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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]

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]

With the increasing requirements for environmental protection, authorities have enacted different carbon policies to promote sustainable practices. This study considers the competition among different manufacturers and multiple demand markets in the supply chain network. We examine and compare their equilibrium decision conditions under three common carbon policies: carbon cap, carbon cap‐and‐trade, and carbon tax. Results suggest that under lower carbon caps, manufacturers greatly reduce their carbon emissions by reducing production quantities, which causes a decrease in profits. However, an appropriate carbon cap size can not only motivate manufacturers to reduce carbon emissions but also improve their profits. Under a certain price for carbon credit, the effectiveness of a carbon cap‐and‐trade policy is similar to that of a carbon cap policy, but it has more flexibility. Carbon tax is effective, but it brings more tax burden to manufacturers. We provide implications for companies to optimize their production methods to achieve sustainability. [ABSTRACT FROM AUTHOR]

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]

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]

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]

This study examines how an important reform of local governance—village democracy—in the world's most populous areas has affected the happiness of residents in rural China. We find that introducing elections per se has no significant impact. In comparison, direct nomination of local leaders by villagers, which is a form of competitive election involving a high degree of public participation in political decision making, leads to higher levels of happiness. Further mechanism analyses show that direct nomination improves the local accountability of elected leaders by boosting the quality and effort of village heads and their governance performance by lowering the tax burden of villagers and vitalizing local public services. Our results highlight the importance of public participation in democracy and the underlying role of local accountability in affecting the subjective well‐beings of citizens. [ABSTRACT FROM AUTHOR]

Summary: Motivation: In recent years, governments in low‐income countries have increasingly introduced taxes on mobile money transfers. These are often explicitly promoted as a way of taxing informal economic activity, but critics have noted their potential negative impact on lower‐income groups and specifically those in the informal sector. Yet there is virtually no evidence base on the effects of mobile money taxes on informal workers. Purpose: This article assesses how informal workers in Accra, Ghana, use mobile money and how they perceive Ghana's Electronic Transfer Levy (E‐levy), introduced in May 2022. This provides a particularly interesting case study to explore the equity implications of the tax, as the policy was explicitly justified as a way of taxing the informal economy but also includes measures to limit the tax burden on lower‐income groups. Methods and approach: The article uses data from a survey of 2,700 self‐employed informal workers in the Accra Metropolitan Assembly to capture citizen perceptions of the policy and to examine the likely impact of the E‐levy on informal workers with reference to equity. Findings: Overall, our results suggest that the E‐levy is highly regressive. Further, we show that most informal workers disapprove of the E‐levy, reflecting not just concerns about its equity impacts, but also disappointment with the government's performance. Policy implications: Our findings suggest that taxes on digital financial services should be reconsidered from an equity perspective. While some policy measures, including those undertaken in Ghana, can protect low‐income earners, they are often insufficient to counteract overall regressive impacts. Where they are implemented, social spending from the revenue from these taxes should target low‐income populations in the informal economy, while governments should focus on building trust among informal workers with regard to revenue raising and spending. [ABSTRACT FROM AUTHOR]

The UK Wealth Tax Commission website and the I Fiscal Studies i symposium on the wealth tax provide a fantastic set of evidence papers on wealth tax design in theory and in practice, drawing on the experience of seven different countries. They conclude that the case for the one-off wealth tax is simple to make (because the opportunities for a one-off tax, implemented promptly, to distort economic activity are limited), but the case for an annual wealth tax is more difficult - though not impossible - to make based on economic theory (in part, because of the greater scope for economic distortions in response to a recurrent tax). While wealth taxes in the past had ceiling mechanisms, such that the wealth tax liability could not exceed a fraction of income, Zucman suggests that such mechanisms are not needed if the wealth tax is applied only above a very high exemption threshold. Keywords: personal income tax; corporate income tax; wealth tax; tax avoidance and evasion; automatic exchange of information; global minimum tax; high-net-worth individuals; inequality EN personal income tax corporate income tax wealth tax tax avoidance and evasion automatic exchange of information global minimum tax high-net-worth individuals inequality 237 241 5 09/26/23 20230901 NES 230901 In his paper "Globalisation, taxation and inequality" in this issue, Gabriel Zucman argues that the current tax system is not appropriate for our times. [Extracted from the article]

