Search

The article discusses the German FG Baden-Württemberg court case dealing with flat-rate income tax for non-cash benefits from a bank to private customers. The court held that if a bank invites high-net-worth private customers to events for advertising purposes and if, given the overall picture of the circumstances, these advertising measures are not linked to a specific capital investment the non-cash benefits do not lead to taxable capital gains for private customers.

When are high earnings considered a legitimate target for redistribution, and when not? We design a real-effort laboratory experiment in which we manipulate the assignment of payrates (societal "reward rules") that translate performance on a real-effort counting task into pre-tax earnings. We then ask subjects to vote on a flat tax rate in groups of three. We distinguish three treatment conditions: the same payrate for all group members ("equal" reward rule), differential (low, medium, and high) but random payrates ("luck" rule), and differential payrates based on subjects' performance on a quiz with voluntary preparation opportunity ("merit" rule). Self-interest is the dominant tax voting motivation. Tax levels are lower under "merit" rule than under "luck" rule, and merit reasoning overrides political ideology. But information is needed to activate merit reasoning. Both these latter effects are present only when voters have "full merit knowledge" that signals precisely how others obtained their incomes. [ABSTRACT FROM AUTHOR]

This article aims at analysing Article 30(1) points 15) and 16) of the Personal Income Tax Act to indicate the conditions for recognizing a company, which is for the purposes of this article referred to as a State-Owned company, as a withholding agent of a flat-rate personal income tax. In the light of the aforementioned regulation, the withholding agent responsible for the settlement of personal income tax is a company in which the State Treasury and other public entities – indicated in this provision – hold directly or indirectly a majority of votes at a meeting of shareholders or general meeting of shareholders. The key element of this definition is the legislator’s concept of “a majority of votes at a meeting of shareholders or general meeting of shareholders”, which has become the subject of a dispute between withholding agents and tax authorities as to whether the said majority of votes means “more than half of all votes”, or “a simple majority”. This study attempts to define the disputed issue by analyzing the position of the tax authorities expressed in individual interpretations of tax law provisions, the doctrine, and judicial as well as administrative decisions.

The article focuses on case law related to flat-rate determination of investment fund income in accordance with Section 6 (1) of the Investmentsteuerrecht (InvStG), German Investment Tax Act. It mentions income from the mutual fund shares was from 2003 determined separately and uniformly and shares in three of the six investment funds. It also mentions shares in the the remaining three mutual funds took place regarding the disputed years.

Copyright of Prawo Budżetowe Państwa i Samorządu is the property of Nicolaus Copernicus University in Torun, Faculty of Law & Administration 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 is a first theoretical presentation of a simple progressive taxation system. The system is based on two adaptations of one easily calculable formula that is based on the societal average income of the previous year. The system contributes to academic discussions as it is a novel approach. It is a progressive tax that does not discriminate against anyone as the progression increases continuously and the increase in tax payment does not go beyond the additional income. The analysis in the paper shows that the core advantage of the system is its simple, transparent and adaptable mechanism. [ABSTRACT FROM AUTHOR]

This paper analyses the seemingly contradictory fusion between authoritarianism and neoliberalism in Hungary under the Orbán regime. Since coming into power in 2010 on a popular backlash against austerity, the hard-right Fidesz–KDNP government, led by Viktor Orbán, has carried out a root-and-branch transformation of Hungarian society. While officially proposing a break with neoliberalism at home and abroad, the paper argues that the Orbán regime has rather deepened it, producing a specific variety of 'authoritarian neoliberalism', which skilfully combines some of the central tenets of neoliberalism (maintenance of a balanced budget, introduction of a flat tax system and the pursuit of regressive social policies) with 'ethnicist–populist' measures that seek to co-opt, coerce or manufacture consensus among subaltern groups in society against alleged 'enemies' of the Hungarian nation. While Orbán's 'illiberal' politics have been strongly criticized by neoliberal institutions, such as the IMF and the EU, they have taken little concrete action against the Hungarian government. We argue that the reason for this is pragmatic: the Orbán regime has not only been a model for neoliberal austerity in Europe since the 2008 crisis, but also its authoritarian and xenophobic policies are not that different from other EU states. [ABSTRACT FROM AUTHOR]

Objective: This article quantifies the economic effects of a fundamental reform proposal for Germany's social security system that integrates most parts of the prevailing social security insurances into the general tax‐transfer system. Methods: Drawing on individual household data, we use a combined approach that employs both computable general equilibrium modeling and microsimulations. Results: By discussing two revenue‐neutral reform scenarios that both encompass a negative income tax for low incomes and a flat tax rate otherwise, but differ in the effective marginal tax rates and tax allowances, we find a negligible or even negative impact on employment and GDP. Conclusion: Our results cast doubt on whether such a fundamental reform would have positive welfare effects. [ABSTRACT FROM AUTHOR]

