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An editorial is presented in this issue of Competition Law & Policy Debate, focusing on the EU Foreign Subsidies Regulation (FSR) and its implications for fair competition in the European Single Market. Topics include the adoption and purpose of the FSR, challenges in notifying foreign financial contributions, difficulties in the tax domain, assessment of distortive effects, the role of third parties in enforcement, and main developments in abuse of dominance enforcement in the EU.

V Editors' Note W elcome to the Municipal Finance Journal's symposium on state fi scal responses to the COVID-19 induced economic recession. Although the impact of the pandemic was more or less pronounced in different states, all states discussed in the symposium appear to be experiencing the fi scal effects of a more than moderate recession, including reduced revenues and increased costs. The COVID-19 recession changed the fi scal outlook in the states dramatically. [Extracted from the article]

The aim of this work is structuring categorical-conceptual apparatus of the of the tax losses phenomenon in the state budgetary resources, namely clarification of the concepts of “tax gap”, “tax expenditures”, “tax losses”, as well as the quantification of tax losses of the Consolidated budget of Ukraine. Methodology. Most modern scholars interpret the tax gaps as the amount of taxes that were not received with the budget as a result of shadow economy, tax evasion and the existence of tax debt. However, considerable asymmetry of the tax component of the state budgetary resources also arises due to budget losses of all levels as a result of providing tax exemptions. In modern economic literature such losses are considered as tax expenditures. We consider tax losses a generalizing concept including potential amounts of tax revenues that the state and local budgets have not received as a result of the existence of the phenomenon of “tax gaps” and “tax expenditures”, and the amount of losses of the state budgetary resources in terms of their tax component is equal to the sum total of tax exemptions provided, unsettled tax debt of economic agents and the loss of tax revenue due to the operation of shadow economy. The study is based on the analysis of tax losses of budgetary resources of Ukraine during the period of time from 2004 to 2014. The results of the study showed enormous losses of budgetary resources in Ukraine due to the imperfection of the tax system, spread of undisclosed operations, tax evasion, and inefficient fiscal policy implementation. The Consolidated budget loses the amounts of monetary funds, equal to an average of 53.30% of actual revenue over the period studied. Total tax losses of the state budgetary resources in 2014 are equivalent to the total actual expenditures of the Consolidated budget of Ukraine on social protection and social security, defense, public order, security and judicial authorities. Even taking into account the point of view of foreign economists that only 1/3 of the tax gap can be converted into actual tax revenues in case of implementing measures of legalization of the economy, additional budgetary resources of the Consolidated budget of Ukraine obtained due to the elimination of tax gaps would be significant. It was determined that the effective management of tax gaps and tax expenditures and, consequently, a decrease in tax losses of budgetary resources will ensure the correction of fiscal asymmetries and imbalances, will contribute to achieving fiscal equilibrium, will cause a synchronization of fiscal and monetary policy, and as a result, will reduce the need of Ukraine in loan financing and its debt bondage. Practical implications. Justification of the conclusion that the major reserves to increase the tax component of budgetary resources of the state with preventing tax losses lie exactly in the plane of fiscal policy optimization and legalization of assets of business entities, allows to develop areas of improvement tax forms of financing public spending. Value/originality. The data obtained are able to provide a better understanding of the causes of public finances imbalances in Ukraine and ways of their stabilization.

This article argues that fiscal welfare in Europe not only forms part of the "hidden welfare state" (Howard,), but also constitutes an important yet understudied—and therefore hidden—element of welfare state reform. Using the example of France, and relying both on available data and on an exhaustive database of social tax expenditures (STEs) compiled for 2014, the article begins by providing an overview of the structure of STEs in France (section 2). It then analyzes the specific uses and effects of STEs in the fields of employment, health care, and pensions. In particular, it shows, first of all, how STEs have constituted a privileged instrument for circumventing certain institutional features such as high levels of minimum wage and of social security contributions in the field of employment (section 3). Second, it also shows that STEs have been used to quietly divert resources away from the earmarked social security funds and into collective private insurance funds, thus fueling their development, in the case of health care and pensions (section 4). Lastly, the article engages with the notion of the "social division of welfare" (Titmuss,) by considering some of the distributional effects of fiscal welfare in France (section 5), before concluding (section 6). [ABSTRACT FROM AUTHOR]

