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Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Over 140 countries agreed on a fundamental corporate tax reform in 2021 to be implemented in 2023 and beyond. To measure its potential effects, we study asset price changes within minutes of the reform announcements. We construct proxies for the reform's costs regarding U.S. companies' tax burdens and countries' public finances. Likely exposed companies exhibit significant negative stock returns. Our lower-bound estimates indicate total shareholder value losses of $112.6 billion one day after the reform announcements. Further, likely exposed countries experience increases in sovereign debt credit risk. Our findings inform the cost-benefit analysis of a historical international tax reform. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The transition to a green, sustainable economy is largely reliant on corporate investment in the realm of environmental protection. Utilizing the adoption of the third phase of the Golden Tax Project (GTPIII) in China as a quasi-natural experiment, this paper examines how corporate environmental investment changes in response to greater tax enforcement. Our results reveal that tougher tax enforcement significantly lowers corporate environmental investment. Such an effect is stronger for firms faced by high financial constraints and those operating in non-heavy-polluting industries. Moreover, the mechanism analysis indicates that the higher tax burden induced by greater tax enforcement is the potential channel. Overall, this paper shows that stricter tax enforcement could potentially result in adverse spillover effects on corporate environmental investment, which warrants attention in tax collection practices. [ABSTRACT FROM AUTHOR]

Over the last three decades, a little-noted change has taken place in state lotteries. This change is an increase in the average payout rate, the share of sales that is returned to players in the form of prizes. Because it reduces the rate of implicit taxation on lottery purchases and its accompanying welfare loss, this change has inadvertently made lotteries better, or at least less objectionable. This paper reviews the normative case for reducing the implied tax, documents the rise in payout rates across the United States, offers an explanation for that rise, notes the starring role played by instant games, illustrates its effect on the regressivity of lottery finance, and documents the surprising correlation between the price of instant games and their payout rates. [ABSTRACT FROM AUTHOR]

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper delves into the critical role of tax credits, specifically Sections 45Q and 45V, in the financing and economic feasibility of low-carbon-intensity hydrogen projects, with a focus on natural-gas-based hydrogen production plants integrated with carbon capture and storage (CCS). This study covers the current clean energy landscape, underscoring the importance of low-carbon hydrogen as a key component in the transition to a sustainable energy future, and then explicates the mechanics of the 45Q and 45V tax credits, illustrating their direct impact on enhancing the economic attractiveness of such projects through a detailed net present value (NPV) model analysis. Our analysis reveals that the application of 45Q and 45V tax credits significantly reduces the levelized cost of hydrogen production, with scenarios indicating a reduction in cost ranging from USD 0.41/kg to USD 0.81/kg of hydrogen. Specifically, the 45Q tax credit demonstrates a slightly more advantageous impact on reducing costs compared to the 45V tax credit, underpinning the critical role of these fiscal measures in enhancing project returns and feasibility. Furthermore, this paper addresses the inherent limitations of utilizing tax credits, primarily the challenge posed by the mismatch between the scale of tax credits and the tax liability of the project developers. The concept and role of tax equity investments are discussed in response to this challenge. These findings contribute to the broader dialogue on the financing of sustainable energy projects, providing valuable insights for policymakers, investors, and developers in the hydrogen energy sector. By quantifying the economic benefits of tax credits and elucidating the role of tax equity investments, our research supports informed decision-making and strategic planning in the pursuit of a sustainable energy future. [ABSTRACT FROM AUTHOR]

We investigate effects of tax reporting institutions on evasion and incidence using an experimental double auction market. We find that 28% of the sellers are truthful when only sellers report, but that 88% and 64% of them are truthful under costless and costly third-party reporting by buyers, respectively. Reporting behavior therefore responds to the intensity of deterrence. However, we find that prices do not fully reflect the lower taxes of the evaders. Thus, when sellers can unilaterally evade taxes, tax incidence deviates from the prediction of the standard model, and there is deadweight loss even if tax revenue is low. Pricing, incidence, and reporting patterns in all treatments are consistent with a model with heterogeneous lying costs, or a combination of lying costs and image concerns that give rise to a motivation to appear honest. [ABSTRACT FROM AUTHOR]