In the post-communist world, the flat tax was a popular neoliberal fiscal reform that initially spread through dense networks of rightwing politicians and parties. Over time, its symbolism and appeal broadened, making this specific fiscal approach attractive to a wider range of actors and regimes. By considering the full set of post-communist flat tax cases and the competitive dynamics in the region, this article examines the evolution of this reform and demonstrates how the structure and the symbolism of the flat tax offered advantages to governments that eventually transcended regime type and partisanship. [ABSTRACT FROM AUTHOR]

The literature can justify both increasing and decreasing marginal taxes (IMT & DMT) on top incomes under different welfare objectives and income distributions. Even when DMT are theoretically optimal, they are often politically infeasible. Then a flat tax seems to be a constrained optimal solution. We show however that, given any flat tax we can increase the total utility of a poor majority by raising the top income tax rate under a simple condition, which can be checked with empirical data. We further generalize our main results allowing different welfare weights, declining elasticity of labor supply and more tax bands. [ABSTRACT FROM AUTHOR]

This paper analyses the transition from the voice and SMS era of mobile telephony to the data-only era, and the strategies that operators have adopted during this transition phase. Key drivers for the transition are Over the Top services (OTTs). The paper uses quarterly prices for prepaid user baskets across 44 African countries and introduces an alternative tool to measure and compare top-up bundles. Prepaid voice, prepaid data and top-ups are analysed, to demonstrate the various strategies operators in Africa have adopted, in response to revenue loss caused by OTTs, such as Facebook, WhatsApp and Skype. Case studies of dominant operators in South Africa, Kenya and Namibia are used to highlight which strategies have successfully defended or increased mobile operator revenues. The paper shows that embracing OTTs, and providing prepaid products that resemble flat-rate pricing (top-ups with limited validity), is the most successful strategy for mobile operators to retain revenues. The paper also shows how zero-rated OTTs can be used to gain market share for new entrants. We argue that regulators should resist the push for regulating OTTs, and instead facilitate the evolution to flat access pricing. [ABSTRACT FROM AUTHOR]

The aim of the article is to examine the impact of progressive personal income tax rates and the effectiveness of this tax as an automatic economic stabilizer. The assessment of automatic stabilizers is based on the estimates of tax cyclical components. The study shows that the output elasticity of PIT is higher than one, which means that the analysed tax acts relatively efficiently as an automatic stabilizer. However, it was also observed that the tax progressivity is not the main reason of the effectiveness of a progressive PIT as an automatic stabilizer. The study shows that changes in progressive rates of PIT, contrary to widespread opinions, have little effect on the effectiveness of passive fiscal policy. Personal income tax acts as automatic stabilizer mostly due not to the progressive tax rates, but because of the sensitivity of employment to GDP fluctuations. [ABSTRACT FROM AUTHOR]

This paper provides a microeconometric analysis of labour force participation elasticities in Slovakia where we study the elasticity with respect to a unique tax reform whereby the flat tax was backtracked and replaced by a progressive tax. By estimating a probability model for labour force participation, we show that the low-skilled and females are groups that are particularly responsive to changes in income taxes and transfers. We perform a microsimulation analysis of two scenarios of flat-tax regime abolishment. We find that the recent departure from the flat-tax system in Slovakia in 2013, which introduced two tax brackets in personal income taxation, only negligibly reduced the average probability of being economically active at the extensive margin. A more significant average effect has been found in a hypothetical scenario with a similar fiscal revenue impact, simulating a departure from the flat-tax system by reintroducing five tax brackets. We show the different impacts of the two distinct scenarios of abolishing the flat tax on selected subgroups of the population. JEL Classification: H31, H53, I38, J21 [ABSTRACT FROM AUTHOR]

Tax reforms are often motivated by their potential to improve economic performance. However, their actual impacts are difficult to quantify. We analyze the impact of flat tax reform on incomes using 'synthetic control' methods. We identify the eight Eastern and Central European countries that adopted flat tax systems between 1994 and 2005, and then compare post-reform GDP per capita of 'treated' countries with a convex combination of similar but 'untreated' countries, while accounting for the time-varying impact of unobservable heterogeneity. We find positive impacts in all eight countries, with seven out of eight cases significant at the conventional level. [ABSTRACT FROM AUTHOR]

This article examines the way in which classification of financial instruments as debt or equity has developed in the Swedish income taxation system over the past 25 years. Although the structure of the tax system is based on the assumption that debt instruments are financial instruments with low risk, legal developments have not shared that assumption, resulting in several types of high-risk derivative instruments being covered by the definition of legal debt. This article illustrates how those developments, which can be recognised in most income-tax systems within OECD countries, seriously threatens the fundament of the tax system: equal taxation for capital income and income from labour. The article concludes by illustrating how the standard solution to the problem of classifying financial instruments as debt and equity--by treating them alike--does not fulfill the challenged principle of equal taxation, but actually intensifies the development towards unequal taxation. [ABSTRACT FROM AUTHOR]