This paper investigates the consumption tax and subsidy as an environmental policy instrument for environmentally aware consumers by applying the model of price discrimination. We discover that a higher rate of subsidy should be set for less eco-friendly consumers for the purpose of achieving socially optimal environmental qualities under positive externalities and this retrogressive subsidization differs from the current progressive subsidization in the Japanese automobile industry, and could alleviate crowding out effects on prosocial behavior. Moreover, it is revealed that the optimal policy instrument for eco-friendlier consumers shifts from a subsidy to a tax, as the level of negative externalities increases. [ABSTRACT FROM AUTHOR]

Copyright of Omer Halisdemir Universitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi is the property of Omer Halisdemir University, Faculty of Economics & Admistrative Sciene 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 article reports on a litigation in Germany that lays the distinction between non-taxable damages and taxable services against the provision of a "compensation payment." Article 2(1)(c) of the VAT Directive must be interpreted as the amount fixed in advance by an economic operator in the case of the premature termination of a service contract with a minimum commitment period by its customer.

The article reports on the input tax deduction from development costs in Germany. It examines whether the newer European Court of Justice (ECJ) case law and a pending Bundesfinanzhof (BFH) court procedure could deduct a right of deduction for development costs incurred in connection with the development of public land or the free transfer of the affected land to the public sector.

The article reports on the sales tax treatment of vouchers in Germany. It is said that vouchers are becoming increasingly popular as not only are they appealing to the customer, but they also represent an effective tool for customer acquisition and revenue generation due to pre-financing effects and high rates of forfeiture. It discusses one of the new regulations, the so-called Coupon Directive.

What is the effect of providing personally tailored budgetary information on public attitudes to tax and spending? We address this question with a survey experiment based on the annual tax summaries introduced by the UK tax authorities in 2014. By subtly manipulating the categories of state spending – in particular, the controversial category of ‘welfare’ – to invoke a sense of unfairness, we show how budget information in general and the United Kingdom’s annual tax summaries in particular impact support for state spending. Though the stated aim of providing personalised tax receipts to income taxpayers is to enhance fiscal transparency, doing so may also damage support for state spending if the information provides a sense that existing redistribution is unfair. The article contributes to political science debates about public attitudes to tax and spending, the character and trade-offs of fiscal transparency, and the framing effects of welfare. [ABSTRACT FROM AUTHOR]

Why is the tax bar so white? This question has gone unasked for far too long and in this Article we offer one possible answer. We believe that answer lies in the unexamined implications of the concept of tax expenditures. We therefore connect four things: (1) tax expenditures, (2) the way in which the acceptance of the concept has enshrined the notion that taxation should be synonymous only with raising revenue, (3) the consequent relegation of social values to an outsider status, and (4) the lack of diversity in the tax bar. Our claim is that a field of law that regards a single goal--in this case, raising revenue--as its proper objective, is likely to attract to it a more monolithic group of individuals than a field of law that is concerned with promoting multiple and diverse social values. Over time the useful descriptive concept of tax expenditures has evolved into a prescription that the tax system be purged of objectives other than the raising of revenue. Tax expenditures have come to be viewed as undeserving interlopers into what would otherwise be a pristine revenue-raising machine. That view devalues the role of social policy in the tax system and, as a consequence, has obscured and constrained the nature of the tax law. This normative perspective on the tax system is not only incorrect but may be contributing to the lack of racial and ethnic diversity in the tax bar by constricting the group of individuals who may be attracted to tax. Given that available data shows that law students who are members of racial and ethnic minorities are more likely than others to state that they want to "change or improve society" and engage in "socially responsible work," we suggest a link between the lack of racial and ethnic diversity in the tax bar and the normative legacy of tax expenditures, which casts the normative tax system as unconcerned with anything other than raising revenue. [ABSTRACT FROM AUTHOR]

Although nonqualified deferred compensation plans lack explicit tax preferences afforded to qualified plans, it is well understood that nonqualified deferred compensation results in a joint tax advantage when employers earn a higher after-tax return on deferred sums than employees could achieve on their own. But the joint tax advantage depends critically on how plans are operated; chiefly how plan sponsors use or invest deferred compensation dollars. This is the first Article to systematically investigate nonqualified deferred compensation practices. It shows that joint tax minimization historically has taken a backseat to accounting priorities and participant diversification concerns. In recent years, the largest source of joint tax advantage likely stems from use of corporate owned life insurance (COLI) to informally fund nonqualified deferred compensation liabilities. To be sure, the reduction in corporate tax rates enacted in the Tax Cuts and Jobs Act increases the joint tax benefit of nonqualified deferred compensation. Nonetheless, this Article recommends a measured response focusing first on COLI reform and an extension of the application of the Affordable Care Act's Net Investment Income Tax to nonqualified deferred compensation earnings, before considering fundamental reform of the taxation of nonqualified deferred compensation. This Article also reveals that nonqualified deferred compensation results in an undisclosed advantage to corporate executives, as it provides what are effectively above-market returns on retirement savings, and that, at least in recent years, shareholders, not taxpayers, have provided the bulk of the subsidy for nonqualified deferred compensation. [ABSTRACT FROM AUTHOR]