We investigate the effect of property taxes on households' rental income by exploiting regional variations in the introduction of property taxes in China in 2011. Using the propensity score matching combined with a difference‐in‐differences approach, we find that the rental income of households in pilot areas significantly increased after 2011. Hence, homeowners tend to shift the potential property tax burden to tenants. Additionally, this positive effect is driven by the extensive margin, rather than the intensive margin. Our finding is robust to various alternative specifications and subsample analysis. We then adopt a triple‐difference model to show that the effect varies considerably across households that own residential premises in different regions and with different property characteristics. [ABSTRACT FROM AUTHOR]

Tax and expenditure limits (TELs) are restrictions placed on governments limiting their ability to collect and spend revenue. Residents support these TELs, as they desire lower tax burdens and more government efficiency; yet, residents still desire the same level of public services. Property tax rate limits, a specific type of TEL, are placed upon local governments to limit their ability to collect revenue and expand authority. Rate limits were implemented on the assumption that governments would tax at their highest maximum possible rate, but this is not always the case. This article studies why some local governments choose not to utilize their maximum allotted property tax rate. Using an open systems governance approach, a panel data analysis was conducted using data from 67 Florida counties from 2008 to 2017. Results of the analysis show that the use of special districts and the age of the residential population have significant effects on property tax rate decisions. [ABSTRACT FROM AUTHOR]

The first is by Anne Brockmeyer and David Phillips who was the organiser of the policy session on global tax equity at the World Bank conference in which senior tax officials from Honduras, Indonesia and Argentina discussed specific issues with improving tax equity in their national contexts. It featured discussions of recent research on making tax systems more equitable at a global scale, including the taxation of high-net-worth individuals, including wealth taxation; tax transparency, beneficial ownership, offshoring and tax havens; and taxes on multinationals and large corporations. Keywords: inequality; globalisation; tax EN inequality globalisation tax 225 227 3 09/26/23 20230901 NES 230901 As inequality has risen around the world, the importance of tax design for achieving equity objectives has become increasingly widely discussed and is the focus of much recent public finance research. [Extracted from the article]

The article aims to investigate the use of cross‐border mergers in worldwide constellations as a strategy for receiving tax‐optimized profit repatriation from foreign subsidiaries. The study is carried out on the basis of an exemplary case study of a cross‐border merger. Moreover, theoretical, analytical, and conceptual research methods used. The findings and implications are of general interest, since a cross‐border merger is in principle possible worldwide and not only in certain country constellations. Generally, the results of the study apply to any cross‐border merger, for example, also to a merger of any EU corporation into a foreign parent company irrespective of its residence. The results show that multinational firms can use cross‐border mergers as a stable strategy to obtain tax‐optimized profit repatriation from foreign subsidiaries and to optimize the group tax rate. This general strategy worked out in the article solves an essential and widespread problem for investments in foreign subsidiaries, namely how to repatriate the retained profits of foreign subsidiaries without triggering an excessive tax burden. A comparable strategy has not yet been found or developed in the literature. Consequently, there is no literature on the possibility of using cross‐border reorganizations as a strategy for a tax‐optimized repatriation of profits. [ABSTRACT FROM AUTHOR]

Homeowners who make their homes their primary residence have resisted the entry of rentals into their neighborhoods and cities. Possible reasons underlying this resistance are that rentals reduce the property values, increase the property tax burdens, and raise the price of public services for these homeowners. We relate the market values of single‐family homes occupied by permanent homeowners, the effective property tax rate of these homeowners, and the tax price they pay for public services to shifts in their city's housing units toward a variety of different types of rentals and second homes. Our analysis is based on large panels of Florida homes containing hundreds of thousands and millions of observations. Our results show that increases in the share of a city's housing units used as rentals or second homes reduce the home values, increase the property tax burdens, and raise the public services prices of homeowners who permanently reside in single‐family homes. Impacts vary in magnitude among single‐family, condominium, and mobile homes used as rentals and second homes. Estimated impacts are the strongest for share increases in single‐family rentals and second homes. [ABSTRACT FROM AUTHOR]

Pillar 2 of the OECD's global tax reform proposal will have significant direct and indirect impacts for low‐income developing countries (LICs). Most interesting and problematic is the question as to how the global anti‐base erosion (GloBE) rules for a proposed global minimum effective tax will affect tax competition behaviour in LICs, and how LICs should respond when a critical mass of higher‐income economies adopt the new structure. Most LICs are source‐only countries, and they are very much in competition to attract foreign direct investment. Do LICs want to continue to compete using the tax system to the extent possible, to step back from that competition, or to take some intermediate course? Pillar 2 does not itself change a country's desired position on the competition spectrum – it merely affects how, and to what extent, that position can still be obtained. This paper posits that LICs should adopt qualified domestic minimum top‐up taxes, and that this will not itself have a negative impact on their competitiveness. The primary focus of the paper, however, is on the design of the substance‐based income exclusion (carve‐out), examining the following three questions. Should the GloBE have been designed without a carve‐out? Would there have been a better way of designing it? How will LICs be affected? The paper concludes that, as little real advantage is likely to accrue to LICs from intangible assets, minimising tax competition for those assets will have relatively little impact on them; and that, from an economic efficiency standpoint, shifting the tax burden away from a normal return and toward economic rents – albeit imperfectly – is a reasonable solution. [ABSTRACT FROM AUTHOR]

