macroeconomic stability, taxing capital income is preferred to taxing labor income.     

我国财政政策对产业结构优化的时变效应

研究目标：财政政策对产业结构优化的时变性影响。研究方法：构建带有随机波动率的时变参数因子扩展向量自回归模型,进而通过三维脉冲响应展开时变性分析。研究发现：财政政策对产业结构优化确实产生了时变效应,在经济衰退时期,应该增加财政支出、提高投资性支出占比,结合小幅度减税、提高营业税和消费税占比;在经济平稳时期,应该减少税收、提高营业税占比、降低增值税占比,结合小幅度增加财政支出、提高投资性支出占比、降低一般公共服务支出占比;在经济高涨时期,应该增加财政支出、提高科技支出和投资性支出占比,结合小幅度减税、提高所得税占比、降低营业税占比。研究创新：应用时变参数计量模型研究了财政政策对产业结构优化的时变效应。研究价值：有助于重新认识财政政策与产业结构优化的关系。     

Why is there so little tax coordination? The role of majority voting and international tax evasion

It is a striking feature of EU tax policy that countries find it difficult to agree on capital tax coordination. This is in conflict with the prevailing theoretical view, according to which tax coordination is beneficial. This paper develops a political economy argument which may help to explain this puzzle. We consider a model of tax competition where fiscal policy decisions are taken via majority voting and tax evasion is possible but costly. It turns out that tax coordination agreements may fail to generate political support because middle income groups may lose from tax coordination, even if their capital income is below average.     

The Effects of Fiscal Decentralization on Household Income Inequality: Some Empirical Evidence

Abstract

We investigate the effects of fiscal decentralization on income inequality using a sample of 23 OECD countries over the period 1971–2000. We utilize novel and robust measures of fiscal decentralization based on different degrees of fiscal autonomy of sub-central governments. Our results highlight the importance of both the nature of fiscal decentralization—expenditure versus revenue—and the extent to which independent spending responsibility and taxing powers are actually assigned to local governments. A higher degree of tax decentralization is associated with higher household income inequality within a country. Thus, even if fiscal decentralization could be attractive according to efficiency reasons, it may actually have undesirable consequences on the income distribution.     

Fiscal Policy in the New Open Economy Macroeconomics and Prospects for Fiscal Policy Coordination

Abstract.  This paper reviews the literature on the effects of fiscal policy in new open economy macroeconomics (NOEM) models, complementing it with additional results that attempt to clarify the importance of the exchange rate regime (fixed or flexible) and of the type of policy (balanced budget or debt‐financed). Fixed exchange rates only seem to postpone the costs from the short to the long run, but the type of policy is crucial in determining the welfare impact of fiscal expansions. The paper also reviews the recent literature on fiscal policy coordination and shows that there is already some evidence that the gains from coordination in this area can be potentially large but draw attention to the need for reflecting more on the role of fiscal policy as a stabilization tool and on possible interactions between fiscal and monetary policy.     

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。     

The Role of Symmetry between the Revenue and the Expenditure Side of the Government Budget in the Debate about the Potential Negative Effects of Tax Competition

The effects of capital tax competition are reconsidered in this paper incorporating the argument that the expenditure structure of public budget should reflect its revenue structure. The paper offers a small open economy model where capital and labour tax revenues are used exclusively on the provision of public inputs. It is shown that if the revenue side of the government budget exactly matches the expenditure side that is if industrial public goods are financed by both private production factors with the weights reflecting the contributions of public inputs to the private factor productivity then public inputs are provided optimally even in the presence of tax competition.     

Corporate restructuring and incentive effects of leverage and taxes

Recent empirical studies have indicated that mergers are value enhancing, yet the theoretical aspects of merger gains have not been as well explored. This paper presents a theoretical analysis of mergers. In the model of the firm presented, outstanding risky debt gives rise to agency costs of underinvestment which are offset by the benefit of debt-related tax shields. The trade-off specifies the optimal leverage for a firm. Within this framework, we then consider whether and under what circumstances firm value could be enhanced by a merger. Under a fairly broad set of assumptions it is shown that most firm combinations ‘improve’ investment incentives and increase the value of debt-related tax shields. Mergers between optimally financed firms result in a merged firm that is also optimally financed, but such mergers are not synergistic. Nevertheless, firm value may be increased if mergers are undertaken in tandem with a refinancing program to bring the combined firms from suboptimal to optimal debt levels.     

Coordination of capital taxation among asymmetric countries

This paper studies international fiscal coordination in a world of integrated markets and sovereign national governments. Mobile capital and immobile labor are taxed in order to finance a fixed budget. This generates productive inefficiency. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. It is shown that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound (i.e., a tax range) which is unanimously accepted.     

Revenue trade-offs: Implications for state Government finance

Modifications in state level fiscal structures to address inequitable tax burdens or the issue of public sector growth have been accomplished by substituting one tax for another or by adjusting rates of existing taxes. This paper presents this fiscal adjustment process on the state level in terms of a policy in which complementary or competitive taxes are jointly determined as a tax mix in a process of revenue trade-offs.     

Do enlarged fiscal deficits cause inflation? The historical record

We survey the historical record for two centuries on the connection between expansionary fiscal policy and inflation. The relationship holds in wartime when fiscally stressed governments resorted to the inflation tax. In two peacetime episodes in the early twentieth century, bond‐financed fiscal deficits, unbacked by future taxes, may have contributed to inflation. Fiscal influence on monetary policy was important in the Great Inflation 1965–1983. Expansionary monetary and fiscal policy did not lead to inflation in the Global Financial Crisis of 2007–08 but, by contrast, the fiscal and monetary response to the COVID‐19 pandemic may involve risks of fiscal dominance and future inflation.     

The Role of Irrigation Districts in California's Water Development

Summary: Early settlers found that California had excellent soil and tem-perature for agricultural development, but very scanty rainfall in the growing season. Irrigation was introduced on a small, indi-vidual scale, which developed into organized projects through the pioneering of the irrigation-district system. Legislation was passed for a special tax structure by which revenue for mainte-nance and operation of irrigation projects was obtained by taxing the benefited land exclusive of improvements. This unique tax structure encouraged individual ownership of land in units of the most economic size and spurred intensive cultivation and general economic development.