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This study examined the impact of changes in tax codes on voluntary giving to universities and colleges. While higher education institutions have drawn attention to individual gifts and philanthropic donations as supplementary financial resources, the recent introduction of the Tax Cuts and Jobs Act of 2017 in the United States reduced tax incentives for charitable contributions, thus raising concerns regarding considerable declines in charitable giving. By using panel data from the Voluntary Support of Education Survey, this research revealed that changes in tax benefits on charitable giving as a consequence of the new tax policy are associated with an overall decrease in the sum of individual donations and the number of individual donors. This loss of voluntary contribution is notably observed in private colleges and universities with an emphasis on research activities. [ABSTRACT FROM AUTHOR]

Buildings are responsible for around 45% of total energy consumption and one-third of CO2 emissions annually in Switzerland. Policymakers have argued that an increased rate of energy-saving retrofits in existing buildings will play a critical role in meeting the energy and climate policy goals. This article examines the determinants for the households' investment decisions to undertake energy-efficient retrofits and investigates the role of policy measures. We estimate random effects probit models using a rich data for 1663 owned single-family Swiss households for retrofits undertaken during 2010 to 2014. Results suggest that while the building vintage appears to be a relevant determinant; energy-related attitudes of decision makers and policy instruments are also likely to play an important role. In particular, we find a suggestive evidence of tax deduction policy in supporting households' decisions to undertake energy-saving retrofits as well as the intensity of renovation. Direct monetary policies such as tax deductions should be focused particularly upon poorly insulated old buildings and those that rely on non-renewable energy sources for heating purposes. [ABSTRACT FROM AUTHOR]

The photovoltaic (PV) system has a very significant growing global trend and its role is essential in combating climate change. However, its intermittent nature requires integration with a battery energy storage system (BES). This work proposes an economic analysis based on net present value (NPV) for an integrated PV + BES system in a mature market (Italy). The analyses are applied to different policy (used for both PV and BES) and market (purchase price, selling price) contexts. Results show that the NPV(PV) ranges from 1061 to 7426 €/kW. The work identifies the conditions under which BES is affordable. The required increase in self‐consumption varies in the 14%–35% range. The purchase price and the percentage of energy‐self‐consumption play a crucial role in the profitability assessment of a PV + BES system. Incentive policies based on subsidized tax deductions and subsidies for energy produced and self‐consumed can enable a more sustainable energy future in the residential sector. This work suggests a mix of policy choices: (i) a subsidized tax deduction larger than 50% and a bonus for energy produced and self‐consumed for PV plants; (ii) subsidized tax deduction also for BESs but at a lower value than for PV plants; and (iii) encouraging a recycling industry. [ABSTRACT FROM AUTHOR]

Following generous tax deductions, Japan's income tax base is facing shrinkage; however, this trend has evolved not only due to changes to the tax system, but also due to changes in income distribution and population composition. In this study, we use household micro data from the National Survey of Family Income and Expenditure (NSFIE, 1994–2014) to explicate the state of deductions and trends in household distribution over a 20-year period while considering the contribution of each factor to changes in the tax base through decomposition. Using a microsimulation analysis, we also assess the effects of recent changes to the tax system on the tax base. Based on a long-term perspective, while the tax base has primarily been eroded due to the effects of falling incomes and an aging population, the contributions of tax system changes responding to such pressures have been limited. Including both expansion and contraction periods in the deduction system also has an effect. From a short-term perspective, changes in the tax system have had a certain impact, particularly in the 2000s, when the tax base was expanded by reducing deductions. However, this effect has eventually been offset by changes in income distribution and population composition. [ABSTRACT FROM AUTHOR]

AbstractUsing the 2009 consumption-based value-added tax (VAT) reform in China as a quasi-natural experiment for investment tax incentives, we investigate the impact of investment tax incentives on firm pollution abatement investment via a difference-in-differences (DID) approach. We find that the investment tax incentives have significantly raised firm pollution abatement investment of the eligible firms over the ineligible firms by 21.7%. Moreover, the effect is more pronounced for firms with political connection and firms located in regions with stricter environment regulation and lower pollution abatement costs. Our mechanism shows that the motivations for tax deduction play an important role in increasing pollution abatement investment. We also find that VAT reform has a negative indirect impact on firm environmental fine and firm employments and has a positive impact on firm’s capital-labor ratio and labor productivity. [ABSTRACT FROM AUTHOR]