As saliency of the tax burden increases, the preference for a lower burden increases, but most counties are restricted by the state from adopting new taxes or changing the existing rates. Some states allow counties to adopt a charter, freeing them from state control. Using a panel of Florida counties from 1980 to 2017, we explore whether citizens act to reduce their property tax once a charter is passed. Citizens act against their preferences not by lowering burden but rather by increasing it in the case of debt service, suggesting citizens are maximizing their optimal tax burden in exchange for services. Applications For Practice: The passage of a charter impacts the county's fiscal policy space.Citizens did not lower their total millage and operating millage rates after the passage of a charter.The presence of a charter was tied to increases in the tax burden of debt service.Citizens are not choosing to maximize their income by reducing their burden, but rather they are adjusting or expanding the public services provided by a county government. [ABSTRACT FROM AUTHOR]

We construct a sample of firms in 36 countries with 158 elections to examine corporate tax behavior in the face of political uncertainty. We define political uncertainty as unmeasurable unpredictability regarding governmental policies or regulatory shifts, such as tax rates, tax enforcement and general economic conditions, emanating from a possible change in political leadership. If insufficient information exists to develop plausible expectations about future tax‐related outcomes, ambiguity‐averse managers will attend to relatively more pessimistic priors and assume the worst‐case scenario. We expect firms to increase tax avoidance in election years given uncertainty regarding the post‐election tax and macroeconomic environment. Our results are consistent with this argument. Firms increase their corporate tax avoidance in election years, consistent with managers exercising current tax planning strategies while it is still most optimal to do so given post‐election uncertainty. The effect is increasing in the political uncertainty associated with the election. Specifically, for elections that are closely contested, representing uncertainty regarding the victor, or held in countries with fewer electoral checks and balances, representing uncertainty regarding the ease of effectuating potential post‐election changes. We document increased reshuffling of tax burdens across firms after elections, further supporting that elections reflect periods of heightened tax uncertainty. [ABSTRACT FROM AUTHOR]

Previous research has shown that in the context of a prototypical New Keynesian model, more progressive income taxation may lead to higher volatility of hours worked and total output in response to a monetary disturbance. We analytically show that this business‐cycle destabilization result is overturned within an otherwise identical macroeconomy subject to impulses to the household's utility formulation. Under a continuously or linearly progressive fiscal policy rule with the symmetric‐equilibrium tax burden unchanged, an increase in the positive level of tax progressivity will always raise the degree of equilibrium nominal‐wage rigidity, and thus serve as an automatic stabilizer that mitigates cyclical fluctuations driven by preference shocks. [ABSTRACT FROM AUTHOR]

The US has experienced a joint decline in corporate tax rates and startup rates in recent decades. We study how changes in corporate taxes affect startup rates in a firm dynamics model with occupational choice. A change in profit taxes has ambiguous effects on firm selection, and therefore on the startup rate. Quantitatively, the observed fall in US corporate tax rates generates, at most, one‐fifth of the startup rate decline. Sensitivity analysis suggests that this number is best interpreted as an upper bound, indicating that corporate taxes did not play a major role in the startup rate decline. [ABSTRACT FROM AUTHOR]

In this paper, we analyse the impact of the implementation of a child tax credit in Austria in 2018. We combine microsimulation techniques, labour supply modelling and dynamic general equilibrium modelling to make an ex ante evaluation of the reform, accounting also for behavioural responses of individuals. We show that although the macroeconomic effect of the Austrian reform is expected to be relatively small, accounting for feedback effects on a micro‐level is very important, especially when analysing socioeconomic and policy‐relevant indicators, such as poverty and inequality. When focusing on the distributional implications and the impact on poverty, our analysis highlights that the first‐round effects of the child tax credit substantially underestimate the increase in household income for households with children. Additionally, we find that when accounting for second‐round effects, the loss in tax revenues is partly offset. The estimated self‐financing effect of the reform is estimated to be about 13 per cent. Our results also indicate that part of the associated tax decrease can be potentially captured by the employer, meaning that gross wages are expected to fall slightly. Therefore, in the medium term, some households without children might suffer a small reduction in their disposable income. Overall, our analysis highlights the importance of accounting for second‐round effects when analysing tax reforms ex ante. [ABSTRACT FROM AUTHOR]

