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on Accounting and Auditing |
| By: | Ojo, Marianne |
| Abstract: | Parts I and II of this paper are aimed at providing a comprehensive overview of, and responses to, four very vital components of the consultative processes which have contributed to the new framework known as Basel III. The papers will approach these components in the order of the consultative processes, namely, the capital proposals, the liquidity proposals and the Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability. The capital proposals comprise proposals aimed at strengthening the resilience of the banking sector, the proposal relating to international framework for liquidity risk measurement, standards and monitoring and, the countercyclical capital buffer proposal. Whilst the capital proposals have been welcomed, there has been growing realization since the aftermath of the recent Financial Crisis that banks which have been complying with capital adequacy requirements could still face severe liquidity problems. As well as highlighting the importance of introducing counter cyclical capital buffers, the response to the countercyclical proposal draws attention to the need for greater focus on more forward looking provisions, as well as provisions which are aimed at addressing losses and unforeseen problems attributed to “maturity transformation of short-term deposits into long term loans.” The Committee's acknowledgement of negative incentives arising from the use of external ratings to determine regulatory capital requirements and proposals to mitigate these incentives is well - founded – however, regulators will also be able to manage, with greater ability, systemic risks to the financial system during such periods when firms which are highly leveraged become reluctant to lend where more market participants such as credit rating agencies, could be engaged in the supervisory process. |
| Keywords: | counter cyclical buffers; credit ratings; credit rating agencies; liquidity risks; pro cyclicality; loan loss provisions; financial crises; bank; regulation; leverage; capital; insolvency; financial crises; moral hazard; Basel III |
| JEL: | K2 E32 D8 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33082&r=acc |
| By: | Gamage, David; Heckman, Devin |
| Abstract: | We propose a novel solution for states that wish to tax interstate e-commerce based on fully and adequately compensating remote vendors for all tax compliance costs. We argue that our proposed solution is compatible with the Quill framework for when states can constitutionally impose burdens on remote vendors. We argue that unlike our proposed solution, the recent state attempts to tax interstate e-commerce through so-called “Amazon laws†are unconstitutional, ineffective, or both. We thus urge the states to adopt our proposed approach as the best way forward for state taxation of interstate e-commerce. |
| Keywords: | Constitutional Law, Legislation, Public Law and Legal Theory, State and Local Government Law, Taxation, Taxation-State and Local, Taxation-State and Local |
| Date: | 2011–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:oplwec:2202965&r=acc |
| By: | Stephane Auray (CREST (Ensai), Universite du Littoral Cote d'Opale (EQUIPPE), Universite de Shebrooke (GREDI) and CIRPEE); Aureline Eyquem (GATE, UMR 5824, Universite de Lyon, and Ecole Normale Superieure de Lyon, and GREDI); Paul Gomme (Concordia University and CIREQ) |
| Abstract: | Recent financial crises in Europe as well as the periodic battles in the U.S. over the debt ceiling point to the importance of fiscal discipline among developed countries. This paper develops an open economy model, calibrated to the U.S. and a subset of the EMU, to evaluate the impact of various permanent tax changes. The first set of experiments considers a targeted one percentage point reduction in the government deficit-to-GDP ratio through raising one of: the consumption tax, the labor income tax, or the capital income tax. In terms of welfare, the consumption tax is found to be the least costly of the tax increases. A second set of experiments looks at deficit-neutral tax changes: partially replacing the capital income tax with either a higher labor income tax or higher consumption tax; and partially replacing the labor income tax with an increased consumption tax. Reducing reliance on capital income taxation is welfare-enhancing, although it leads to short term losses. Reducing labor income taxation improves international competitiveness and is welfare-improving. |
| Keywords: | Fiscal policies, open economies, public deficits, tax reforms |
| JEL: | E31 E62 F41 |
| Date: | 2011–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:crd:wpaper:11004&r=acc |
| By: | Hélène EHRHART (Centre d'Etudes et de Recherches sur le Développement International); Christian EBEKE |
| Abstract: | We study whether the adoption of the value-added tax (VAT) in developing countries was an effective way of stabilizing tax revenues. Using a large panel of 103 developing countries observed over 1980-2008 and several alternative estimation methods in order to deal with the self-selection bias and the endogeneity issue of VAT adoption, we find robust evidence that the presence of VAT leads to significantly lower tax revenue instability. On average, countries with a value added tax experience tax revenue instability forty to fifty percent lower than the countries which do not have a VAT system. Those effects decrease with the levels of economic development and trade openness. |
| Keywords: | Tax Instability, Value Added Tax, Macroeconomic Fluctuations, developing countries |
| JEL: | O10 E32 H20 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1280&r=acc |
| By: | Sergio Salgado I. |
| Abstract: | In this paper I study a new business cycle fact recently documented by Bachmann and Bayer (2011): the dispersion of the distribution of investment rates across firms is procyclical. Using data from German firm, the authors find a correlation coefficient between the standard deviation of investment distribution and the cyclical component of output of 0.45. They also report a correlation coefficient for US economy of 0.33. Using a model similar to Khan and Thomas's (2003), that is standard to heterogeneous firms literature, I obtain a correlation coefficient of 0.57. In the model I also consider a government sector that collects taxes on corporate profits. In such model, with a corporate tax of 23.5%, which corresponds to German economy, I obtain a correlation coefficient of 0.46 and when I consider a corporate tax rate of 18.79% that corresponds to US economy I find a correlation coefficient of 0.51. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:638&r=acc |
| By: | Ericson, Peter (Empirica); Flood, Lennart (Göteborg University) |
| Abstract: | This paper presents estimates of individuals' responses in hourly wages to changes in marginal tax rates. Estimates based on register panel data of Swedish households covering the period 1992 to 2007 produce significant but relatively small net-of-tax rate elasticities. The results vary with family type, with the largest elasticities obtained for single males and the smallest for married/cohabitant females. Despite these seemingly small elasticities, evaluation of the effects of a reduced state tax using a microsimulation model shows that the effort effect matters. The largest effect is due to changes in number of working hours yet including the effort effect results in an almost self-financed reform. As a reference to the earlier literature we also estimate taxable income elasticities. As expected, these are larger than for the hourly wage rates. However, both specifications produce significantly and positive income effects. |
| Keywords: | income taxation, hourly wage rates, work effort, micro simulation |
| JEL: | C8 D31 H24 J22 J31 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5930&r=acc |