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Why do countries repeal the inheritance tax? To investigate this question, we use a novel dataset on inheritance tax introductions and repeals worldwide. We argue that revenue requirements are the main determinant of repeal risks: The inheritance tax is resilient as long as it is central to the national revenue system; it becomes vulnerable to attacks once the rise of more efficient tax instruments marginalizes its revenue contribution. Devoid of fiscal purpose, its survival depends mainly on its redistributive features. Redistribution, however, is essentially contested and should be more important in democracies. The evidence is in line with our conjecture: The likelihood of inheritance tax repeal increases as other more buoyant taxes rise and non-democracies are more likely to repeal the tax than democracies. [ABSTRACT FROM AUTHOR]

Can governments increase tax compliance by rewarding honest taxpayers? We conducted a controlled laboratory experiment comparing tax compliance under a "deterrence" baseline with tax compliance under two "reward" treatments: a "donation" treatment giving taxpayers a say in the spending purposes of their payments and a "lucky" treatment giving taxpayers the (highly unlikely) chance of winning a lottery. The reward treatments significantly affected tax behaviour but not in a straightforward manner. Although female participants altered their behaviour as expected and complied somewhat more, men strongly reacted in the opposite manner: they evaded a much higher percentage of taxes than under the baseline. Apparently, there is no one-size-fits-all approach to boost tax compliance. [ABSTRACT FROM AUTHOR]

We map trends of tax policy change in developing countries and transition economies since the 1980s, compare them to tax trends in the advanced Western democracies and review some of the explanations offered by the contributions to this volume. We find that non-Western countries follow the lead of Western countries in some important respects but not in others. While non-Western countries brought their general revenues closer to Western levels and copied important features of Western consumption taxation including higher value added tax revenues and lower revenues from trade taxation, they failed to emulate the hallmark of 20th-century Western taxation: a strong and progressive personal income tax. The taxation trends are closely associated with socio-economic changes (as summarized by GDP per capita) and structural factors (as summarized by country size). Yet the impact of political institutions on taxation is non-linear and complex. [ABSTRACT FROM AUTHOR]

This article challenges the common assumption that the European Union (EU) has little power over taxation. Based on a comprehensive analysis of EU tax legislation and European Court of Justice (ECJ) tax jurisprudence from 1958 to 2007, the article shows that the EU exerts considerable regulatory control over the Member States' taxing power and imposes tighter constraints on Member State taxes than the American federal government imposes on American state taxation. These findings contradict the standard account of the EU as a regulatory polity that specialises in apolitical issues of market creation and leaves control of highly politicised core functions of government (defence, taxation, social security, education, etc.) to the Member States; despite strong treaty safeguards, national tax autonomy is undermined by EU regulation. [ABSTRACT FROM AUTHOR]

This article reviews the social science literature on tax competition in three steps. The first step is to look at the baseline model of tax competition on which most of the literature implicitly or explicitly builds. The key feature is that governments in a context of open borders will engage in wasteful competition for mobile economic assets and activities through tax reductions. The second step is to focus more closely on tax-induced cross-border mobility. Do tax payers actually shift assets and activities across borders in response to differences in taxation? The main message of the literature is that the scope for tax arbitrage depends crucially on the legal rules governing the taxation of cross-border activities and that the intensity of tax arbitrage varies greatly across different taxes. The final step is to analyze government reactions to tax arbitrage. Do they engage in competitive tax cutting as predicted by the baseline model? The literature discusses various strategies of tax competition and demonstrates that different governments use them to different degrees across different taxes. It also shows, however, that governments increasingly engage in tax cooperation to reign in tax arbitrage and competition. While off to a slow start in the 1960s, tax cooperation has gained momentum in recent years, especially after the financial crisis in 2008. [ABSTRACT FROM PUBLISHER]

Why does the principle of mutual recognition apply to product regulation but not to product taxation, i.e. to value added tax (VAT)? It is not for lack of trying. The Commission called for mutual recognition of VAT long before the European Court of Justice 'invented' it for product regulation, and the thrust of much of the EU's VAT policy was to implement this principle. I argue that three factors explain the failure of this policy and the comparative success of mutual recognition of product regulation. First, it is economically less beneficial to apply mutual recognition to turnover taxation than to product regulation. Second, it is politically more demanding. Third, in contrast to product regulation, there is no judicial pressure towards mutual recognition of VAT. A review of these factors helps to understand not only the specific problems of mutual recognition of VAT but also the general problems of tax integration in the EU. [ABSTRACT FROM AUTHOR]