The purpose of this article is to better understand the architecture of social protection as a complex and evolving system in contemporary societies. To achieve that goal, we establish an inventory of 65 socio‐fiscal expenditures or social tax expenditures (STEs) of Quebec's (Canada) personal income tax system. These include tax expenditures related to social protection insofar as they contribute in one way or another to the protection against major social risks, the improvement of living conditions and to the fight against exclusion and social inequalities. STEs were selected taking into account the objective pursued (supporting income, promoting pensions, helping employment, recognising family responsibilities, encouraging education, pursuing a specific social objective, and promoting tax equity) and the type of tax break (tax credits, exemptions, etc.). The classification reveals the extent of recourse to taxation as a complementary tool for public intervention in the field of social protection. [ABSTRACT FROM AUTHOR]

The objective of the paper is to study how the tax burden arising from an exogenous stream of public expenditures and transfers should be distributed between labor and capital in a scale‐less endogenous growth model, where the engine of growth are successful innovations. Our laboratory is a prototypical quality ladder model with a labor/leisure choice where research and development productivity is decreasing in the size of the economy. Our contribution is to show that even when labor supply has no effects on growth in the long run, it will still be optimal to tax capital for reasonable parametrizations of the model. [ABSTRACT FROM AUTHOR]

The Healthcare sector is increasing in importance and relative size in BRICS countries (Brazil, Russia, India, China, South Africa). Despite BRICS relevance, the financial performance of their healthcare companies has been scarcely studied. This research fills this literature gap not only by focusing on the impacts of such diverse business environments on the financial performance of healthcare providers but also by proposing a novel approach to estimate an overall financial performance index based on weighted additive utility functions given a set of financial performance criteria. Precisely, bootstrapped Singular Value Decomposition is the cornerstone for identifying an orthogonal base of rotated financial performance criteria, upon which partial utility functions (PUFs) are estimated using locally estimated scatterplot smoothing (LOESS) polynomial regression. A compromise weighting scheme between singular values and quadratic programming results for minimal covariance and joint entropy matrices of residuals was used for summing up the PUFs. Results indicate that the values of financial performance range between 0.7 and 0.85. We further find that current assets, level of debt and liability, the company's Tobin Q are related to the financial performance. Besides, business freedom, government integrity, tax burden, monetary freedom and government spending are also the determinants of financial performance. [ABSTRACT FROM AUTHOR]

To generate sufficient foreign exchange earnings for economic transformation, Ghana needs to expand its export base. This study analysed Ghana's bilateral export potential and gap using the stochastic frontier gravity model for a panel of 61 key trading countries over the period 2000–2018. The results show a mean untapped export potential of US$1.1 billion and a mean gap of US$1 billion for Ghana. The tax burden of trading partners, poor infrastructure and low credit to the private sector limit the exploitation of Ghana's bilateral export potential. On the basis of these findings, it is recommended that the government and policy‐makers of Ghana should increase investment in trade‐related infrastructure, provide reliable and affordable electricity supply, deal decisively with corruption and negotiate for the elimination of all forms of barriers to increase export flows. [ABSTRACT FROM AUTHOR]

Summary: In 2016, the South African government proposed a 20% sugar‐sweetened beverage (SSB) tax. Protracted consultations with beverage manufacturers and the sugar industry followed. This resulted in a lower sugar‐based beverage tax, the Health Promotion Levy (HPL), of approximately 10% coming into effect in April 2018. We provide a synthesis of findings until April 2021. Studies show that despite the lower rate, purchases of unhealthy SSBs and sugar intake consumption from SSBs fell. There were greater reductions in SSB purchases among both lower socioeconomic groups and in subpopulations with higher SSB consumption. These subpopulations bear larger burdens from obesity and related diseases, suggesting that this policy improves health equity. The current COVID‐19 pandemic has impacted food and nutritional security. Increased pandemic mortality among people with obesity, diabetes, and hypertension highlight the importance of intersectoral public health disease‐prevention policies like the HPL, which should be strengthened. [ABSTRACT FROM AUTHOR]