Public finance lies at the heart of politics. It shapes citizens' political attitudes and behaviors. While the expenditure side has been studied very extensively, the income side has been neglected, especially in authoritarian regimes. Taking China as an ideal case, we use a nation‐wide random sample of urban residents to study how citizens under strong authoritarian states perceive their tax burdens. We find that Chinese citizens have low tax consciousness, defined as the perception of fairness both in comparison to people they know and to the amount of public goods they receive. Citizens' income, the amount of public goods they receive, and media consumption have important effects on their tax perception. We argue that there are three mechanisms used by China's "half‐tax state" to reduce their citizens' tax perception: (1) reduce the salience of people's tax burden, conditional on their income level, (2) generate fiscal illusion effects while providing public services in return for taxes paid, and (3) use propaganda to shape the ideology of tax compliance. [ABSTRACT FROM AUTHOR]

Accurate and efficient valuation of property is of utmost importance in a variety of settings, such as when securing mortgage finance to purchase a property, or where residential property taxes are set as a percentage of a property's resale value. Internationally, resale based property taxes are most common due to ease of implementation and the difficulty of establishing site values. In an Irish context, property valuations are currently based on comparison to recently sold neighbouring properties, however, this approach is limited by low property turnover. National property taxes based on property value, as opposed to site value, also act as a disincentive to improvement works due to the ensuing increased tax burden. In this article we develop a spatial hedonic regression model to separate the spatial and non-spatial contributions of property features to resale value. We mitigate the issue of low property turnover through geographic correlation, borrowing information across multiple property types and finishes. We investigate the impact of address mislabelling on predictive performance, where vendors erroneously supply a more affluent postcode, and evaluate the contribution of improvement works to increased values. Our flexible geo-spatial model outperforms all competitors across a number of different evaluation metrics, including the accuracy of both price prediction and associated uncertainty intervals. While our models are applied in an Irish context, the ability to accurately value properties in markets with low property turnover and to quantify the value contributions of specific property features has widespread application. The ability to separate spatial and non-spatial contributions to a property's value also provides an avenue to site-value based property taxes. [ABSTRACT FROM AUTHOR]

Married couples can face a higher or lower tax burden than cohabitating couples with the same income when the former are taxed as one unit. I study the effect of such joint income taxation on the marriage rate in Switzerland, where tax differentials between married and cohabitating couples vary considerably across cantons. For this purpose, I construct a dataset containing sociodemographic and -economic variables on every individual living in Switzerland and use household-level information to identify cohabitating couples. Using a simulated instrumental variable approach, I find a negative impact of joint income taxation on the marriage rate for couples married between 2012 and 2019. The effect is driven by households without children and from the lower end of the income distribution. [ABSTRACT FROM AUTHOR]

In this study, we examine the relationship between value-added tax burden and export quality. Our results show that the increase of VAT burden leads to lower export quality. We also find that the decline in export quality may be caused by the decrease of product innovation. Moreover, the empirical evidence on patent application shows that VAT burden mainly reduces invention and utility model patents, instead of design patents. [ABSTRACT FROM AUTHOR]

In this work, our objective is to explain the decline in the income share of the middle class and the increase in the share of the wealthy - a global empirical phenomenon, commonly referred to as "The Elephant" (Lakner & Milanovic, 2013; Milanovic, 2016) - by examining the different life-cycle income paths of heterogeneous income classes and the varying tax burden on labor and capital income. The model investigates the diverse life-cycle paths and their nonlinear behavior among the income classes under scrutiny. This approach enables us to dynamically analyze the divergence in the income distribution using one of the more important models in economics: The life-cycle and permanent-income framework. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Stiftungswesen is the property of Verlag Oesterreich GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article investigates whether and how strongly the share of homeowners in a community affects residential property taxation by local governments. Different from renters, homeowners bear the full property tax burden, irrespective of local market conditions, and the tax is more salient to them. "Homeowner communities" may hence oppose high property taxes in order to protect their housing wealth. By merging granular spatial data from a complete housing inventory in the 2011 German Census with historical homeownership rates and housing damages during the Second World War as sources of exogenous variation in local homeownership, we provide empirical evidence that otherwise identical jurisdictions charge significantly lower property taxes when the share of homeowners in their population is higher. This result is invariant to local market conditions, which suggests tax salience is the key mechanism behind this effect. Moreover, we find positive spatial dependence on tax multipliers, indicative of property tax mimicking by local governments. [ABSTRACT FROM AUTHOR]

