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on Accounting and Auditing |
| By: | Jesse Edgerton |
| Abstract: | This paper develops and tests the hypothesis that accounting rules mitigate the impact of tax policy on investment decisions by obscuring the timing of tax payments. I model a firm that maximizes a discounted weighted average of after-tax cash flows and accounting profits. The cost of capital and the impact of tax incentives for investment both depend on the weight placed on accounting profits. I estimate this weight by comparing the effectiveness of tax incentives that do and do not affect accounting profits. Investment tax credits, which do affect accounting profits, have more impact on investment than accelerated depreciation, which does not. This difference in estimated impact is not obviously driven by discounting, cash flow effects, or measurement error. Results thus suggest that the tax burden on corporate capital could be lower than we would otherwise estimate, and accelerated depreciation provisions are less effective than they otherwise would be. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2011-20&r=acc |
| By: | Ernst, Christof; Spengel, Christoph |
| Abstract: | The focus of this paper is on effects from tax incentives for research and development inputs (R&D) and corporate income tax on business R&D and patenting behaviour. First, we provide a theoretical discussion of tax planning with R&D and intellectual property (IP) ownership. Further, we employ firm-specific micro-data on patent applications of European corporations at the European Patent Office to test reactions on changes in R&D tax incentives and corporate tax burden. We find a positive impact of R&D tax incentives and a negative impact of the statutory corporate income tax rate on patenting. R&D incentives rather influence the tendency to invest in R&D, whereas the tax burden rather influences the scale of R&D investment and the count of patent applications. -- |
| Keywords: | Patent,R&D,Tax Incentives,Taxation,EU |
| JEL: | H25 H26 O30 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11024&r=acc |
| By: | Aron Kiss (National Bank of Hungary) |
| Abstract: | An agreement about a lower bound for admissible tax rates can reduce the equilibrium tax rate (and thus welfare) in tax competition among fully symmetric countries. This is shown in an infinitely repeated game where the stage game describes the standard tax competition model with source-based taxes and symmetric countries. Repeated interaction may allow countries to sustain cooperation through implicit contracts. Lower bounds on tax rates ('minimum taxes') restrict the ability of countries to punish deviators. This makes cooperation harder to sustain. The introduction of a lower bound on feasible tax rates may thus harm all countries. |
| Keywords: | tax competition, tax harmonization, minimum tax, tax floor, repeated games |
| JEL: | F21 H87 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1116&r=acc |
| By: | Rünger, Silke |
| Abstract: | The German tax reform act 2001 changed the corporate tax system from a full imputation system to a half income system. Along with this change, the taxation of equity investments changed as well. Using data on 459 disposals of minority blocks over the period 1997-2006, this paper analyzes the effect of TRA 2001 on the demand for corporate shares of different owner types and on corporate ownership concentration. We show that TRA 2001 was able to fulfill government's expectations about an increase in blocks bought by individual owners. With respect to ownership concentration, we find tax incentives not to be strong enough to lead to a reduction in overall concentration of corporate ownership. -- |
| Keywords: | corporate ownership,marginal tax rate on equity,minority blocks,Germany |
| JEL: | G11 G34 H24 H32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:114&r=acc |
| By: | Schanz, Deborah; Theßeling, Holger |
| Abstract: | For more than 50 years, researchers around the world have been searching for a solution to Blacks famous 'dividend-puzzle'. However, despite tremendous efforts in different fields of economics, the influence of taxation on the distribution policy of firms has remained elusive and is still subject to extensive debate amongst scholars, professionals and politicians alike. In this paper, we try to shed some light on the discussion by presenting new empirical evidence from German tax reforms. Using a sample containing all firms listed at the Frankfurt stock exchange in the years from 1993 to 2009, we find robust evidence, that the switch from a split-rate tax system with full imputation to a shareholder relief system in 2002 and the change to a flat tax system in 2009 led to significant changes in the payout behavior of German firms. In line with the 'traditional view' of dividend taxation, German decision-makers cut back their dividend payments in response to the reduced advantageousness of dividends in comparison to capital gains after the reform. -- |
| Keywords: | Dividends,Taxation,Payout Policy |
| JEL: | G30 G35 H24 H25 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:115&r=acc |
| By: | Eriotis, Nikolaos; Stamatiadis, Filippos; Vasiliou, Dimitrios |