Global value chains (GVC) have propelled substantial expansion in international trade across the globe over the last two decades. Yet, the institution–GVC nexus in Africa suffers complete neglect in literature. Therefore, we evaluate the impact of different components of political and economic institutions on backward (BWDGVC), forward (FWDGVC), total GVC participation, and GVC position (upstreamness) in Africa. Using system‐GMM with United Nations Conference on Trade and Development GVC database (UNCTAD‐Eora MRIO) for 47 African countries over the period 2000–2018, the key findings show that the effects of the political and economic institutions on GVC participation are diverse. Specifically, property rights, government spending, monetary freedom, and tax burden negatively affect BWDGVC participation while government integrity, investment freedom, and financial freedom stimulate the BWDGVC. Also, all the components of institutional quality that propel BWDGVC, hinder FWDGVC participation and upstreamness, except investment freedom which promotes both BWDGVC and FWDGVC. Nonetheless, property rights, government integrity, monetary freedom, financial freedom, and tax burden engender total GVC participation, whereas government effectiveness, and investment freedom hinder the total GVC participation. Furthermore, good political institutions promote BWGVC and total GVC but reduce upstreamness. Thus, institutions are fundamental drivers of GVC participation in Africa. [ABSTRACT FROM AUTHOR]

Existing studies highlight the importance of the compensatory demand among the conscripted poor to explain why wars lead to income and inheritance tax hikes for the rich. We propose a more nuanced argument that war mobilization leads to a class conflict in which the poor want the rich to pay more taxes in exchange for conscription while the rich seek lower taxes because they expect war‐related losses of their wealth. Mass warfare imposes higher tax burdens on the rich only when elites lack economic resources to prevent such policies. Using a panel analysis of up to 18 countries from the late nineteenth century to the 2010s as well as a subnational analysis of Senate roll call votes on tax bills introduced between 1913 and 2008, we corroborate our argument that elites' share of national income conditions how war mobilization shapes the trajectories of tax regimes. [ABSTRACT FROM AUTHOR]

Individual attributes have been demonstrated to influence the entrepreneurial decisions of returnees, but little is known about the regional factors. This study employed a dual-level logistic model to explore the effects of both individual characteristics and regional context on returnee entrepreneurship in China. The results indicated the significance of both individual-level attributes and regional context in the entrepreneurial entry: regional prosperity, government fiscal expenditure, tax burden, rainfall, and transportation infrastructure significantly affected the entrepreneurial probability. This study extends the returnee entrepreneurship literature by first, elucidating the importance of regional context in entrepreneurship and second, highlighting the joint impact of economic, institutional, and geographical contexts. [ABSTRACT FROM AUTHOR]

The structure of the Italian personal income tax has undergone several important changes since its introduction in 1974, following a path similar to those in other advanced economies. These modifications have affected its redistributive impact in ways that a priori are not easily identifiable, since they have often moved in divergent directions. The aim of this paper is to study how the redistributive effect (i.e. the ability of the tax to reduce inequality in post‐tax incomes) and progressivity (i.e. the rate at which tax incidence increases with income) of the tax have changed, comparing its structure at the end of the 1970s with its current version. Contrary to what might be expected from the reduction in top marginal tax rates, after 40 years the Italian personal income tax is more redistributive and slightly more globally progressive. A simple decomposition enables one to appreciate the importance that policy choices, inflation and the evolution of income distribution have had in shaping its effects over time. The lack of automatic adjustment mechanisms to inflation has produced a strong monetary fiscal drag effect, dampening the progressivity of the tax and increasing its burden. Policy changes, however, managed to make the tax more redistributive, and not less progressive. Compared with 40 years ago, the incidence of the tax has decreased on lower incomes, while increasing on middle and high incomes. [ABSTRACT FROM AUTHOR]

The external debt burden of many developing countries has increased their borrowing risk and interest charges on loans. The 2007–2008 global financial crisis exposed the vulnerability of developing countries' dependence on the international financial market (IFM). Given the uncertainty and higher borrowing risk, which limit access to external funds, it has become necessary that developing countries increase their internally generated revenue through taxation to facilitate growth and development. For effective distributive effect of tax policy, the tax burden ought to be optimal. This study estimates the optimal tax rate that maximises the economic growth for Ghana, using quarterly data from 2007 to 2017. Based on Scully's model, the study concludes that for the economy to grow at an average rate of 8.88% instead of the current 6.25%, the optimal tax rate should be raised from the current 15.30% to 27.69%. For policy purposes, the study highlights the implication of ensuring efficiency in revenue mobilisation through taxation. [ABSTRACT FROM AUTHOR]