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article investigates the occurrence and outcomes of corporate tax-related political activity through bribery. Specifically, it examines the extent to which firms bribe government officials through gift-giving, banqueting, and entertaining activities and the extent of payoffs that firms gain from these bribery practices. Using a large hand-collected dataset of Chinese listed firms for the period from 2009 to 2014, I find that firms that spend more on consumption bribery exhibit a significantly lower tax burden. This negative association is mainly driven by small firms, non-state-owned firms, state-owned firms with weak political connections, and firms in competitive industries. Further evidence shows that the tax benefits from bribery are more apparent in more corrupt, less economically developed, and less liberalized regions. Furthermore, the payoffs of tax bribery are mitigated by 45.4% after the implementation of China's anti-corruption campaign in 2012. These findings have policy implications for governments to optimize investment environments and increase tax revenue by curbing power-for-money deals. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper analyzes optimal tax policy from the perspective of voters who want public policies to systematically advance their interests. Self‐acknowledged ignorance implies that voters have a practical interest in transparent and stable tax systems that allow personal tax burdens to be calculated accurately and easily. Such properties reduce voter mistakes. However, a voter's normative interests may conflict with these practical interests, because ideas about a good life or good society often support tax system complexity. Tradeoffs between these two aims of democratic tax systems imply that the optimal tax system for a democracy neither minimizes voter errors nor maximizes a social welfare function. [ABSTRACT FROM AUTHOR]

Copyright of Die Unternehmensbesteuerung (Ubg) is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article presents a substantiation of methods for assessing the impact of anthropogenic noise pollution for land taxation. Statistical analyses have been carried out in order to establish the dependence of the market value of land plots for residential development in St. Petersburg on noise pollution caused by transport infrastructure facilities. The obtained data allowed us to conclude that in the modern conditions of the imperfect market, the considered factor is externalized. When finding the dependence, it can be included in the economic–mathematical model of cadastral value determination as an internal factor of the market, thus ensuring the principle of fairness of taxation. The lack of market reaction dictates the need to internalize negative environmental externalities through state regulation of land redistribution or redistribution of the tax burden between land rightholders and rightholders of objects that create noise. [ABSTRACT FROM AUTHOR]

Shipping lines avoid tax burdens and policy requirements by registering their self-owned vessels in flag of convenience (FOC) countries and establishing subsidiaries in those countries. However, since the international tax system has been increasingly focused on substance, coherence, and transparency, the anti-tax avoidance rules may have affected the choice of registry for shipping lines. Based on the 900-ship registry data of the top 25 liners across 26 flag states over the period 2008 to 2019, this paper uses conditional logit and mixed logit models to examine the effect of anti-tax avoidance rules on the choice of registry for shipping lines. In this regard, the results indicate that introducing country-by-country reporting requirements and a common reporting standard will reduce the probability of shipping lines registering to flag in those countries. On the other hand, after imposing anti-tax avoidance rules, liners are more willing to register flags in countries with higher tax rates. The results of a regional analysis show that better tax performance exerts an adverse effect on flag choice of European shipping lines; however, it has the opposite effect on Asian shipping lines. [ABSTRACT FROM AUTHOR]