Tax expenditures have become a widely used tool of government in the United States, with the fiscal impact now rivaling appropriations for discretionary spending. But tax expenditures raise important accountability dilemmas and tradeoffs for the nation. We show that, despite repeated recommendations by oversight agencies to address the significant shortfalls in performance associated with this tool, policymakers and public managers alike remain ambivalent about instituting stronger accountability provisions. Our analysis lends support to a more complicated image of principals emerging in the public management literature, one where principals do not always take action to hold their agents to account. The case of tax expenditures calls for greater attention in public management theory and research to the diverse roles that principals play in program implementation and accountability. [ABSTRACT FROM AUTHOR]

It is not efficient for a budget system either to enable excessively frequent changes in programs and tax policies or to be rigid and unresponsive. Program durability is one measure of how a budget system weighs the competing goals of resoluteness and responsiveness. The federal budget has different processes—mandatory and discretionary spending and tax expenditures—each based in separate congressional committees and relying on separate procedures. This article examines the budget systems' durability. One finding is that mandatory spending programs and tax expenditures are more durable than programs backed by discretionary spending. However, while programs targeted to vulnerable populations and supporting long‐term planning, such as in income support and health, might benefit from durability, these programs display shorter durability, not longer. While displaying greater durability, tax expenditures do respond to changes in different economic sectors, based on the changes in spending of other budget systems. [ABSTRACT FROM AUTHOR]

This article examines the fiscal impact, and the associated welfare cost, of marginal reforms to work-related tax relief in five European countries. We combine a model of labor supply with microsimulation results to capture the interaction between the specific tax incentive and other provisions of the tax-benefit system along the entire earnings distribution. We find that changes in labor supply decisions—both at the extensive and at the intensive margin—significantly affect the revenue gain from the simulated reforms. Our results suggest that at least one-fourth of the extra tax revenues collected through a reduction in work-related tax incentives is washed away following labor supply adjustment, notably due to lower participation by individuals most at risk of exclusion. In some instances, the erosion of the initial revenue gain becomes substantial. The welfare effect of contractions to these tax schemes could be far from negligible. [ABSTRACT FROM AUTHOR]

The paper focuses on tax expenditures of individuals, which are one of the fiscal tools of the state. In the Czech Republic they are primarily aimed at housing policy, pension policy, and philanthropy, and the question is the extent to which tax expenditures can influence the preferences of tax payers. The aim of this paper is to evaluate the effect of tax expenditures of individuals in the form of tax deductions for social policy, housing support and retirement savings. We also evaluate whether these tax deductions fulfill the fiscal functions for which they were introduced and the extent to which taxpayers use them. Methodically, the research is based on the analysis of secondary statistical data of the Financial Administration of the Czech Republic and results from aggregated tax returns filed for the period 2005-2015. The effect of tax deductions was decreased by abolition of the progressive rate of personal income taxes and by introduction of a uniform tax rate of 15%. Tax deductions for retirement savings do not have a sufficiently strong motivational impact and do not affect taxpayers in the context of public policy. Deductions for mortgage interest can be regarded as a form of major housing support, but are related to taxpayer income and favor those with higher incomes. [ABSTRACT FROM AUTHOR]

In many countries - the US, Canada and the UK, for example - donors to charities receive the identical subsidy through the tax system whether their donation is to a homeless shelter, or to the opera. The way in which charitable giving is subsidized differs across systems, but the equal treatment of very different charities is common to them. Given the different circumstances of the beneficiaries of these various of charities, how can the identical tax subsidy for donations be justified? One approach is to consider the charitable subsidy in light of egalitarian theories of justice and to ask whether a subsidy to charitable gifts to arts institutions that primary benefit the well-off could be justified within the theory. An alternative approach avoids the overarching theory of just distribution and focuses instead on the essentially political and practical aspects of the income tax. This essay considers both approaches, concluding that the latter is more appropriate to the question of the charitable subsidy, and that there is a case to be made for equal treatment of donation to charities with markedly different beneficiaries. [ABSTRACT FROM AUTHOR]

Copyright of Dilemas Contemporáneos: Educación, Política y Valores is the property of Dilemas Contemporaneos: Educacion, Politica y Valores 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 Revista Ciência & Saúde Coletiva is the property of Associacao Brasileira de Pos-Graduacao em Saude Coletiva 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.)