We show consistent results that corporate cash tax burden within a year rises when economic policy uncertainty heightens using aggregate‐level data. Time‐varying tax effects of policy uncertainty are gradual and take time to induce corporate precautionary motives to engage in cash tax saving in the long run. Firm‐level analysis confirms that the tax effects of policy uncertainty are asymmetric and depend on underlying sources of monetary/fiscal policy uncertainty. The contemporaneous effect of monetary policy uncertainty on the cash effective tax rate is positive, whereas fiscal policy uncertainty shows a one‐year delayed negative effect on the cash effective tax rate. [ABSTRACT FROM AUTHOR]

Though lobbying accounts for a significant proportion of corporate political expenditure, comprehensive research on its advantages is scarce. Further, research findings have been inconclusive in quantifying political lobbying expenditures' rate of return. Using data from Fortune's America's Most Admired Companies (AMAC) with publicly available financial statements for the period from 2008 to 2017, this study delved into the tax benefits of lobbying using the dynamic panel system GMM and quantile regression model. This study found strong evidence that corporate lobbying is associated with higher levels of tax aggressiveness. The results also show that firms that spend more on lobbying in a given year pay lower effective tax rates. Additionally, this study revealed that the reputational effects of corporate social responsibility lead to the increased effectiveness of corporate lobbying expenditures. Thus, political lobbying affects tax enforcement, resulting in lower tax burdens for politically active firms. These results are consistent with the conjecture that firms with high levels of social responsibility and political lobbying are more tax aggressive. This study has addressed the need to quantify the benefits of lobbying and corporate social responsibility activities, especially in terms of lower tax payments and better financial returns to shareholders while still meeting the needs of non‐owner stakeholders. [ABSTRACT FROM AUTHOR]

Annual wealth tax is back on the policy agenda, but discussion of its effect is not well informed. When standard methodology is used and wealth‐tax burdens are measured against annual individual income, it is found that a large share of the tax burden falls on people with low incomes. In this study, we use rich Norwegian administrative data to discuss the distributional effects of wealth tax under several different income concepts, ultimately measuring income over the lifetime of family dynasties. When measured against lifetime income and lifetime income in dynasties, wealth tax is mostly borne by high‐income taxpayers and is seen as clearly redistributive. [ABSTRACT FROM AUTHOR]

Using the 2018 World Bank enterprise data, this study sought to establish whether the determinants of labor productivity in the Kenyan private service sector varied with the size of the firm. Unlike previous studies that just focus on the determinants of labor productivity among manufacturing firms; this study employed the two‐stage switching regressions model to correct for the firm‐size effect. The findings revealed that capital intensity, employee wage, high school education, and managers' experience impacted positively and significantly on labor productivity while tax burden and power outages significantly decreased labor productivity across all firms. The differences in the determinants of labor productivity across both firms were, however, found to be negligible and insignificant. With the political uncertainty and tax burden constraints perennially defining the Kenyan economy, the study recommended the provision of a favorable business environment and investment in human capital as key channels of optimizing service sector productivity. The selectivity variable was also significant across both firms, hence supporting the role of self‐selection in labor productivity studies. Correcting for the firm‐size effect was very crucial; something that has been largely ignored in previous studies on labor productivity. [ABSTRACT FROM AUTHOR]

Using data from China Annual Survey of Industrial Firms and addressing potential endogeneity problem, we find that corporate tax burden in China is procyclical during recessions and countercyclical during booms. The cyclicality is stronger for enterprises whose corporate income taxes are levied by Local Tax Bureau (LTB). Procyclicality of corporate tax burden during recessions is larger for enterprises located in county, non‐state‐owned enterprises (non‐SOEs), non‐high‐tech enterprises and large‐medium enterprises. Furthermore, tax quotas and growth targets of local governments enhance procyclicality during recessions and the countercyclicality of corporate tax burden during booms. Tax collection and government spending are important channels through which tax quotas and growth targets affect the cyclicality of corporate tax burden, respectively. This paper provides important policy implications for China during economic recessions. [ABSTRACT FROM AUTHOR]

We estimate the property tax incidence on rented cropland, defined as the extent to which landowners can increase cash rental rates to shift the tax burden of property tax to renters. Using Ohio's Current Agricultural Use Value (CAUV) Program, we are able to avoid issues where the market value of farmland determines the property tax as CAUV assesses farmland in Ohio based on a use‐value formula with historical and state‐wide prices, yields, and costs of corn, soybeans, and wheat. Our results indicate that cash rental rates in Ohio from 2008 through 2017 increased between $0.31 to $0.40 for each additional dollar of property tax levied on cropland in the short run. Further specifications taking into account lagged effects of property tax indicates a higher incidence of $0.61 higher cash rent for each additional dollar of property tax, although this is dispersed over a 3‐year time period. [ABSTRACT FROM AUTHOR]