The article discusses a recent court case, GSS Holdings (Liberty) Inc. v. United States, which highlights the indistinct boundaries and challenges of applying the substance-over-form doctrines. The United States Court of Appeals for the Federal Circuit reversed the decision of the United States Court of Federal Claims, stating that the Claims Court had incorrectly conflated the step transaction and economic substance doctrines. The dissenting opinion argued that the substance-over-form doctrine should be applied instead. The article provides historical context on the development of these doctrines and explains their purpose in allowing courts and the IRS to reject a taxpayer's characterization of a transaction that seeks unintended tax benefits. [Extracted from the article]

Following the release of the proposed regulations on the requirements and procedure for transferring federal income tax credits under the Inflation Reduction Act of 2022 on June 14, 2023, the market for selling and purchasing tax credits became more active. This article discusses important considerations for prospective tax credit purchasers who are looking to enter the tax equity market. [ABSTRACT FROM AUTHOR]

Rising wealth inequality and squeezed public budgets has brought wealth tax back into policy discussions. A net wealth tax might help to boost state revenue and reduce wealth inequality. Yet little is known about citizens' attitudes towards the design of a net wealth tax (i.e. the tax unit, exemption and rate). Using a novel multifactorial survey experiment, we examine citizens' endorsement of fundamental principles of taxation. Building on policy feedback theory, we examine if preferences differ in three policy arenas (USA, Germany and UK) and whether individuals' reasoning is dependent on self-interest. While a clear majority in all three countries generally endorses a wealth tax, our findings show that citizens care more about the amount exempted than the tax unit or rate. We do not identify a preference for any specific tax unit. Furthermore, tax preferences seem to be strikingly similar among citizens of all three countries. Yet we show that individuals are mostly concerned about not being personally affected by such a tax, which is reflected in their preference for substantial exemptions. We discuss our findings with regard to our understanding of wealth inequality, tax equity and the potential implications for policymakers. [ABSTRACT FROM AUTHOR]

This quantitative study investigates the taxpayers' perceptions of tax evasion. The tax evasion determinants were considered as institutional, economic, socio-psychological, and political and legal factors. Using a 5-point Likert scale, this study looked at 436 medium-sized entrepreneurs in the Colombo district to determine the most influential determinant of tax evasion. The survey responses were gathered through a questionnaire. The results show that socio-psychological and economic factors have a significant and negative impact on medium-sized taxpayers' income tax evasion behaviour while institutional and political and legal factors have a weak association on tax evasion. The findings show that tax evasion is influenced by socio-psychological factors such as fairness of the tax system, moral obligation, and social influences, as well as economic factors such as tax rates, penalties, audit, and taxpayer privileges. The results highlight that in the Sri Lankan context, socio-psychosocial factors are regarded as a very crucial determinant that impacts individual income tax evasion. In addition, it offers insight into the influence of gender of business owner on tax evasion behaviour. Results suggest that mediumsized taxpayers' tax evasion behaviors could be changed if tax policy decisions contemplate more on taxpayer's psychological condition and affordability to pay tax. Distributing the tax burden to a greater number of taxpayers will help to increase tax compliance. [ABSTRACT FROM AUTHOR]

This paper studies commodity taxation in a model featuring heterogeneous consumers, imperfect competition, and tax salience. We derive new formulas for the incidence and marginal excess burden of commodity taxation highlighting interactions between tax salience and market structure. We estimate the necessary inputs to the formulas by using Nielsen Retail Scanner and Consumer Panel data covering grocery stores and households in the U.S. and detailed sales tax data. We estimate a large amount of pass-through of taxes onto consumer prices and find that households respond more to changes in prices than taxes. We also estimate significant heterogeneity in tax salience across households. We calibrate our new formulas using these results and conclude that essentially all of the incidence of sales taxes falls on consumers, and the marginal excess burden of taxation is larger than estimates based on standard formulas that ignore imperfect competition and tax salience. [ABSTRACT FROM AUTHOR]