| Abstract: | During the last decades, several countries worldwide have introduced financial management reforms, as an important part of the New Public Management (NPM) initiative at one or more levels of government sector, by either replacing or transforming their traditional budgetary cash accounting systems towards a business-like accrual accounting concept. Following the example of this upcoming managerial trend, the Greek government introduced in 2003 the accrual basis accounting into public hospitals, as the hospital sector is one of the areas where NPM reforms have been introduced in search of higher efficiency, effectiveness and economy in service production. The purpose of this paper is twofold. The first goal is to provide an overview of the government sector reform initiatives in Greece and to present empirical evidence regarding the adoption level of the accrual basis accounting standards in the Greek public Health sector. The second goal of the research is to investigate the impact of a range of potentially contingent factors on hospitals compliance with the accrual financial and cost accounting reform. The present analysis is based on the results of an empirical survey that took place during 2009. For the purposes of this survey, a structured questionnaire was prepared and sent to the Chief Financial Officers (CFOs) of 132 Greek public hospitals. In particular, a linear regression model analysis was used to examine the cross-sectional differences on a number of explanatory and implementation factors of the accounting reform adoption level. The empirical evidence reveals that the level of accrual and especially cost accounting adoption in Greek public hospitals is realized only to a limited extent. In particular, results show that the level of reform adoption is positively related to IT quality, reform related training, education level of accounting staff, and professional consultants’ support. However, no significant relationship was found between the level of reform adoption and hospital size, reform implementation cost, CEO educational background, experience effect, and absence of management-physicians conflict relationship. The main contribution of this study is the empirical evidence it provides on the approaches and processes used by the Government of Greece to implement accrual financial and cost accounting systems in the Greek National Health System (GNHS) and the role certain human, organizational and situational factors played in such implementations for enhancing researchers’ and managers’ understanding of major implementation processes and challenges as well as helping them refine models of effective implementation process and improve systems and processes on similar future projects |
| Keywords: | Accrual Accounting; Public Sector Accounting; Compliance; Public Hospitals; contingency factors |
| JEL: | M41 |
| Date: | 2011–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30246&r=acc |
| By: | Gary Clyde Hufbauer (Peterson Institute for International Economics); Woan Foong Wong (Peterson Institute for International Economics) |
| Abstract: | The US budget outlook has the makings of a fiscal disaster, but it is the beginning of economic challenges, not the end. Among other challenges, a tax system that discourages business and erodes American competitiveness ranks high. The United States lags well behind other advanced countries, not to mention China, in reforming its corporate tax regime. Instead, over past decades, the United States has sought to make up through a high statutory tax rate, especially on multinational corporations (MNCs), what has been lost though a host of exemptions, deductions, and credits. The combination of a high corporate tax rate and its worldwide reach makes the United States—despite all its positive attributes—one of the least favored locations from the standpoint of business taxation. Unlike all other major economies, which limit corporate taxation to income earned with the national boundaries (territorial taxation), the United States hobbles its MNCs by taxing their worldwide income. Hufbauer and Wong caution that solutions to the looming fiscal crisis could make a bad corporate tax system even worse. To forestall this outcome, they advocate four measures: (1) meaningful caps on the growth of entitlement spending (Medicare, Medicaid and Social Security); (2) a national consumption tax to narrow the federal budget deficit to around 2.2 percent of GDP and to arrest the rise of public debt at about 88 percent of GDP; (3) a deep cut in the statutory corporate tax rate to 20 percent or lower, coupled with the elimination of exemptions, deductions and credits so as to broaden the tax base; and (4) the explicit adoption of a territorial system for taxing business income. The authors recognize that a national consumption tax is deeply unpopular with many Americans. However, the United States remains the only OECD country (and one of the very few countries in the world) that has not implemented a national consumption tax to fund its ambitious social programs and military commitments. Unless these programs and commitments can be downsized to a degree seldom seen in history, circumstances may compel the United States to choose between a competitive economy and a national consumption tax. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb11-2&r=acc |