We study the effects of a tax deduction for lifelong learning, exploiting exogenous variation in the effective costs of lifelong learning due to jumps in tax bracket rates. We use a regression kink design and tax return data on the universe of Dutch taxpayers. Low-income individuals show no response, but high-income individuals are more likely to report lifelong learning expenditures (though not a higher amount) when net costs are lower. Furthermore, for high-income individuals the effect peaks at the age interval 40–45 years of age. [ABSTRACT FROM AUTHOR]

Providing tax deductions admits the population to feel the actual financial participation of the state in their lives. The paper defines the concept of tax deduction, revealing it from the point of view of legal optimization of the taxation of individuals. The research singled out conditions for granting standard, social, investment, property, professional tax deductions and it considered viable options for a taxpayer’s application to the tax authorities for the right to use them. The purpose of the study is to substantiate and develop practical recommendations for increasing the amount of tax deductions, considering dynamic changes in the minimum wage. The authors defined the following tasks to achieve it: study and generalize the views of Russian scientists on the problems of providing tax deductions in modern economic conditions; identify and argue the socio-economic problems of tax deductions and suggest ways to solve them; develop approaches to improve the mechanism for increasing the size of tax deductions in order to fulfill the functions assigned to them, namely, the impact on improving welfare and providing tangible state social guarantees to the population. In the work’s course, the authors used abstract-logical, computational-analytical, monographic and experimental methods. Also, the methodological and theoretical basis were the work of domestic scientists on research, regulatory legal and legislative acts of the Russian Federation regulating the functioning of the tax system; official publications, as well as materials of scientific and practical conferences. The results obtained will make it possible to determine the ways of more detailed improvement of the mechanism for granting tax deductions, working out the procedure for their administration and the conditions for their provision to the population of the country. The aim of this is to establish more reasonable amounts of these deductions and implement the principle of uniform taxation of citizens of the Russian Federation.

Indian Income Tax Act, 1961, in Chapter VI-A, has provided different sections 80A-80U under which deductions have been allowed while computing gross total income. Section 80C has been amended from time to time under the Finance Act and currently provides tax benefits to the tune of INR 150000 for the assessment year 2022-23. Albeit section 80C of the Indian Income Tax Act offers an array of saving instruments popular among taxpayers, the current study has motivated to assay the less popular instruments. Following a cross-sectional research design and a stratified random sampling technique, 150 sample respondents were selected. Statistical results have indicated that particular demographics and tax deductions have influenced saving decisions, while tax deductions and tax literacy have influenced tax compliance. Moreover, it has acknowledged limitations, indicated policy formulation, and sketched a future research roadmap. [ABSTRACT FROM AUTHOR]

The article examines the practice of applying various tax instruments to stimulate largescale investment processes. The purpose of the study is to analyse tax instruments to stimulate these investment processes from the point of view of their impact on the final outcome. The authors decided tasks: to consider the taxes benefits and preferences as tools for stimulating large-scale investment processes; to identify opportunities for creating the most favorable tax climate for these investment projects; to assess the possibility of expanding such a tax administration tool as tax monitoring, subject to the inclusion of organisations implementing large investment projects as taxpayers. The authors’ recommendations and conclusions can be used in the development of conceptual provisions of tax policy both at the regional and state level in the field of tax regulation of investment processes.