We use firm-level data from a Colombian manufacturing survey, complemented with data from the tax department, to test the effect of firms' total tax and contribution rate (TCR) on the ratio of innovation expenditures to sales. We construct a data panel from 2003 to 2018 comprising 104,762 observations and implement fixed effects and instrumental variables estimation methods. Our results suggest that an increase of one percentage point in direct taxation leads to a decrease of 0.10% in the probability that firms engage in innovation investments, and market power moderates this effect. We discuss distinctive features of the effect of taxation on innovation in emerging economies—one being the inability of local innovation clusters to temper it. Policy implications include considering modifications to the magnitude and composition of the TCR as an alternative to R&D tax credits. [ABSTRACT FROM AUTHOR]

Income inequality is high and persistent in developing countries. In this paper, we ask what role taxation can or might play in reducing inequality in low and middle-income countries. Drawing on the recent literature, three findings emerge. Due to both structural factors and limited enforcement capacity, the effective distributional impacts of taxes often deviate from their 'statutory' objectives, in ways that are hard to predict based on evidence from high-income countries. Moreover, administrative reforms which are meant to be distributionally neutral end up having significant equity impacts because of the practical realities of implementation. Finally, the global challenges which tax authorities face to tax the very top of the income distribution appear to be even more pronounced in developing countries. We conclude by offering thoughts on future research and emphasize the need to carefully study equity characteristics of taxes at each stage of a country's development path. [ABSTRACT FROM AUTHOR]

Estimating effective VAT rates (EVATR) of industries to assess their tax burden and efficiency has drawn much interest in policy research; but the challenge is the lack of industrial Output VAT data. We develop a novel method to recover all VAT statistics at the industry level and endogenously solve EVATR from publicly available data by utilizing input-output relationship in a Computable General Equilibrium (CGE) structure. We apply the method to China's data, estimate EVATR, and analyze implied tax efficiency and the tax burden of individual industries. Our study identifies true reasons for "VAT over-taxation" in some Chinese industries: China's multiple-tier VAT rate system with unrefunded Input VAT and the accounting inconsistency between taxation and national accounts. [ABSTRACT FROM AUTHOR]

Consumers rarely understand contracts offered by sellers. It does not make sense for consumers to invest in understanding these contracts because they are typically complex, time and attention are limited, and the value at stake is often low. Because consumers don’t understand contracts and information sharing among consumers is costly, sellers can profit by drafting contracts that harm consumers more than they benefit sellers. Sellers who would like to offer efficient contracts face competitive pressures not to do so because consumers who do not understand contracts cannot appreciate the benefits. Ideally, contracts would be simpler and easier to understand, but regulators don’t know the optimal complexity for each contract. Sellers know the value of the contract, but do not internalize the costs of complexity. To the contrary, sellers can benefit from making contracts more complex than necessary to obscure anti-consumer terms. This article proposes a new solution to this famous problem: a tax that sellers would pay to present a contract to consumers, coupled with a subsidy to consumers who comprehend contracts and share information. The tax would be proportionate to the cost consumers would incur if they invested in comprehending the contract. It would be assessed wheneversellers presented a contract, regardless of whether or not consumers signed. We show that this tax and subsidy solution would cause sellers to make their contracts simpler to reduce their own tax burdens. Thus, sellers would internalize the comprehension costs that they can currently impose on consumers. We demonstrate that sellers can be compelled to forego strategic obfuscation if this tax is paired with a subsidy to encourage consumer comprehension and information sharing. This tax and subsidy pairing would penalize inefficient contracts while minimizing the burden on efficient contracts. Inefficient contracts would thereby become financially unsustainable. [ABSTRACT FROM AUTHOR]

This study examines the influence of the reduction in value-added tax (VAT) rates in China during 2018 and 2019 on corporate financialization. By employing a difference-in-differences model and utilizing data from Chinese A-share listed companies between 2017 and 2020, we assess the effects of tax reduction policies. Moreover, it achieves this outcome through three main pathways: alleviating financing constraints, boosting fixed asset investment, and weakening corporate financial arbitrage motives. Further analysis demonstrates that the inhibitory effect of VAT rate reduction on corporate financialization is more pronounced for non-manufacturing companies, businesses reliant on the basic tax rate as their primary revenue source, companies with low intermediate input rates, and those with a strong ability to shift the tax burden. Additionally, debt financing costs play a crucial role in moderating the relationship between tax reduction policies and corporate financialization. The conclusions drawn from this study provide valuable empirical evidence that can contribute to the refinement of VAT reduction policies and the prevention and resolution of financialization at the micro-level. [ABSTRACT FROM AUTHOR]

