nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2011‒06‒18
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. FORTAX: UK tax and benefit system documentation By Jonathan Shaw
  2. Impact of VAT Exemptions in the Postal Sector on Competition and Welfare By Helmut Dietl; Christian Jaag; Markus Lang; Martin Lutzenberger; Urs Trinkner
  3. Taxes and the Labor Market By Tommaso Monacelli; Roberto Perotti; Antonella Trigari
  4. Public provision of private goods, self-selection and income tax avoidance By Blomquist, Sören; Christiansen, Vidar; Micheletto, Luca
  5. Financial stability, new macro prudential arrangements and shadow banking: regulatory arbitrage and stringent Basel III regulations By Ojo, Marianne

  1. By: Jonathan Shaw (Institute for Fiscal Studies)
    Abstract: <p>This document describes the UK tax and benefit system between April 1990 and April 2010, as implemented in FORTAX, a microsimulation library written in Fortran. It begins with an overview of FORTAX and the information it calculates. Subsequent sections describe the taxes and benefits implemented in FORTAX, noting where simplifications have been made. An appendix lists values of the major tax and benefit parameters over time.</p>
    Date: 2011–05
  2. By: Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Christian Jaag (Institute of Public Finance and Fiscal Law, University of St. Gallen); Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Martin Lutzenberger (Lucerne University of Applied Sciences); Urs Trinkner (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: In most member states of the European Union (EU), universal postal services provided by the incumbent operator are exempt from value added taxes (VAT) on the grounds that they are the Òpublic postal service.Ó Other postal service providers have to charge VAT at the standard rate. The paper sheds light on the main competitive impact of VAT policies while showing the consequences on overall welfare. We show that the results are very sensitive to the operatorsÕ labor policies. Consequently, VAT exemptions have a different impact in countries with different labor regulations. The comprehensive treatment of competition and welfare enables us to provide guidance on how to resolve the policy trade-off between consumer surplus, government tax revenue, and a level playing field in liberalized postal markets.
    Keywords: Value-added tax, indirect taxation, tax regulation, tax exemption, universal service obligation, postal sector
    JEL: H21 H25 L51 L87
    Date: 2010–11
  3. By: Tommaso Monacelli; Roberto Perotti; Antonella Trigari
    Abstract: We estimate the effect of exogenous changes in taxes on the US unemployment rate and on several other labor market variables. Our estimates are based on a revised version of the Romer and Romer (2010) narrative record of exogenous tax innovations, with the additional benefit of distinguishing between capital income and labor income taxes. We first show that accounting for the difference between automatic and discretionary tax changes in the revised specification is crucial in order to obtain an unbiased measure of the tax multipliers. We then obtain the following main results. An increase in tax receipts of one percent of GDP has a sizeable positive impact on the unemployment rate, and a negative impact on hours worked, labor market tightness and job finding probability. The effect on GDP is also sizeable, but somewhat in the mid range of other values found in the literature, due to the fact that we account for the difference between discretionary and automatic changes in tax revenues. The effect on the unemployment rate of variations in business taxes is larger than that of personal income taxes. We suggest that the latter result poses interesting challenges for future research.
    Date: 2011–02
  4. By: Blomquist, Sören (Uppsala Center for Fiscal Studies); Christiansen, Vidar (Department of Economics, University of Oslo); Micheletto, Luca (Uppsala Center for Fiscal Studies)
    Abstract: Several contributions in the optimal taxation literature have emphasized that, when individuals’ preferences are not separable between leisure and other goods, it is desirable to supplement a nonlinear income tax with public provision of private goods. Moreover, it has also been shown that the choice between a topping-up and an opting-out scheme depends on whether the publicly provided good is a complement or substitute with leisure, with opting-out (topping-up) being the preferred scheme for goods which are substitutes (complements)for labor. In this paper, using the self-selection approach to tax analysis, we revisit these results in the presence of tax avoidance, and investigate how public provision interacts with the agents’incentives to engage in tax avoidance. Three results are obtained. First, we show that tax dodging opportunities imply that non-separability between labor and other goods is neither a necessary nor a sufficient condition to make public provision of private goods a welfare-enhancing policy instrument. Second, we show how tax dodging opportunities limit the scope for using topping-up provision schemes as a redistributive device. Finally, we show that, for most of the public provision schemes previously analyzed in the literature, being a welfare-enhancing policy instrument goes hand in hand with weakening the agents’incentives to shelter income from the tax authority. However, we also point out an important exception to this pattern.
    Keywords: optimal nonlinear income tax; public provision of private goods; tax avoidance
    JEL: H21 H26 H42
    Date: 2011–06–01
  5. By: Ojo, Marianne
    Abstract: Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced.
    Keywords: counter party risks; liquidity; European Systemic Risk Board; stability; systemic risk; Shadow Banking; central banks; regulatory arbitrage; OTC derivatives; European Central Bank; supervision; coordination
    JEL: E0 D0 K2 D8
    Date: 2011–06–10

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