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The subject. The principle of VAT neutrality is actual for Russia as VAT is one of the taxes levied in Russia. The principle of VAT neutrality has been upheld by the Russian Supreme Court. Therefore, the subject of the research is the definition of this principle as well as the problems of its relationship with the Russian tax law.Purpose of the study. The article considers the principle of value added tax neutrality as an independent principle of tax law, analyzes its content and regulatory role as independent means of legal regulation. Dealing with foreign doctrine regarding to the referred principle, the article shows the problems of its implementation in Russia and includes suggestions re its harmonization with the Russian tax legislation.Methodology. The author uses the formally legal interpretation of the legal provisions, comparative analysis of Russian and European literature as regards the nature and neutrality principle of VAT as well as the systemic analysis.The main results. The author has formulated the definition of the principle of VAT neutrality and determined the elements of the referred principle. Each element of the principle has been described. The author divided the content of the referred principle on property, legal, economic and competitive elements. However, all these elements should be considered systemically as VAT is supposed to be neutral for businesses in terms of each sphere of their business activity. The author concluded that VAT is the tax on consumption and the burden of this tax should be transferred on final consumers. Taxable persons are only public agents to collect VAT after taxable transactions with final consumers. Therefore, there should be no obstacles as regards the right to deduct input VAT as well as any rules distinguishing the tax burden for similar taxable transactions. Also, due to the deduction mechanism the burden of VAT in the same price of goods (services, work) should be equal and does not depend on the quantity of transactions to be previous to the sale to any final consumer. As regards the Russian tax legislation, the author identified the rules infringing the principle of VAT neutrality. Thus, the author has concluded that the Russian tax rules establishing strict documentary requirements to the right to deduct input VAT and limiting this right for foreign businesses contradict the principle of VAT neutrality. Also, the rules of the Russian Tax Code which stipulate the exemptions for the transactions between taxable persons and the different tax rates for the similar transactions as well as exclude the persons of the special tax schemes from VAT regime are not in line with referred principle.Conclusions. According to the results of the study, the author has formulated the suggestions regarding to the amendments to the tax legislation in order to correct the revealed mismatches between the provisions of the chapter 21 of the Russian Tax Code and the principle of VAT neutrality. It is proposed to reduce the requirements to the right to deduct as well as exclude the current limitation of this right for foreign businesses, the different tax rates for the similar transactions and the exemptions for the transactions between taxable persons. In addition, the author has suggested to entitle the persons of the special tax schemes to refuse their excluding from VAT regime.

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The relevance of the research is due to the need to improve the mechanism of state financial support for industrial production in the framework of stimulating the innovative development of the economy. The subject of the research is tax incentives for enterprises in the system of state financial support for industrial production.The purpose of the research is development of measures to improve the efficiency of tax incentive instruments for industrial enterprises based on the assessment of their effectiveness in modern conditions.When the national economy is unstable due to international sanctions against Russia, as well as internal factors, the need to form a core of industrial production capable of ensuring economic growth through the introduction of advanced technologies is of particular importance. In this regard, the article systematizes state measures aimed at supporting the activities of industrial enterprises used in the Russian economy and in the Republic of Adygea, in particular. The best foreign experience in tax incentives for industrial production in comparison with the Russian model of applying tax incentives has been summarized; tax expenses of the budgets of the budget system of the Russian Federation by types of taxes and types of state programs related to the development of industry have been analyzed; priority measures have been developed to reduce the tax burden of industrial enterprises.

The imposition of economic sanctions on the Russian Federation by the countries of Europe and the United States, the introduction of import substitution required the modernization of production, the development of new technologies and the growth of labor productivity. To achieve these goals, significant investments are required in the economy, in particular, attracting investments from individuals and legal entities. The paper describes tax aspects of investing. The methodological basis of the study is tax legislation and local legislative acts of the regions. The analysis of investment activity of individuals shows the state of fixed assets of companies and the dynamics of investment activity for some types of economic activity in conformity with the current state policy to restore fixed capital. The author revealed that the number of individual investors and the amount of investment deductions received by them have increased more than twice, but the investments volume in the segment of large and medium-sized businesses continued to decrease. There was tension in the formation of regional budgets. To intensify the investment activity of companies, the author recommends to extend the application of the investment tax deduction to lowincome companies and reformat regional budgets for the least loss of funds when they are temporary diverted. The study may be of interest to state and regional authorities when developing indicators for the application of investment tax deductions.

Many European countries have implemented policies to revive their domestic service sectors. A common goal of these reforms has been to create employment for disadvantaged groups on the domestic labor market. I evaluate a Swedish policy where domestic service firms receive a 50% tax deduction on labor costs. Detailed data from tax records identify all formal workers and owners of firms that receive deductions. I describe the composition of workers and owners in these firms with respect to three groups targeted by Swedish policymakers: refugees, people with low education, and people who enter the workforce from long-term unemployment. I find that the shares of refugees and long-term unemployed in the subsidized sector barely exceed the shares in the full private labor force, and fall far below the shares in industrial sectors with a predominance of elementary jobs. The share of people with low education is higher than in the full private sector and on par with other low-skilled sectors. I conclude that the tax subsidy largely failed to improve employment opportunities among the target groups. An extended analysis suggests that labor immigration from other EU countries may be a partial explanation for this. EU immigrants operate half of all subsidized firms in Sweden's largest cities and nearly exclusively employ other EU immigrants. [ABSTRACT FROM AUTHOR]