Carbon Capture, Utilization and Storage (CCUS) is a technology for capturing man-made CO2 emissions (carbon emissions) and either storing them, hopefully permanently, underground, generally in suitable saline formations or oil and gas fields, or utilizing them by, eg, converting them into commercially viable products. Because global energy demand and carbon emissions will continue to increase until 2050 by almost 50 per cent, CCUS projects (despite a current difficult business case per metric tonne stored or used), if deployed on a large scale, could help the world to limit global warming to 2.0°C, but preferably 1.5°C, as proposed by the Paris Agreement. For economic reasons, without government support, it will be difficult to have the required number and scale of CCUS projects to tackle global warming. The introduction section of this paper explains how, if we accept the urgency of the Paris Agreement's thresholds, there is probably not sufficient time for introducing a global emissions trading scheme (ETS) or a global carbon tax, which are considered the two best approaches to reducing carbon emissions. The CCUS legal/regulatory/fiscal approach section analyses, first, the different legal/regulatory/fiscal approaches to CCUS taken by the US and the EU, secondly, the US federal tax credits available for CCUS projects as of May 2022, and thirdly, the powerful incentive mechanism created when the US CCUS tax credits work together with tax equity partnerships. The US CCUS tax credits and tax treaties section, after some initial literature review of tax incentives and how the US CCUS tax credits can be framed within the panoply of tax incentives, focuses on the first research question, ie, on understanding how the US CCUS tax credits interact in a tax treaty environment. The US CCUS tax credits and the BEPS project section plays a similar role in relation to whether the US CCUS tax credits align well with the requirements of the OECD/G20's Base Erosion and Profit Shifting (BEPS) Project, which is aimed at reducing tax avoidance and is more recent in its development. The last section concludes. [ABSTRACT FROM AUTHOR]

The structure of taxes and their burden have undergone large and frequent changes over time. We provide a brief history of U.S. federal income tax reform since the 1960s, calculate effective federal income tax rates for each wave of the Panel Study of Income Dynamics, and discuss how effective taxation changed from 1969 to 2016. We show that most tax regimes are short-lived and that the variation in taxes over time and across groups is large. We also use an estimated dynamic model of couples and singles to show that the various tax regimes that we estimate imply very different labor market and saving behavior. These findings stress the importance of studying and modeling tax changes over time and across groups. [ABSTRACT FROM AUTHOR]

Deferred income taxation is widely used to encourage investment or saving. However, most income tax bases are more or less distortive (non-neutral). Using lab experiments, we find that the deferral of a distortive income taxation can result in substantial overproduction and less willingness to take risks. Subjects underweight the deferred tax burden and neglect the tax distortion because they act myopically and tend to make choices in isolation rather than simultaneously (choice bracketing). Despite opportunities to learn, the overproduction remains substantial. Additional analyses confirm that the observed misperception of deferred taxes is not caused by low tax salience or low effort, as providing additional accounting information on deferred taxes and introducing accountability reports do not change overproduction behavior. Only if we change the timing of the taxation from deferred to an economically equivalent immediate distortive tax system do overproduction and the effect on asset allocation almost disappear. [ABSTRACT FROM AUTHOR]

Tax evasion operates beyond the boundaries of the jurisdictions, it develops across borders, and the extent of tax fraud as a phenomenon is differentiated according to the aspects and the rigours of legislation, as well as according to the economic environment of each country in part. Regardless of the level of development of the country in which it manifests, the effects of the fiscal fraud are destructive, affecting both the state budget, as well as the financial resources of the offenders' commercial partners. The fiscal fraud has negative effects over the economic market, and one of the consequences is the social inequality from the perspective of the abuse and the predisposition of certain taxable subjects to fraud. Certainly, the phenomenon remains unraveled, the financial schemes being extremely complex, and the fraud mechanisms are some of the most laborious ones and in a permanent improvement, while the evaders keep finding new means by way of which they illegally attract financial resources. The fight against tax evaders is a difficult one, mainly because of the sometimes "deliberate" legislative "loopholes", but also because of their ingenuity, which is often "one step" ahead of those who fight against tax evasion. [ABSTRACT FROM AUTHOR]