Editor's Note: Dana Trier, long-time active ABA Tax Section member and former Corporate Tax Committee chair, most recently served as Deputy Assistant Secretary for Tax Policy in the U.S. Treasury Department. If you're practicing outside the New York/Washington complex, it's actually quite common for tax lawyers to be business lawyers as well as tax lawyers. I thought it was healthier for the tax department (and healthier for me) to have a tax department that performed its role very well in relation to the corporate department, but also had its own practice-a client-facing practice, where tax lawyers were important to bringing in the business, developing the business, etc. When I left Cleary to go to Davis Polk, which had a very fine tax department, one of my objectives was to develop that broader capacity of a tax department, to make the tax department quite important from the perspective of the business of the firm. [Extracted from the article]

How state-imposed tax and expenditure limits (TELs) affect municipal revenues depends on both the terms the limits and themunicipal revenue level. The majority ofTEL literature assumes that the sameTELs have the same stringency formunicipalities with varying property tax efforts. I construct a ''TEL gap''measure that accounts for different maximum allowable rate for property tax growth across states and incorporates different levels of the actual levies across municipalities within a state. Using a sample of 100 large cities in the United States from 1995 to 2011, this study examines the effects of TELs on revenue reliance by source and shows that cities with more restrictive TELs do not have higher reliance on non-property-tax revenues. In a sample that includes only cities with TELs, the results suggest that cities subject to more restrictive TELs rely more on sales taxes and less on user fees. [ABSTRACT FROM AUTHOR]

In an earlier work entitled Regulating Cybersecurity, I argued that cyber defense should be understood not just as a matter for law enforcement and the armed forces, but as a regulatory problem in need of regulatory solutions. This companion article proposes a series of market-based responses to complement those governmental responses. It argues that hackers and other private actors are an important source of cybersecurity data--especially information about vulnerabilities and how to exploit them. Yet the white market, in which researchers can sell bugs to vendors that will patch them, suffers from high transaction costs, low prices, and other imperfections. Many hackers therefore choose to sell on the gray market to military and intelligence agencies that will exploit the flaws, which means that vulnerabilities persist and users remain exposed to attacks by hostile powers that have found the same flaws. The solution, I argue, is twofold: fostering white market brokers to reduce the transaction costs of legitimate bug sales, and increasing the payouts offered on the white market through a combination of liability protections, tax benefits, and subsidies. [ABSTRACT FROM AUTHOR]

The basic function of taxes is the fiscal function, which consists in collecting revenue by public authorities. The imposition of non-fiscal functions on taxes causes the weakening of their basic function. The purpose of the article is to present tax exemptions, as well as to assess the fiscal consequences of their application in excise duty in Poland in 2012-2016. The Polish excise duty solutions provide for numerous tax exemptions, whereby it should be noted that a significant part are attributable to EU solutions resulting from harmonisation of this tax. In light of the conducted research, it may be concluded that the applied tax exemptions have a significant influence on fiscal efficiency (causing an average revenue decrease of approximately 7% during the examined period). [ABSTRACT FROM AUTHOR]

We study the role of tax incentives in promoting a fast-growing and novel type of conservation: voluntary, permanent restrictions on private land use through conservation easements. In the United States, easements represent the largest charitable gift on a per-donation basis, but skeptics wonder if their tax preference merely subsidizes wealthy landowners rather than inducing conservation. We incorporate federal and state income tax codes into a calculator to quantify the after-tax donation price and demonstrate its sensitivity to landowner income and state and federal policies. Using a 1987–2012 panel, we measure the response of state-level easements to the price. Our large elasticity estimates, spanning −2.4 to −6.1, indicate that tax incentives induce conservation and do not merely subsidize it. We find no evidence that generous tax benefits have caused less strategic patterns of land conservation. [ABSTRACT FROM AUTHOR]

This paper analyzes the impact of TELs on different types of state expenditures. This study provides comparison analysis of different types of TELs on state level and aims to evaluate the effect of TEL policy on state expenditure structures. Using panel data analysis, this work finds that states with Tax Expenditure Limitations (TELs) - in addition to financial factors- are associated with higher level of state expenditures for corrections and lower levels of state expenditures for police, parks, natural resources, and highway expenditures. Looking at 50 states from 2006 to 2011, this relationship is both statistically and substantively significant. [ABSTRACT FROM AUTHOR]