There are basically three stories about the globalization-welfare state nexus. The first story argues that globalization is the cause of the chronic crisis of the welfare state. As national economies open to the international market, governments are forced w adapt to the imperatives of global competition, and this means cutting cost-intensive welfare programmes (globalization theory). The second story argues that, whatever the cause of the welfare state crisis, globalization is not part or it. There is neither theoretical reason nor empirical evidence to believe that national policy autonomy has decreased owing to increasing economic interdependencies (globalization sceptics). The third story holds that globalization, far from causing the welfare states troubles, is a consequence of these troubles, and part of their solution (revisionism). The paper reviews each of these stories, and counterposes them to simple descriptive statistics on Organization for Economic Cooperation and Development (OECD) countries. [ABSTRACT FROM AUTHOR]

Does globalization undermine the fiscal basis of the welfare state? Some observers are not convinced. They claim that aggregate data on Organization for Economic Cooperation and Development countries show no drop in tax levels and conclude from this that tax competition is not a serious challenge for the welfare state. This conclusion is unwarranted. The article shows that tax competition systematically constrains national tax autonomy in a serious way. It prevents governments from raising taxes in response to rising spending requirements and from detaxing labor in response to growing unemployment. [ABSTRACT FROM AUTHOR]

This study focuses on tax evasion within the framework of earmarking taxation, specifically focusing on the evasion of car ownership taxes. We utilize a unique and extensive micro-database that combines information on regular payments of the tax due, late payments following friendly warnings, and non-payment of vehicle ownership taxes, integrated with fiscal data, individual data, and municipal-level data. The empirical analysis examines individual, socio-economic, and institutional factors related to this issue. Drawing a rich dataset from the 2014 Tuscany car tax, we employ a multilevel logistic model for our empirical investigation. Our findings reveal that tax evasion poses an equity problem, as the inclination to evade vehicle ownership taxes is concentrated among specific demographic categories and types of vehicles. We also suggest that regional-level policies, such as friendly warnings, could be more effective if implemented with greater rigour. Lastly, our results indicate that reinforcing civic responsibility and enhancing institutional and political quality could prove particularly beneficial in enhancing tax compliance. [ABSTRACT FROM AUTHOR]

Discusses the tax competition in the European Union. Association of tax competition and economic integration; Development of a simple model of tax competition that allows to generate a number of testable implications; List of withholding taxes on nonresident and resident income.

The international tax system is a pillar of the post-war economic order, but it faces major challenges with the rise of global value chains, digitalization, and tax avoidance. Debates over international tax reform usually occur within a small epistemic community of experts and technocrats. In this article, we step outside this restricted circle to assess the sources of bottom-up legitimacy and support for the rules that govern where multinationals must report profits and which governments are entitled to tax those profits. We conduct survey experiments in Brazil, France, and the United States to assess mass attitudes toward the allocation of the tax base across countries. We find that people's views clash with the core principles of the current regime, but are aligned with reform proposals that allocate more taxing rights to market jurisdictions. These findings are strikingly consistent across three countries and three distinct studies. At first glance, the consistency of attitudes across countries could spell good things for international cooperation in this arena. However, we also find a significant level of "home bias" in the public's views on tax allocation. These results shed new light on the legitimacy of tax reform and on the prospects for cooperation in a key area of international economic relations. [ABSTRACT FROM AUTHOR]

This theoretical paper studies the relation between tax audits and labour market outcomes (job creation and unemployment) in an economy that contemplates penalties for firms that evade taxes and rewards for firms that comply with tax rules. Intuitively, the simultaneous presence of penalty and reward amplifies the role of auditing, since tax audits allow both punishing tax-evading firms and rewarding fiscally honest firms. Indeed, the presence of tax rewards can make the effect of tax audits on firms' net profits positive. However, the effect of tax audits on labour market outcomes is ambiguous. By setting the choice of optimal fiscal policy in a different and original way, this paper is able to derive a formula for the audit rate—consistent with the budget constraint—that makes the relation between tax audits and labour market outcomes positive. [ABSTRACT FROM AUTHOR]

Do more mobile firms pay lower taxes? Conventional wisdom argues that capital mobility creates downward pressure on corporate taxes, as firms can threaten to exit. Nevertheless, empirical findings are highly mixed and hard to reconcile, partly due to a lack of data at the microlevel. Using two comprehensive panel data sets with more than 780,000 Chinese firms over two decades, we find that firms with higher shares of mobile capital pay higher effective tax rates. We contend that this counterintuitive finding results from the strategic interaction between firms and governments. Knowing their vulnerability and sunk cost, firms with more fixed assets were more active in protecting themselves by bribing and colluding with local officials. Meanwhile, officials were more willing to seek bribes from these firms in exchange for tax cuts. In contrast, mobile firms were disadvantaged. Although capital mobility may provide additional bargaining power, firms with fixed assets can overcome this advantage through state–business collusion. Our quantitative and qualitative evidence show that fixed firms paid lower taxes in cities with cozy government–business relations. However, such advantages decreased after the launch of anti-corruption campaigns and in cities with higher fiscal transparency. [ABSTRACT FROM AUTHOR]

Copyright of Neue Politische Literatur is the property of Springer Nature 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.)