This paper examines whether the status of the financial statement audit, as either voluntary or mandatory, is related to the corporate tax avoidance behaviour of private firms. Using the Swedish audit regime shift in 2010 which removed mandatory audit requirements for small private companies, we find that voluntarily audited firms exhibit a 19% decrease in total income tax burden relative to firms subject to mandatory audit following the regulatory change. This decrease corresponds to an average SEK 15,000 (approximately 1,500 euros) lower tax payment and is driven primarily by increasing conforming tax avoidance. We also find that increasing tax avoidance in voluntarily audited firms occurs, at least partly, due to impaired auditor independence under the voluntary audit regime. Finally, we show that the non-tax costs of tax avoidance restrict these tax-driven reporting changes. Our findings contribute to the literature on auditors' constraining effect on corporate tax avoidance as well as to the debate over the costs and benefits of a mandatory financial statement audit regime. [ABSTRACT FROM AUTHOR]

The NSW Government's 2020 proposal to replace stamp duty on all properties with an annual tax based on unimproved land values is estimated to increase home ownership by 6.6%, through changes in purchaser holding periods, a shift of tax burden from investors to owner‐occupiers and a relaxed deposit constraint. The model of home ownership highlights the importance of purchasers' holding periods, with implications for the effects of tax reforms, institutional ownership of rental properties and population growth. The paper provides an easily calibrated model of home purchases that could be used to quantify home ownership effects of various tax reforms. [ABSTRACT FROM AUTHOR]

It is of great practical significance to analyze the differences of actual tax burden value-added tax (VAT) from the perspective of industrial linkage for accelerating the construction of a modern industrial system and promoting the formation of a new development pattern. This paper explains the differences and causes of the actual VAT tax burden in the manufacturing industry from the perspective of industrial linkage. According to the research results, the closer the intermediate input connection between an industry and other industries, the lower the actual VAT tax burden it bears. The characteristics of production network have a moderating effect on the relationship between the linkage of the manufacturing industries and the actual VAT tax burden. For the industries in the center of the production network, a stable backward linkage weakens the influence of industrial linkage on their actual tax burden. It is difficult for industries located in the spillover block to reduce their tax burden by adjusting the linkage of intermediate goods. In addition, highly linked manufacturing enterprises can also reduce their actual VAT tax burden by tax avoidance, tax shifting, adjusting the types of intermediate inputs and so on. Smoothing the domestic production network of the manufacturing industry and optimizing the VAT burden bearing mechanism of each manufacturing sub-industry will help promote the stable growth of the manufacturing industry and healthy development of the macro economy in China. [ABSTRACT FROM AUTHOR]

People value healthy ageing but may underinvest in health‐improving preventive care. This arises when they ignore the beneficial effects of healthy ageing on public health expenditures and hence on the tax burden of future generations. This health externality justifies public intervention. We build an overlapping generations model with a government subsidizing investment in health by the young generation and paying the health care costs of the old generation. We find that the welfare‐maximizing subsidy rate depends positively on the health externality and the size of health care costs, and negatively on the discount factor. The subsidy rate should therefore be high when prevention is cost‐effective and when the population is careless about the future. Moreover, the welfare‐maximizing subsidy rate is lower than the health‐maximizing rate but higher than the capital‐maximizing rate. This underlines the trade‐off for a policy maker between health and economy. [ABSTRACT FROM AUTHOR]