We examine whether the Chinese government's anti‐corruption enforcement reduces corporate tax burdens. Using a difference‐in‐difference approach, we find tax burdens of firms located in corrupt political leaders' jurisdictions are lower after these leaders were deposed. An analysis of two tax policy changes shows that the reduction in tax burden is more pronounced when corrupt politicians had more power in levying taxes. [ABSTRACT FROM AUTHOR]

Tax avoidance can range from reduction of the corporate tax burden by legitimate use of tax rules to violation of tax laws. In this paper, we endeavor to synthesize the major findings of tax avoidance research from the accounting and finance literatures over the past ten years. We consider theoretical developments and the related empirical findings about the interconnected issues of measuring tax avoidance, and the possible causes and outcomes of corporate tax avoidance. We present some ideas for further research to examine underexplored topics regarding tax avoidance. [ABSTRACT FROM AUTHOR]

This study investigates the association between CEO age and corporate tax planning. Using a sample of 11,537 firm‐year observations from the fiscal year 1997–2013, I find CEO age exerts an economically significant influence on firms' tax policies, incremental to economic determinants identified in prior research. Specifically, CEO age is positively related to cash and GAAP effective tax rates, and negatively related to permanent book‐tax difference, suggesting that older CEOs are less likely to take actions to lower tax burden. The results hold across different model specifications and robustness tests to address potential bias arising from endogeneity, sample selection issue, and the confounding effect of CEO tenure. [ABSTRACT FROM AUTHOR]

We study the incidence of nonlinear labor income taxes in an economy with a continuum of endogenous wages. We derive in closed form the effects of reforming nonlinearly an arbitrary tax system, by showing that this problem can be formalized as an integral equation. Our tax incidence formulas are valid both when the underlying assignment of skills to tasks is fixed or endogenous. We show qualitatively and quantitatively that contrary to conventional wisdom, if the tax system is initially suboptimal and progressive, the general‐equilibrium "trickle‐down" forces may raise the benefits of increasing the marginal tax rates on high incomes. We finally derive a parsimonious characterization of optimal taxes. [ABSTRACT FROM AUTHOR]

This article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957–2013, corporations had been subject to a hypothetical corporate cash flow tax—that is, a tax allowing for the immediate deduction of investments in long‐lived assets like equipment and structures—rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995–2013) differed little from that under the hypothetical cash flow tax. This result has three important implications. First, capital owners appear to bear a large fraction of the corporate tax today. This is because economic theory holds that corporate cash flow taxes are largely borne by capital owners and my result implies that the actual tax behaves in practice much like a cash flow tax. This theory is embodied in the Treasury's most recent model of corporate tax incidence. Applying the model to my results implies that only a small portion (2–10 percent) of the U.S. corporate tax was borne by labor in the years before the 2017 Act and thus capital providers are the primary beneficiaries of the Act's large corporate rate cut. Second, the results suggest that the United States could switch fully over to a cash flow tax, which is likely to be administratively simpler for both the government and corporations, at relatively low revenue cost. Third, the impact of fully switching to a cash flow tax on the operations of the real economy and its efficiency are likely to be fairly small. This is precisely because the corporate tax has already evolved to largely mimic a cash flow tax, and the article explores the reasons underlying this evolution using a novel dataset. [ABSTRACT FROM AUTHOR]

This paper distinguishes between different forms of government intervention upon a firm, including the firm's tax burden, sales to the government and state shares. We investigate how these types of government intervention affect micro‐financial development. With evidence from China, we confirm that the micro‐financial development is promoted by the firm's tax burden and sales to the government but constrained by the firm's state shares. The findings remain robust to the endogeneity issue. The findings offer applications for government policies or a firm's financing strategies. [ABSTRACT FROM AUTHOR]

This paper reviews developments since the 1970s in economic thinking about the design of taxes on business profit. It charts developments from proposals for a cash flow tax from the Meade Committee, to refinements of this in the form of an 'Allowance for Corporate Equity' and the levying of the cash flow tax in the country of destination. It describes how the development of international trade and investment has led to ever‐increasing problems in the international tax system with respect to economic efficiency, profit shifting, complexity and tax competition. It also identifies why a response to these problems requires a major reform in the location of taxation. [ABSTRACT FROM AUTHOR]