Why have advanced democracies experienced a retreat of the interventionist state since 1980? This article provides evidence that in all relevant policy indicators (spending, subsidies, state-owned enterprises, regulation, capital taxation) government intervention has been scaled back across the OECD. An overview of the results of 130 quantitative studies analysing at least one of these indicators is provided. Focusing on five main explanatory variables – globalization, Europeanization, learning and emulation, socio-economic problems, and political parties – only limited agreement in the literature is found. The reasons for this disagreement are discussed. Ways forward are suggested for the theoretical models on which studies are based, how the dependent variable is chosen, the empirical approaches that may be applied, and how quantitative research and comparative case studies may be combined. [ABSTRACT FROM PUBLISHER]

We extend the classic Zodrow–Mieszkowski model of tax competition with a public input to the case where there is skilled and unskilled labor. The policy rule governing the optimal provision of the public input contains a new term capturing an equity effect that takes into account the disparity in wages between skilled and unskilled workers. The equity effect can work in the opposite direction of efficiency. Under a coordinated policy reform across countries, total welfare improves unambiguously if the public input is underprovided prior to the reform and a concern for equity enhances the effect of improved efficiency on welfare. However, total welfare may also improve even if the public input is initially overprovided if the improvement in the unskilled wage due to the reform is large enough. [ABSTRACT FROM AUTHOR]

Copyright of Global Journal of Economics & Business Studies is the property of Gumushane University 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.)

A growing number of U.S. states have adopted “millionaire taxes” on top income-earners. This increases the progressivity of state tax systems, but it raises concerns about tax flight: elites migrating from high-tax to low-tax states, draining state revenues, and undermining redistributive social policies. Are top income-earners “transitory millionaires” searching for lower-tax places to live? Or are they “embedded elites” who are reluctant to migrate away from places where they have been highly successful? This question is central to understanding the social consequences of progressive taxation. We draw on administrative tax returns for all million-dollar income-earners in the United States over 13 years, tracking the states from which millionaires file their taxes. Our dataset contains 45 million tax records and provides census-scale panel data on top income-earners. We advance two core analyses: (1) state-to-state migration of millionaires over the long-term, and (2) a sharply-focused discontinuity analysis of millionaire population along state borders. We find that millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance. [ABSTRACT FROM AUTHOR]

This article addresses the politicisation of European tax governance in mass media. Although taxation is commonly assumed to remain a national prerogative, European institutions have extended their reach far into national tax regimes. Whether this expansion of EU authority towards one of the core functions of the nation state is accompanied by politicisation is the question to be addressed in this article. To analyse the causal nexus between growing EU authority – measured in terms of formal authority and tax legislation – and the politicisation of EU tax governance, the paper compares public debates in Germany, Ireland and Switzerland over a time period of 30 years between 1981 and 2011. Based on a newspaper content analysis, the empirical results demonstrate that EU tax governance is increasingly politicised in all three countries. Varying levels and content of politicisation across time and space are explained by national economic and socio-cultural conditions. [ABSTRACT FROM PUBLISHER]

Trade relations are governed by a multilateral agreement, whereas the avoidance of double taxation rests on a network of about 2000 separate bilateral treaties. What accounts for the difference in the institutional form? Distinguishing between the bargaining and agreement stage of international cooperation, we first show that the institutional design of both regimes is more complex than commonly assumed. Both exhibit a mix of bilateral and multilateral bargaining that precedes multilateral agreement in trade and bilateral agreement in taxation. We demonstrate that in both regimes, governmental concerns for the distribution of benefits can best be achieved through bilateral bargaining. Multilateral bargaining serves to reduce the high transaction costs of bilateral bargains. Multilateral agreement in trade helps to overcome the problem of free-riding that results from a particular interaction of concerns on distribution and enforcement problems. Since no such problem exists in double tax avoidance, agreement is therefore bilateral in nature. [ABSTRACT FROM AUTHOR]

The paper presents an index of globalization covering its three main dimensions: economic integration, social integration, and political integration. Using panel regression for the period 1970-2000 the paper analyzes whether globalization has influenced OECD countries' implicit tax rates on labor, consumption and capital. The results show that globalization did not decrease the leeway for independent economic policy. Globalization even increased implicit tax rates on capital, while tax rates on consumption and labor are unaffected. [ABSTRACT FROM AUTHOR]