This article investigates how employer-sponsored health insurance (ESHI) expenses affect firm capital structure. Since 2015, the Affordable Care Act employer mandate has required firms with more than 100 full-time employees to provide health insurance benefits to their employees. We exploit the exogenous increase in ESHI expenses for large firms after the mandate to identify the causal effect of ESHI on firm capital structure. Using COMPUSTAT merged with the Form 5500 data, we find that firms with higher ESHI expenses have higher long-term but lower short-term leverage. That is, accounting for ESHI expenses provides important explanatory power for firm capital structure. [ABSTRACT FROM AUTHOR]

Conventional estimates of the size and distribution of the mortgage interest deduction (MID) in the personal income tax fail to account for potentially important responses in household behavior, and thus overstate the increase in revenues and the progressivity associated with eliminating the MID. Were the MID to be eliminated, households would sell financial assets to pay down their mortgage debt, and the smaller holdings of these taxable assets would offset some of the revenue gains from taxing mortgage interest. We build on previous work that estimates the consequences of removing the MID using a framework that allows for portfolio rebalancing. Our estimates of the revenue loss of the MID are robust to various assumptions about household rebalancing behavior and the ratio of the conventional estimate to the rebalancing estimate is relatively stable over time. Based on these findings, we provide a rule of thumb for policymakers for estimating behavioral responses to changes in the MID. [ABSTRACT FROM AUTHOR]

The reform of the budgetary and administrative spheres of legislation at the present stage is inextricably linked with the direction taken at the state level to stabilize the economy in the country, as well as to stimulate its growth. Particularly important element of this phenomenon is taxes, which represent the main source of revenues in the country’s budget and financial system. Today in the sphere of economy and financial regulation there is a question of increase of taxes. The President of the Russian Federation has already signed a law, according to which from January 1, 2019 the VAT rate increases from 18 to 20%. At the same time, the existing VAT benefits in the form of an exemption from this tax, as well as the VAT rate of 0% and 10% remain. The reform of the law on VAT (in addition to the increase of budget revenues from tax amounts) intended to eliminate the economic failure of the application of VAT and simplification of VAT administration. It should be noted that the problems arising from the improvement of indirect taxation, in this case, affecting the value added tax, are currently relevant for Russia. Starting from 1992, when VAT was introduced in Russia for the first time, to the present day, there are clashes of opinions of the warring parties about the relevance of the value added tax. The problems affect the level of rates and the procedure for calculating tax liabilities, the volume and structure of benefits, the procedure for VAT collection in the movement of goods and services between foreign partners, as well as the probability of its replacement with sales tax or the establishment of a single VAT rate. And this is not the most complete list of problems arising from the reform of the value added tax.

The need to modify current sedentary lifestyle of developed countries' citizens seems indisputable. Promotion of physical activity is considered to be clue part of ati-obesity or anti-cancer government programmes. For that reason, all European countries run Sports for all policy -- a part of sports policy, that is focused on active lifestyle popularization. Due to economic and policy literature, taxes -- if properly designed -- are appropriate instruments to influence human behavior. There is a long history of those measures, starting from excise and ecological taxes and ending with gaining popularity sugar taxes. However, it seems politically unfavorable and therefore unlikely to introduce taxation on inactivity. As a result, the use of tax systems in a physical activity promotion is usually based on incentives, encouraging people to do sports. In this study, the role of tax measures in sports for all policy of European countries was assessed. For the purposes of this article, data was collected from European Commission Taxation and Customs Taxes in Europe Database v3. It was expected, that modern countries would use that kind of instruments commonly. The analysis of tax system showed, that usage of that type of tax measures in political practice of European countries is very limited. Only a few tax instruments used to promote active sport participation of citizens were detected. There were six types of measures used in personal income taxation and one kind in value added taxation. Most of the countries used one or no instrument of that type. Top usage of tax incentives was three measures and only two countries adapted that many. One of the reasons may be lack of evidence-based research, proving their effectiveness. This study may be a basis for such research. [ABSTRACT FROM AUTHOR]

How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

Copyright of Crónica Tributaria is the property of Instituto de Estudios Fiscales, Ministerio de Hacienda y Funcion Publica 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.)

