|
on Accounting and Auditing |
| By: | Johannes Becker (Max PLanck Institute for Intellectual Property Munich); Marco Runkel (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | Would the introduction of a corporate tax system with consolidated tax base and formula apportionment lead to socially wasteful mergers and acquisitions across borders? This paper analyzes a two-country model with an international investor considering acquisitions of already existing target firms in a high-tax country and a low-tax country. The investor is able to shift profits from one location to another for tax saving purposes. Two systems of corporate taxation are compared, a system with separate accounting and a system with tax base consolidation and formula apportionment. It is shown that, under separate accounting, the number of acquisitions is inefficiently ciently high in both the high tax and the low tax country. Under formula apportionment, the number of acquisitions is inefficiently ciently high in the low tax country and inefficiently ciently low in the high tax country. Under tax competition, a novel externality arises that worsens the effciency; ciency properties of equilibrium tax rates under separate accounting, but may play an effciency; ciency enhancing role under formula apportionment. |
| Keywords: | Corporate Taxation, Separate Accounting, Formula Apportionment |
| JEL: | H25 F23 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:100014&r=acc |
| By: | Gallardo Ramiro, M V; Hernández Gañán, S |
| Abstract: | Since the new General Chart of Accounts was passed, the amount of financial information that is required to the corporations had increased. There have been two new financial statements too: Statement of Changes in Equity and Cash Flow Statement. We analyze the Statement of Changes in Equity on this paper, and the changes result of the new financial statement. Also, the statement of changes in equity has two new accounts: 8th group “Expenditure of Equity” and 9th group “Income of Equity”. The accounting rules for grants, donations and bequest had changed too, those are regulated by the Statement of Registration and Assessment 18th. On the same way, the rules for financial instruments or securities has changed too, those are regulated by the Statement of Registration and Assessment 9th. The information that must been provided by those accounts, now is not limited to the annual report. The main goal is an improvement of financial information provided by corporations. |
| Keywords: | Subvenciones; Instrumentos Financieros; Estado de Cambios de Patrimonio Neto; Nuevo Plan General Contable |
| JEL: | M41 |
| Date: | 2010–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23367&r=acc |
| By: | Laszlo Paizs (Institute of Economics - Hungarian Academy of Sciences) |
| Abstract: | This paper tests new implications of the asymmetric tax competition model on diesel excise taxes in the European Union (EU). I extend the standard tax competition model by replacing the unit demand assumption with iso-elastic demand. As a result, not only the level of the equilibrium tax but also the slope of the tax reaction function depends positively on the size of the country. The new implication is testable on panel data in first differences, and it is tested on a panel of 16 European countries. The results provide strong evidence for strategic interaction in the setting of diesel excises and confirm the effect of country size on the response to tax changes in neighboring countries. Strategic interaction between EU countries intensified in the mid 1990s and drove small European countries to set lower diesel tax rates. These results explain why the EU's minimum tax policy has failed to harmonize diesel tax rates across member states. |
| Keywords: | tax competition, minimum tax, asymmetric regions, diesel excise, European Union |
| JEL: | H70 H77 H87 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1012&r=acc |
| By: | Ilona Kovacs (Institute of Economics - Hungarian Academy of Sciences) |
| Abstract: | This study surveys various views on income distribution and income inequality and presents alternative approaches to and analytical methods of measuring income inequality. In contrast to traditional income distribution analyses, the author examines the development of income distribution and income inequality for a period between 1996 and 2004, following the change in the regime, based on personal income (consolidated income subject to general tax rates and total income including income subject to separate tax rates) declared to the Hungarian Tax and Financial Control Administration (APEH). A follow-up to this work based on similar data available up to the year 2007 is forthcoming. Based on income surveys by the Hungarian Central Statistical Office (KSH), the ratio of the income of the top tenth of the population to the bottom tenth of the population doubled from 4.6 to 9.2 between 1987 and 1997. Analyses for years following 1996 (TµRKI, Institute of Economics) show that income inequality did not increase considerably following that year; it essentially stagnated with nothing more than internal structural changes taking place. The results obtained based on data from personal income tax returns contradict these findings, as income inequality has further increased since, while the extent of income inequality itself was also considerably larger. Based on her conclusions, the author formulates important economic policy recommendations. She sees taxation, inflation, demographic changes, and changes in the structure of ownership and the way privatization took place as the leading causes behind these changes in income distribution and income inequality which were extensive by international standards. |
