nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2010‒04‒04
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. A reading Hayek on power to tax By Fernando, Estrada
  2. Distributional implications of income tax evasion in Greece, Hungary and Italy By Matsaganis, Manos; Benedek, Dóra; Flevotomou, Maria; Lelkes, Orsolya; Mantovani, Daniela; Nienadowska, Sylwia
  3. The Piggy Bank Index: Matching Canadians’ Savings Rates to Their Retirement Dreams By David A. Dodge; Alexandre Laurin; Colin Busby
  4. A Structural Dynamic Micro-Simulation Model for Policy Analysis: Application to Pension Reform, Income Tax Changes and Rising Life Expectancy By Justin van de Ven; Martin Weale
  5. Optimal Redistributive Taxation with both Extensive and Intensive Responses By Jacquet, Laurence; Lehmann, Etienne; Van der Linden, Bruno
  6. External constraint and financial crises with balance sheet effects By Dai, Meixing

  1. By: Fernando, Estrada
    Abstract: This article describes the argumentative structure of Hayek on the relationship between power to tax and redistribution. It is observed throughout its work giving special attention to two works: The Constitution of Liberty (1959) and Law, Legislation and Liberty, vol3, The Political Order of Free People, University of Chicago Press, Chicago, 1979.) Hayek describes one of the arguments most complete information bout SFP progressive tax systems (progressive tax). According to the author the history of the tax progressive system, works against such a tax model and deploys a variety of arguments in his favorite spot by critics: liberal democracy.
    Keywords: Hayek; Power to Tax; Redistribution; Government; Progressive Tax; Democracy
    JEL: E62 O23 B13 B2 E6
    Date: 2010–03–21
  2. By: Matsaganis, Manos; Benedek, Dóra; Flevotomou, Maria; Lelkes, Orsolya; Mantovani, Daniela; Nienadowska, Sylwia
    Abstract: Even though tax evasion has been the focus of a growing volume of research in recent years, the issue of its distributional impact is still relatively neglected. This paper is an attempt to analyse empirically the implications of tax evasion in terms of inequality, poverty, redistribution and progressivity of the income tax system in Greece, Hungary and Italy (three countries featuring an extensive informal economy). The paper applies the discrepancy method, i.e. compares two sets of data, household budget surveys and income tax returns, to derive ratios of under-reporting by income source and geographical area. The tax-benefit model EUROMOD is used to estimate the distributional impact of tax evasion comparing household disposable incomes to a full compliance counterfactual.
    Keywords: tax evasion; inequality; microsimulation
    JEL: H23 H26
    Date: 2010–02–01
  3. By: David A. Dodge (Bennett Jones LLP); Alexandre Laurin (C.D. Howe Institute); Colin Busby (C.D. Howe Institute)
    Abstract: As Canada’s babyboom generation approaches retirement age, public concern about the adequacy of retirement income is mounting, note the authors. Most of the public debate has been about potential reform of the tax and fiduciary rules governing corporate pension plans, the possibility of expanding contributory public pension plans such as the CPP/QPP, about how much tax-deferred saving the Income Tax Act should allow, and for how long. To date, say the authors, there has been little focus on the fraction of annual earnings that must be saved by Canadians – either through employer plans, private saving, or expanded contributions to a public plan – to provide adequate and reasonably assured retirement incomes.
    Keywords: Pension Papers, retirement income, Registered Retirement Savings (RRSPs), Canada Pension Plan (CPP/QPP), Income Tax Act
    JEL: E21
    Date: 2010–03
  4. By: Justin van de Ven; Martin Weale
    Abstract: This paper describes the National Institute’s Benefit and Tax Model, NIBAX and provides results of studies using it to explore i) the introduction of low-cost pensions similar to Personal Accounts, ii) the effects of the abolition of the 10p income tax rate and iii) the consequences of rising life expectancy.
    Date: 2009–07
  5. By: Jacquet, Laurence (Norwegian School of Economics and Business Administration); Lehmann, Etienne (CREST-INSEE); Van der Linden, Bruno (Université Catholique de Louvain)
    Abstract: This paper characterizes optimal income taxation when individuals respond along both the intensive and extensive margins. Individuals are heterogeneous across two dimensions: specifically, their skill and disutility of participation. Preferences over consumption and work effort can differ with respect to the level of skill, with only the Spence-Mirrlees condition imposed. Employing a tax perturbation approach, we derive an optimal tax formula that generalizes previous results by allowing for income effects and extensive margin responses. We provide a sufficient condition for optimal marginal tax rates to be nonnegative everywhere. We discuss the relevance of this condition with analytical examples and numerical simulations using U.S. data.
    Keywords: optimal tax formula, tax perturbation, random participation
    JEL: H21 H23
    Date: 2010–03
  6. By: Dai, Meixing
    Abstract: This paper investigates the dynamic implications of Krugman’s (1999) model of financial crises with balance-sheet effects, which has a considerable impact on the literature as well as the teaching of international financial crisis. By explicitly taking account of wealth accumulation and external equilibrium condition, it is shown that a financial crisis in emerging market economies, instead of being interpreted as a jump from a good to a bad equilibrium with zero investment and zero foreign debt, could be explained as a jump from an unstable dynamic trajectory to a stable one. The dynamic framework illustrates well the analysis of different factors at the origin of financial vulnerability and crisis. By discriminating the financial crises according to the severity of their negative impacts on the domestic economy, the present study also adds some insights in the analysis of policy implications.
    Keywords: Financial crisis; currency crisis; balance sheet effect; external solvency constraint.
    JEL: F34 F32 F41 F31
    Date: 2010–03–24

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