Syndicated loan agreement allows for lenders often from different jurisdictions to finance the borrower and its project for which the loan is granted. The syndicated loan agreement comprises of tax clauses designed to regulate situations in which any funds transfer under the loan agreement may be taxed and generate additional costs. With the special role of syndicate agent, the loan agreement sets out rules for tax deduction and payment mechanisms. The purpose of this article is to introduce the reader to tax clauses of syndicated loan agreement with a focus of a role of a syndicate agent. Analysis of each tax clause will focus on determining the purpose of each tax clause and the purpose of tax clauses in syndicate of a loan agreement in general. [ABSTRACT FROM AUTHOR]

In China, policies are often announced at the national level but implemented locally. Innovation policies are no exceptions. This article studies China's 50% R&D tax deduction policy, a key innovation policy promulgated by the central government in 2006. We find that the degree to which the policy was implemented during the period of 2006-2009 varied across the provinces and industries, which in turn had significant impacts on local firms' innovation output. The findings of the heterogeneity in local implementation of national innovation policies are of important implications for both policy makers and innovation scholars. [ABSTRACT FROM AUTHOR]

Section 24C of the Income Tax Act No. 58 of 1962 provides for a deduction of future expenditure that will be incurred by the taxpayer in the performance of his obligations under a contract from which the taxpayer derived income. The objective of this article is to compile a list of indicators demonstrating when there will be certainty that future expenditure will be incurred as aforementioned. The conclusion reached is that a definite connection must exist between the incurral of the future expenditure and the obligation to perform under the contract. Further, conditions and warranties are contractual terms that indicate that there is uncertainty regarding the taxpayer’s obligations to perform under the contract. A time clause in a contract and a high probability that the taxpayer will perform an unconditional obligation under a contract, however, both indicate that there is certainty regarding the incurral of future expenditure. A contingent liability to pay for future expenditure or if the future expenditure is unquantified are not indicators as to whether there is certainty that the future expenditure will be incurred.

Problem definition: This paper investigates firms’ optimal operational decisions and after-tax profits with regard to tax deduction for charitable donations. Academic/practical relevance: Motivated by the steady growth in noncash donations from U.S. companies, our work is the first to provide theoretical guidance on operational planning under tax deduction for both precommitted donations and end-of-season donations. Methodology: We analyze the impact of tax deduction for a profit-driven firm under a two-period price-markdown newsvendor model and characterize the firm’s optimal price and quantity decisions. Results: The firm’s optimal donation behavior is driven by two factors—fixed cost and demand uncertainty. Specifically, a positive fixed cost can induce precommitted donation during the regular selling season, and demand uncertainty can induce end-of-season donation during the clearance period. Managerial insights: The enhanced tax deduction that is designed to encourage charitable donations results in unexpected behavior by the firm. For example, the firm’s optimal clearance price can increase with the amount of leftover inventory, and the firm’s optimal after-tax profit can increase as the tax rate increases. While the value of the deduction is tied to the fair market value (and the price) of the product, surprisingly, the firm may find it more profitable to charge a lower price, because the lower price may scale up the demand uncertainty and consequently increase the expected tax subsidy under the enhanced tax deduction. Our analysis reveals important insights about the impact of the tax law on a monopolist’s optimal operational decisions and profit. The online appendix is available at https://doi.org/10.1287/msom.2017.0676. [ABSTRACT FROM AUTHOR]

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The article investigates the legal framework for tax privileges within the Polish income tax regulations in light of principle of fair taxation (fiscal justice). The paper begins with an overview of fiscal justice and different categories of privileges (tax relief, tax exemption, etc.). In the next section, the author addresses the question of relation between these privileges and the principle of fair taxation. The final part of the article focuses on assessment of detailed regulation related to fiscal justice. The author argues that the current system of tax privileges in general complies with the requirements of fair taxation, however there is a need to introduce some changes. [ABSTRACT FROM AUTHOR]

Copyright of Global Journal of Economics & Business is the property of Refaad for Studies, Research & Development 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.)