| Keywords: | income distribution, income inequalities |
| JEL: | D31 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1011&r=acc |
| By: | Hubert Kempf (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Banque de France - Direction de la Recherche); Grégoire Rota-Graziosi (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This note investigates the endogenous choice of leadership in commodity tax competition. We apply an endogenous timing game, where jurisdictions commit themselves to lead or to follow, to the Kanbur and Keen (1993) model. We show that the Subgame Pefect Nash Equilibria (SPNE) correspond to the two Stackelberg situations, yielding to a coordination issue. Selecting an equilibrium by means of the risk-dominance criterion, we prove that the smaller country has to lead. If asymmetry among countries is sufficient Pareto-dominance reinforces risk-dominance in selecting the same SPE. We deduce two important results for the literature of tax competition : when countries differ sufficiently by their size, the "big-country-higher-tax" rule does not hold anymore ; when countries are close in size, tax harmonization through a unique tax rate among countries occurs without any international agreement. |
| Keywords: | Commitment, commodity tax competition, strategic complements, Stackelberg equilibrium, Pareto dominance, risk dominance. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00492104_v1&r=acc |
| By: | Aronsson, Thomas (Department of Economics, Umeå University); Koskela, Erkki (Department of Economics) |
| Abstract: | This paper deals with optimal income taxation under international outsourcing and FDI. We show how the joint effect of outsourcing and FDI on the optimal marginal income tax rates depends on whether FDI is horizontal or vertical. |
| Keywords: | optimal taxation; redistribution; outsourcing; foreign direct investment |
| JEL: | D60 H21 H23 H25 J31 |
| Date: | 2010–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0808&r=acc |
| By: | Hubert Kempf (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Banque de France - Direction de la Recherche); Grégoire Rota-Graziosi (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | In this paper, we extend the stansard approach of horizontal tax competition by endogenizing the timing of decisions made by the competing jurisdictions. Following the literature on the endogenous timing in duopoly games, we consider a pre-play stage, where jurisdictions commit themselves to move early or late, i.e. to fix their tax rate at a first or second stage. We highlight that at least one jurisdiction experiments a second-mover advantage. We show that the Subgame Perfect Equilibria (SPEs) correspond to the two Stackelberg situations yielding to a coordination problem. In order to solve this issue, we consider a quadratic specification of the production function, and we use two criteria of selection. Pareto-dominance and riskk-dominance. We emphasize that at the safer equilibrium the less productive or smaller jurisdiction leads and hence loses the second-mover advantage. If asymmetry among jurisdictions is sufficient, Pareto-dominance reinforces risk-dominance in selecting the same SPE. Three results may be deduced from our analysis : (i) the downward pressure on tax rates is less severe than predicted ; (ii) the smaller jurisdiction leads ; (iii) the "big-country-higher-tax-rate" rule does not always hold. |
| Keywords: | Endogenous timing, tax competition, first/second-mover advantage, strategic complements, Stackelberg, risk dominance. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00492105_v1&r=acc |
| By: | Ramkishen Rajan |
| Abstract: | Though there has been much general debate recently about the pros and cons of capital controls, there remains substantial confusion and uncertainty about what exactly is entailed by the term ‘restraining global capital flows’. Popular discussion around this has typically been long on rhetoric and loose generalisations and acutely short on specifics. The aim of this paper is therefore to help refine the debate somewhat by clarifying and systematically categorising the various concepts that have been discussed in policy circles and the popular media. Two specific country experiences with restraining capital flows, viz. Chile and Malaysia are highlighted and discussed, as are the recent and muchpublicised proposals for exchange controls (a la Paul Krugman) and a global currency transactions tax in the forms of a Tobin tax.[Working Paper No. 3] |
| Keywords: | debate, capital controls, substantial, global capital flows, generalisations, systematically categorising, Chile, Malaysia, Paul Krugman, Tobin tax |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2553&r=acc |
| By: | Furceri, Davide; Karras, Georgios |
| Abstract: | This paper investigates the effects of economic size and trade openness on tax design in the OECD. Using data for thirty OECD countries over the 1965-2007 period, we test the recently proposed Hines-Summers [2009] Hypothesis, according to which the smaller the size and the greater the openness of the economy, the more it will rely on expenditure taxes and the less on income taxes. Our findings show that the Hines-Summers Hypothesis can claim broad, statistically significant, and robust empirical support in the OECD data sets we examined. |
| Keywords: | Income tax; Consumption tax; Country size; Trade openness |
| JEL: | H20 E60 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23358&r=acc |