In this paper I use a search and matching model to analyze efficiency in an economy with an informal sector, defined as unregulated self‐employment that cannot be observed by the government. Initially I show that the market solution for this kind of economy is inefficient. Subsequently I introduce various government policies that could correct this inefficiency. These policies include social security payments, severance payments, formal taxes, and job creation subsidies. According to this analysis the most effective policy, which restores efficiency while at the same time reducing informality levels in the labor market, is a tax credit. In this model a tax credit provides incentives for informal workers to participate in the formal sector by reducing the tax burden they have to pay as formal employees. As a consequence these workers have a higher probability of finding a higher‐productivity job in the formal sector, which in turn increases the overall efficiency of the economy. This finding is interesting in so far as it provides a theoretical rationale for anti‐informality policies that reduce informality through more rather than less social protection. The paper is therefore a modest contribution toward a policy paradigm in which reducing levels of informality and poverty and providing social protection for workers are seen as complementary rather than contradictory goals. [ABSTRACT FROM AUTHOR]

Obesity is a public health problem in the United States that has been linked to excess sweetener consumption. The American Heart Association (AHA) recommends no more than 6–9 teaspoons/capita/day, while the U.S. Food and Drug Administration (FDA) recommends 200 calories/capita/day of caloric sweetener consumption. Both recommendations are well below the reported 2016 sweetener consumption levels. We quantify the input tax rates needed to reduce the current excess sweetener consumption level to the AHA and FDA recommended standards. We calculate the joint tax in the United States on two major sweeteners, sugar and High Fructose Corn Syrup (HFCS), to be 31 and 24 cents per pound, respectively, based on the AHA standard, and 19 and 17 cents per pound, respectively, using the FDA standard. These taxes would be roughly the magnitude of the existing sugar and HFCS prices. In both cases, the tax incidence on producers is much smaller than on consumers. Our focus is very different from past studies in that it deals with the effect of taxes on inputs to meet the recommended target rather than a selective tax (sugar‐sweetened beverage tax). If a sweetener tax were implemented, U.S. sugar and HFCS producers would lose US$398–US$489 and US$683–US$844 million per year, respectively. [ABSTRACT FROM AUTHOR]

The literature on Effective Tax Rates (ETRs) focuses on high‐ and middle‐income countries, but there is very little evidence on low‐income countries. This article addresses this gap with new evidence from Ethiopia. We investigate corporate ETRs in Ethiopia and whether the distributional effects they have in practice are in line with the corporate tax policy design. We calculate ETRs in line with the literature in this field, using profit tax at the numerator and gross profit at the denominator. We then analyse ETRs not only using panel data, focusing particularly on their relation to firm size, but also including other explanatory variables. Our main result is that, despite a proportional tax rate, small firms face a higher effective tax burden than larger firms, while middle‐sized firms face the lowest burden of all. We highlight that tax systems can have practical implications that differ largely from their policy design, due to compliance costs and imperfect enforcement. Measures to reduce compliance costs for small firms are particularly recommended. [ABSTRACT FROM AUTHOR]

We propose a new method to identify the impact of a change in the tax burden on mutual fund inflows. We use quasi‐experimental data from Italy where, starting from July 2011, the tax regime for domestic mutual funds was changed from an accruals basis to a realisation basis, while the taxation of foreign funds remained on a realisation basis. We find that the reform has had a positive effect on net inflows of Italian funds (the treated group) with respect to foreign funds (the control group). The effect is both economically and statistically significant. Moreover, there is no evidence that the increase in the demand for Italian funds came at the expense of foreign funds. [ABSTRACT FROM AUTHOR]

We investigate optimal intertemporal asset allocation and location decisions for investors making taxable and tax-deferred investments. We show a strong preference for holding taxable bonds in the tax-deferred account and equity in the taxable account, reflecting the higher tax burden on taxable bonds relative to equity. For most investors, the optimal asset location policy is robust to the introduction of tax-exempt bonds and liquidity shocks. Numerical results illustrate optimal portfolio decisions as a function of age and tax-deferred wealth. Interestingly, the proportion of total wealth allocated to equity is inversely related to the fraction of total wealth in tax-deferred accounts. [ABSTRACT FROM AUTHOR]

Yet it is unclear how state building in these countries - which followed very different trajectories from countries in the global North - affects the formation of statist or anti-statist attitudes. What kind of attitudes can be qualified as statist or anti-statist, and what alternatives are there to the state? Second, Ondetti applies the notions of statism and anti-statism to account for I who i the actors representing them are. [Extracted from the article]

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. [ABSTRACT FROM AUTHOR]