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on Accounting and Auditing |
| By: | Basu, Arnab K. (College of William and Mary); Chau, Nancy (Cornell University); Siddique, Zahra (IZA) |
| Abstract: | We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion, the extent of minimum wage non-compliance, and the size of the informal workforce. Our approach allows us to examine (i) the distinction between determinants of firm-level reported wage distribution and actual wage distribution, (ii) the complementarity of tax and minimum wage enforcement, (iii) the impact that a minimum wage reform has on tax and minimum wage compliance, and (iv) the impact that a tax policy reform has on tax and minimum wage compliance. We conclude with the design of optimal minimum wage and tax policies (even in the complete absence of minimum wage enforcement). We do so based on two objectives derived from popular concerns associated with an unchecked expansion of informality: tax revenue maximization, and poverty alleviation among workers. |
| Keywords: | tax evasion, minimum wage reform, flat tax reform, poverty, informality |
| JEL: | J3 J6 O17 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6228&r=acc |
| By: | Tomas Silva (Office for Strategy and Studies, Portuguese Ministry of Economy); Sergio Lagoa (Department of Political Economy, ISCTE - University Institute of Lisbon) |
| Abstract: | European countries are facing an ever-increasing competition for Foreign Direct Investment (FDI). This paper studies how corporate taxes affect the location of FDI in Europe. Firm-level data is used to estimate a conditional logit model. We start by analysing the impact of the level and volatility of three different tax rates on FDI. Next, we analyse how economic and monetary integration influences the effect of taxes on FDI. The interaction between taxes and the upward and downward cycles of FDI is also analysed. Finally, we focus on how the impact of taxes depends on project characteristics. We conclude that taxes play a significant role in attracting FDI, but the issues analysed imply that there are some nuances in this relation, many of them relevant for policy makers. |
| Keywords: | FDI, Location, Taxes, Conditional Logit Model |
| JEL: | F21 H25 H32 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0044&r=acc |
| By: | Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber |
| Abstract: | The nexus between government revenue and government expenditure always wins the attention of policy makers and think tanks while they work four making fiscal policies for an economy. This paper is an empirical investigation on the unidirectional causality between government expenditures and the revenues, which government collects from public in shape of various levied taxes. Annual data for Pakistan from the period of 1979 to 2010 for governmental expenditures and its tax revenue have been collected. While, the unidirectional and bidirectional causality were interrogated via applying Granger causality for the outlined variables. The results indicate that there is an uni-directional causality between the expenditures and revenues, which runs from tax revenues to govt. expenditures, that is the previous lags of tax revenue has a causal impact on the current govt. spending. |
| Keywords: | tax revenue; government expenditure; fiscal policy; granger causality;economy |
| JEL: | E62 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35686&r=acc |
| By: | Philip J. Cook; Christine Piette Durrance |
| Abstract: | On January 1, 1991, the federal excise tax on beer doubled, and the tax rates on wine and liquor increased as well. These changes are larger than the typical state-level changes that have been used to study the effect of price on alcohol abuse and its consequences. In this paper, we develop a method to estimate some important effects of those large 1991 changes, exploiting the interstate differences in alcohol consumption. We demonstrate that the relative importance of drinking in traffic fatalities is closely tied to per capita alcohol consumption across states. As a result, we expect that the proportional effects of the federal tax increase on traffic fatalities would be positively correlated with per capita consumption. We demonstrate that this is indeed the case, and infer estimates of the price elasticity and lives saved in each state. We repeat this exercise for other injury-fatality rates, and for nine categories of crime. For each outcome, the estimated effect of the tax increase is negatively related to average consumption, and that relationship is highly significant for the overall injury death rate, the violent crime rate, and the property crime rate. A conservative estimate is that the federal tax reduced injury deaths by 4.7%, or almost 7,000, in 1991. |
| JEL: | H2 H23 I12 K42 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17709&r=acc |
| By: | Canagarajah, Sudharshan; Brownbridge, Martin; Paliu, Anca; Dumitru, Ionut |
| Abstract: | Romania, along with many other countries in the European Union, faces daunting fiscal challenges. Fiscal balances deteriorated sharply following the global economic crisis, forcing Romania to implement a fiscal consolidation that was one of the largest in the European Union, but which may not be sustainable without a recovery of economic growth. Although the ratio of public debt to gross domestic product is still relatively modest, at around 35 percent, long-term fiscal solvency is threatened by the costs of funding the public pension system in the face of adverse demographic shifts over the next 50 years. Because of widespread tax evasion, the tax system in Romania is one of the least efficient in the European Union. Tax reforms that can reduce the amount of tax lost to evasion and fraud could make a major contribution to enhancing fiscal sustainability. |
| Keywords: | Debt Markets,Public Sector Expenditure Policy,Emerging Markets,Public Sector Economics,Fiscal Adjustment |
| Date: | 2012–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5927&r=acc |
| By: | Harin, Alexander |
| Abstract: | An introduction to interval analysis of distributions, as a new direction of interval analysis, is presented, including illustrated examples. New formulas and additional restrictions for intervals of moments, including mean value, are obtained. Among them are Novoselov formulas for moments and the so-called “Ring of formulas” for mean values. In the scope of the interval analysis of distributions, the ruptures for mean values are considered. The interval analysis of distributions may be used, e.g., in probability theory, modeling, forecasting, economics, utility theory. |
| Keywords: | interval analysis; distribution; mean value; moment; rupture; probability theory; utility theory; economics; modeling; |
| JEL: | C13 D81 D3 C0 C02 |
| Date: | 2011–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35663&r=acc |
| By: | Harin, Alexander |
| Abstract: | The proof of the theorem of existence of the ruptures, namely the proof of maximality, is improved. The theorem may be used in economics and explain the well-known problems such as Allais’ paradox. Illustrated examples of ruptures are presented. |
| Keywords: | utility; utility theory; probability; uncertainty; decisions; economics; Allais paradox; risk aversion; |
| JEL: | D81 C0 C44 G22 C02 C1 |
| Date: | 2011–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35650&r=acc |