The research begins with a brief overview of the personal income taxation trends in developed and transition countries in the past thirty years. During this period, we determine that in developed countries there has been a shift from equity towards efficiency principle conducted by a reduction of top progressive personal income tax (hereafter: PIT) rates and through base broadening. For selected transition countries, we develop a theoretical benchmark model under flat tax and compare it in practice in order to measure efficiency in terms of tax neutrality. We find very few characteristics of theoretical flat tax applied in practice causing inefficiency. We also analyse the progressivity indicators as an equity enhancing measure under flat tax. Progressivity indicators are very low and are a result of the flat PIT and flat social security contributions (hereafter: SSCs). Finally, for the case of Bosnia and Herzegovina (B&H), efficiency and progressivity measures can be enhanced indicating that PIT reforms should be brought together with SSCs reforms. [ABSTRACT FROM AUTHOR]

This paper argues that the UK pension system is gender blind and is structured around a heteropatriarchal experience. It does so by analysing two key pieces of UK pension policy: the New Flat Rate State Pension and Auto-Enrolment. Since the 1980s the value of the British state pension has fallen, and it is now worth half what it was in 1979. This presents a particular disadvantage for women who not only tend to be lower paid, but because of a gendered occupational life course, also tend to work part-time hours, and thus also fail to work the number of qualifying years for the full state pension. Traditionally, this results in a pension penalty for women. It is argued that the New Flat Rate State Pension and Auto-Enrolment will counteract this disadvantage, and political discourses used by policymakers claim that they will also create a fairer society. The argument presented here seeks to demonstrate that this claim is problematic by exposing how (i) gender blindness prevents gender equality in pension provision delivery, and (ii) how the formulation of these policies are actually reinforced by a heteropatriarchal welfare system, which fundamentally undermines the contribution made by women to the economy. [ABSTRACT FROM AUTHOR]

In 2001 Russia's Tax Department replaced a three-band progressive tax schedule with a flat personal income tax rate of 13%. This article evaluates the employment response to the flat income tax using the data from the Russia Longitudinal Monitoring Survey. With these data, employment can be classified along two dimensions: primary vs. secondary and official vs. unofficial. This article finds that individuals respond to lower taxes by devoting less time to secondary employment. Official and unofficial employment, on the other hand, remain unaffected by the flattening of the tax schedule. These results are robust to various specifications. [ABSTRACT FROM PUBLISHER]

This article is a first attempt to provide a quantitative evaluation of the welfare gains resulting from the introduction of flat income taxation in Bulgaria in 2008. Using a calibrated microfounded endogenous growth model with physical and human capital accumulation and Bulgarian data, a computational experiment is performed to quantify the dynamic welfare effect of progressive income taxation vis-à-vis flat income taxation. The model demonstrates that significant welfare gains, measured in terms of per-period consumption, can be realized with the introduction of flat income taxation. In addition, these welfare gains increase proportionally with the length of the time horizon considered. Finally, sensitivity analysis was performed to demonstrate that the results obtained are robust. [ABSTRACT FROM PUBLISHER]

This paper provides a quantitative evaluation of the welfare effect of the introduction of proportional taxation in Bulgaria in 2008, an effect that operates through the grey economy channel. Using a general-equilibrium model, augmented with informal sector, a computational experiment is performed to evaluate the welfare gain from the adoption of proportional taxation. The lower effective tax burden in the new tax regime produces a relocation of people into the official sector, stimulates investment, and increases output and consumption. Finally, under the flat tax regime, the size of the informal sector is smaller, and quantitatively consistent with OECD (Is informal normal? Towards more and better jobs in developing countries. OECD, Paris, ) and European Commission (Tax reforms in EU member states, Official Publications of the European Communities, Luxembourg, p 2012, ) figures. [ABSTRACT FROM AUTHOR]

The challenging economic times are not yet over. Therefore, after a brief history of the evolution of tax, in this Article we tried to point out the current challenges related to the tax system. The study performed made us conclude that the actual problem of taxation today is not necessarily related to the method of taxation, progressive or proportional, but to the dimension of the resources that can be drawn to the budget so that the degree of population's satisfaction would be as high as possible. The decision to progressively or proportionally tax is a matter primarily of ethics and, complementarily, of efficiency. [ABSTRACT FROM AUTHOR]

What structure of income taxation maximizes the social benefits of redistribution while minimizing the social harm associated with distorting the allocation of labor input? Many authors have advocated scrapping the current tax system, which redistributes primarily via marginal tax rates that rise with income, and replacing it with a flat tax system, in which marginal tax rates are constant and redistribution is achieved via non-means-tested transfers. In this paper we compare alternative tax systems in an environment with distinct roles for public and private insurance. We evaluate alternative policies using a social welfare function designed to capture the taste for redistribution reflected in the current tax system. In our preferred specification, moving to the optimal flat tax policy reduces welfare, whereas moving to the optimal fully nonlinear Mirrlees policy generates only tiny welfare gains. These findings suggest that proposals for dramatic tax reform should be viewed with caution. [ABSTRACT FROM AUTHOR]

Copyright of Osgoode Hall Law Journal is the property of Osgoode Hall Law School 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.)