Policy feedback, or the process in which policies create constituencies vested in their maintenance, is a durable feature of the American welfare state. Scholars have shown that policy visibility conditions how feedback effects unfold: for public-private policies—arrangements in which the state delegates service provision to private actors, often described as “hidden” or “submerged”—policy feedback typically galvanizes not citizens but market actors that benefit indirectly from these subsidies. This article extends theories of public-private policy feedback from market actors to charitable organizations through a case study of the charitable contributions deduction. The deduction’s incremental expansion is found to have mobilized charities as powerful stakeholders in the policy’s endurance. Charities’ efforts to protect the deduction, together with the efforts of lawmakers, have couched the policy in a politics of neoliberalism and disguised its effects, insulating it from reform even as elites have netted a greater share of its benefits over time. [ABSTRACT FROM AUTHOR]

Democrats, Republicans, media commentators and even academics denounce "tax loopholes." Speakers may think that they are talking about the same things, but this Article demonstrates that people have widely divergent views about what tax loopholes are. Thus, people criticizing loopholes often talk past each other and engage in the tax equivalent of schoolyard name-calling. The response to this problem is not, however, to try to define the concept of "tax loopholes" with precision. Such an endeavor is pointless. Instead, this Article provides a taxonomy for translating the rhetoric of "tax loopholes" into more meaningful tax policy discourse. This taxonomy posits that any reference to a "tax loophole" should be understood in two dimensions--the tax policy objection and the target of the criticism. Using numerous examples from the popular/political discourse and the academic literature, this Article catalogs alternatives on each dimension. Categorizing any purported "tax loophole" using this taxonomy provides a more productive framing of whatever critique is implied by any use of the "loophole" label, thereby enabling the elevation of the quality of the conversation about the individual tax preference. This taxonomy may be particularly useful now, as the debate continues about the consequences of recently-enacted tax legislation. [ABSTRACT FROM AUTHOR]

Whether welfare analysis of legal rule changes should evaluate distributional outcomes as well as efficiency depends crucially on how much their distributional impacts stick. That is, do court mandates ultimately affect the distribution of taxes and spending or do legislatures offset the distributional consequences of those court orders with other changes? Little is known about this question. To offer insight into it, I use an event study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools. I find that the court orders' distributional impacts do stick. The education spending is financed by tax increases that do not target the largest beneficiaries of the increased education spending, the poor and those with children. Thus, since the main beneficiaries of the school spending do not pay a disproportionate share of the costs, advocates for school finance reform are effective at transferring resources to poor families. The results suggest that welfare analysis of these legal rules should take into account not only efficiency but also distribution, in a departure from traditional economic analysis of legal rules. [ABSTRACT FROM AUTHOR]

This Article describes tax expenditures in relation to received legal ideals. Recent scholarship in social science has raised paradigmatic questions of economic inequality and distribution, which may be reflected in the law. Tax expenditures are one way to effect redistribution. Curiously, certain tax expenditures that have a notably regressive effect amount to a significant fraction of the U.S. government budget, which does not identify them as appropriations. In large part, health care, education, and retirement are financed in the United States by the privatizing mechanism of tax expenditures, although they are the three principal public (or quasi-public) goods in modern states. Evaluating the role of these various provisions in a theoretical and historical context entails consideration of individual productivity, natural competition, and potential crisis or collapse within the political economy. To persist, the fiscal apparatus of the state needs to avoid both exhausting productive resources and fostering a rentier class. Alternative presumptions about national share ownership animate specific tax provisions as well as larger visions of the future. While recent restructuring legislation involves tax expenditures, this Article does not propose any specific policy solution but offers legal and economic details in a descriptive analysis. [ABSTRACT FROM AUTHOR]

The article presents the text of the 2018 Erwin N. Griswold Lecture delivered by Martin J. McMahon Jr. before the American College of Tax Counsel. McMahon discusses some realities that the U.S. must recognize, including a tax system that should adequately fund the government and the need to recognize how path dependency often constrains tax reform. He also talks about the implementation of individual income taxation and the classification of certain personal deductions as tax expenditures.

This paper studies fiscal competition under the origin principle. It identifies a pattern of consumers' taste heterogeneity under which the first-best world social optimum arises as a noncooperative Nash equilibrium. Consumers' tastes are characterized by the strength of their preference for home and foreign goods. Nash implementation of the first-best obtains when in every tax jurisdiction the number of consumers who display a home bias (those consumers who prefer purchasing the home good to shopping abroad at equal prices) equals, for every magnitude of the home bias, the number of consumers who display an "import bias" (those who instead prefer shopping abroad) equal in magnitude. [ABSTRACT FROM AUTHOR]