nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2011‒05‒14
nine papers chosen by
Alexander Harin
Modern University for the Humanities

  1. The optimal structure of commodity taxation in a monopoly with tax avoidance or evasion By Goerke, Laszlo
  2. To assemble to resemble? A study of tax disparities among French municipalities By Marie-Laure Breuille; Pascale Duran-Vigneron; Anne-Laure Samson
  3. Workforce or Workfare? By Brett, Craig; Jacquet, Laurence
  4. Financial Transactions Taxes By Parthasarathi Shome
  5. A survey on tax compliance costs of Flemish SMEs: Magnitude and determinants By B. SCHOONJANS; P. VAN CAUWENBERGE; C. REEKMANS; G. SIMOENS
  6. Atmospheric Externalities and Environmental Taxation. By Sandmo, Agnar
  7. The Tax Elasticity of Corporate Debt: A Synthesis of Size and Variations By Ruud A. de Mooij
  8. "An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?" By Nicoletta Batini; Giovanni Callegari; Julia Guerreiro
  9. Measuring the Value of Research: A Generational Accounting Approach By Robert Hofmeister

  1. By: Goerke, Laszlo
    Abstract: If tax obligations are met, the balanced-budget substitution of an ad valorem tax on output for a specific tax not only raises a monopolist's production, but also represents a Pareto improvement. However, if tax avoidance or evasion is feasible and the marginal costs of such actions decline with the legal tax burden, a monopolist will respond to a balanced-budget substitution of an ad valorem tax for a specific tax by reducing output, while profits remain constant. Therefore, in the presence of tax avoidance or evasion activities a move towards specific taxation can represent a Pareto improvement. --
    Keywords: Ad valorem tax,Monopoly,Output,Tax avoidance,Tax evasion,Specific tax
    JEL: H21 H25 H26
    Date: 2011
  2. By: Marie-Laure Breuille (INRA, UMR1041 CESAER); Pascale Duran-Vigneron (Department of Economics, University of Exeter); Anne-Laure Samson (LEDA-LEGOS, University Paris Dauphine)
    Abstract: The purpose of this paper is to analyze the effect of inter-municipal cooperation on local taxation. Municipalities that join/create an inter-municipal jurisdiction choose between three tax regimes, which may induce both horizontal and vertical tax externalities. Using the differences in differences method with a quasi-exhaustive panel for French municipalities over the 1994-2010 period, we show a positive causal effect of cooperation on the level of cumulative tax rates (i.e. the sum of municipal and inter-municipal tax rates). In addition, we show that cooperation leads to a convergence of tax rates within an inter-municipal structure, which thus reduces tax disparities among municipalities.
    Keywords: Inter-municipal cooperation, tax competition, ?scal disparities.
    JEL: H23 H7
    Date: 2011
  3. By: Brett, Craig (Mount Allison University); Jacquet, Laurence (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This article explores the use of workfare as part of an optimal tax mix when labor supply responses are along the extensive margin. Particular attention is paid to the interaction between workfare and an earned income tax credit, two policies that are designed to provide additional incentives for individuals to enter the labor force. This article shows that, despite their common goal, these policies are often at odds with each other.
    Keywords: Extensive margin; optimal income taxation; workfare
    JEL: H21
    Date: 2011–04–13
  4. By: Parthasarathi Shome
    Abstract: This paper attempts to address both theoretical and practical considerations for a tax such as financial transactions taxes (FTT). It includes examples of FTT in the wider context, for example, on stocks and derivatives, currency transactions, and tangible property. Most of the discussion centres on financial market issues to reflect the thrust of current discussion and debate. [Working Paper 254]. URL:[ aper_254.pdf].
    Keywords: stocks, currency transactions, G20, Capital Inflows, Derivatives, Economic Efficiency, Financial Assets, Fiscal Stimulus, Stock Market Transactions Costs, Taxes, Volatility, FTT,
    Date: 2011
    Abstract: This study presents survey evidence on the magnitude and determinants of tax compliance costs in Flemish small and medium-sized enterprises (SMEs). Data were obtained from an internet questionnaire among members of a professional network of Flemish entrepreneurs, called VOKA. Analyzing a sample of 151 Flemish SMEs, we find that the tax compliance costs – exceeding over seven percent of gross added value – are relatively high. VAT, labor taxes and corporate taxes are the main components of tax compliance costs. In addition, our evidence confirms the regressivity hypothesis, according to which smaller companies face relatively higher compliance costs. Furthermore, industry, age and the proportion of blue-collar workers prove to be determining factors of relative compliance costs. Our study concludes by formulating a number of policy recommendations that might contribute to lower compliance costs.
    Date: 2011–02
  6. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.
    Keywords: Environmental taxation; Public goods
    JEL: D60 H41 H87
    Date: 2010–09–10
  7. By: Ruud A. de Mooij
    Abstract: Although the empirical literature has long struggled to identify the impact of taxes on corporate financial structure, a recent boom in studies offers ample support for the debt bias of taxation. Yet, studies differ considerably in effect size and reveal an equally large variety in methodologies and specifications. This paper sheds light on this variation and assesses the systematic impact on the size of the effects. We find that, typically, a one percentage point higher tax rate increases the debt-asset ratio by between 0.17 and 0.28. Responses are increasing over time, which suggests that debt bias distortions have become more important.
    Keywords: Corporate sector , Corporate taxes , Cross country analysis , Debt , Economic models , Tax elasticity ,
    Date: 2011–04–28
  8. By: Nicoletta Batini; Giovanni Callegari; Julia Guerreiro
    Abstract: This paper updates existing measures of the U.S. fiscal gap to include federal laws up to and including the mid-December 2010 federal fiscal stimulus. It then applies the methodology of generational accounting to establish how the burden of adjustment required to attain fiscal sustainability is shared across generations. We find that the U.S. fiscal and generational imbalances are large under plausible parametric assumptions, and, while not much affected by the financial crisis, they have not improved much by the passing of the Final Healthcare Legislation. We find that, under our baseline scenario, a full elimination of the fiscal and generational imbalances would require all taxes to go up and all transfers to be cut immediately and permanently by 35 percent. A delay in the adjustment makes it more costly.
    Keywords: Accounting , Economic models , Fiscal analysis , Fiscal policy , Fiscal sustainability , Public debt , Tax burdens , Tax reductions , Taxes , United States ,
    Date: 2011–04–04
  9. By: Robert Hofmeister (Department of Economics, University of Konstanz, Germany)
    Abstract: This paper proposes a generational accounting approach to valuating research. Based on the flow of scientific results, a value-added (VA) index is developed that can, in principle, be used to assign a monetary value to any research result and, by aggregation, on entire academic disciplines or sub-disciplines. The VA-index distributes the value of all applications that embody research to the works of research which the applications directly rely on, and further to the works of research of previous generations which the authors of the immediate reference sources have directly or indirectly made use of. The major contribution of the VA index is to provide a measure of the value of research that is comparable across academic disciplines. To illustrate how the generational accounting approach works, I present a VAbased journal rating and a rating of the most influential recent journal articles in the field of economics.
    Keywords: Research evaluation, research accounting, journal ranking, citations
    JEL: A13 A14 I23
    Date: 2011–05–02

This nep-acc issue is ©2011 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.