SYNOPSIS: The Medical Device Excise Tax (MDET) enacted a 2.3 percent tax on domestic sales of certain medical devices. Medical device firms suggested the tax would reduce profitability, leading to cuts in employees, research and development, and capital expenditures. However, we find that medical device firms engaged in more income tax avoidance in response to the MDET. Furthermore, medical device firms with high income tax avoidance made no significant cuts to investment spending or employees, whereas firms with low income tax avoidance significantly decreased investment spending and employees. Our findings suggest that some medical device firms used income tax avoidance as a substitute for reducing investment spending. Our results serve to inform both researchers and policymakers regarding the interplay between non-income taxes and income tax avoidance. [ABSTRACT FROM AUTHOR]

SYNOPSIS: We provide evidence that enterprise resource planning (ERP) systems are potentially beneficial to firm decision-making but can also have unintended effects. The tax function is one of the largest consumers of data within a firm, with over 50 percent of time spent gathering tax data and less than 30 percent of time spent on strategic data analysis (PricewaterhouseCoopers (PwC) 2015). Difficulties in getting high-quality, timely tax information could negatively impact a firm's tax compliance activities and leave few resources for tax planning. Following the absorptive capacity theory, we predict and find that ERP systems are associated with a greater degree of tax planning post-adoption, resulting in lower tax burdens. However, we also note increased firm discretion in tax planning, resulting in a larger amount of aggressive tax positions. Practically, our findings have important implications for the use of ERP systems both within the tax function and across other decision-making areas. JEL Classifications: O33; H26; D83. [ABSTRACT FROM AUTHOR]

Purpose: The aim of our research is to assess the impact of public debt on tax burden within the member countries of the European Union (EU) during the period from 1995 to 2021. Methodology: The assessment of the impact of the public debt on the tax burden was implemented in two stages. Each of them uses two modifications of the model. Our methodology is based on multiple regression models. Findings: Our research findings suggest a dual impact of public debt on the tax burden: a reduction in the current period followed by an increase in future periods. Additionally, our study has unveiled that the influence of public debt on the tax burden is contingent upon the specific level of public debt being considered. Our findings confirmed that when public debt reaches a critical threshold of 55.88 percent of the GDP, any further government borrowing is associated with a consequent augmentation of the tax burden. Originality/value: Our analysis includes lagged variables to empirically examine whether public debt can possibly result in a higher tax burden in the future. In our study, we explore whether there exists a particular level of public debt at which the influence of public debt on the tax burden fundamentally changes direction. [ABSTRACT FROM AUTHOR]

In 2017, the Gulf Cooperation Council (GCC) member countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE)) ratified the Unified Value Added Tax (VAT) Agreement, which set out the general principles for imposing VAT and mandated each GCC member state to introduce a VAT by January 2018. Four GCC countries have so far introduced VAT, namely, Saudi Arabia, UAE, Bahrain and Oman. None of these countries possess a mature tax system. In fact, they also lack a well-defined tax culture and tax morale, and their tax administrations are not yet well developed. Thus, the introduction of VAT could give rise to a serious issue regarding VAT compliance burden. In this context, this article aims (i) to examine the new VAT in the four GCC countries, and (ii) to compare qualitatively the likely VAT compliance burden among these four countries, and relative to other VAT-imposing countries, specifically member countries of the Forum on Tax Administration (FTA). We adopt the VAT Diagnostic Tool approach, which has been developed by an Australia-based research team and applied successfully to assess VAT compliance burden in FTA countries. The findings of the article suggests that while the four GCC countries belong to the medium VAT compliance burden group, they compare very favourably with FTA countries. More specifically, they perform above the FTA average in minimising compliance burden that arises from VAT policy complexity and administration complexity, but below FTA average in terms of revenue capabilities in meeting taxpayer service and compliance needs. A small number of policy recommendations are proposed with a view to maintaining or improving the good performance of GCC countries in terms of VAT complexity. They include: (i) formal recognition of the importance of tax system simplicity; (ii) use of VAT Diagnostic Tool Factors/indicators in guiding the design or simplification of VAT policy and administration; (iii) restraint from making VAT policy and administration changes without supporting evidence, and (iv) capacity building in tax administration. [ABSTRACT FROM AUTHOR]