nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2012‒04‒10
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Featuring Tax Education in Non-accounting Curriculum: Survey Evidence By Mohd Amran Mahat; Lai Ming Ling
  2. Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden By Edmark, Karin; Gordon, Roger
  3. Capital Requirements under Basel III in Andean Countries: The Cases of Bolivia, Colombia, Ecuador and Peru By Arturo Galindo; Liliana Rojas-Suárez; Marielle del Valle
  4. Tax avoidance and fiscal limits: Laffer curves in an economy with informal sector By Lukas Vogel
  5. Stock prices under pressure; How tax and interest rates drive returns at the turn of the tax year By JOhnny Kang; Tapio Pekkala; Christopher Polk; Ruy Ribeiro
  6. An Evaluation of the Swedish Earned Income Tax Credit By Edmark, Karin; Liang, Che-Yuan; Mörk, Eva; Selin, Håkan
  7. Gender-Based and Couple-Based Taxation By Bastani, Spencer

  1. By: Mohd Amran Mahat; Lai Ming Ling
    Abstract: Purpose –This paper aimed (i) to solicit undergraduates‟ opinions on tax education, and (ii) to identify undergraduates‟ preferences on taxation topics. Design/methodology/approach – The paper used a survey to collect data. Survey questionnaires were personally administered on 575 undergraduates from accounting and non-accounting faculties in one of the public universities in Malaysia. Findings – The findings revealed that more than 90% of the respondents perceived that tax education is important and relevant, and should be introduced at the undergraduate levels. The survey also found that „Personal Taxation‟ and „Tax Planning for Individuals‟ were the two most preferred tax topics that undergraduates wished to learn. Originality/value – The paper support the call to introduce tax education into non-accounting curriculum in disseminating tax knowledge for better tax compliance among future taxpayers. --
    Keywords: Tax education,Non-accounting curriculum,Undergraduates,Malaysia
    Date: 2011
  2. By: Edmark, Karin (Research Institute of Industrial Economics (IFN)); Gordon, Roger (Research Institute of Industrial Economics (IFN))
    Abstract: This paper makes use of individual data for 2004 to 2008 on owners of closely-held businesses in Sweden to estimate the role of both tax and non-tax determinants in the choice to be a closely-held corporation vs. a proprietorship. While lower-income individuals face relatively neutral incentives, higher income households face strong tax incentives to be corporate. The data suggest a strong response to these tax incentives. Many conventional non-tax determinants are confirmed in the data as well.
    Keywords: Self-employment; Entrepreneurship; Taxation of closely-held businesses; Business organizational form
    JEL: G32 G38 H25
    Date: 2012–03–26
  3. By: Arturo Galindo; Liliana Rojas-Suárez; Marielle del Valle
    Abstract: Since the eruption of the global financial crisis in 2008 international setting bodies and local regulators around the world have been hard at work designing and implementing new regulatory frameworks to deal with the regulatory deficiencies that were exposed during the crisis. In particular, there is now a consensus that existing regulations in developed countries were not able to contain excessive risk-taking activities by financial institutions in this group of countries during the pre-crisis period. Among these regulations, the newly proposed set of reform measures developed by the Basel Committee on Banking Supervision (BCBS): "Basel III: A global regulatory framework for more resilient banks and banking systems" (2011) is perhaps the one that has attracted most attention worldwide because a central focus of the recommendations lies on important changes in banks' regulatory capital requirements. Where does Latin America stand with respect to capital requirements? Can banks in the region satisfy with ease the new capital requirements of Basel III or will the implementation of this new set of capital recommendations require large efforts from banks in the region? This paper deals with these questions for the case of four Andean countries: Bolivia, Colombia, Ecuador and Peru.
    Keywords: Financial Sector :: Financial Policy, Capital Requirements under Basel III, financial framework, financial reform
    Date: 2011–12
  4. By: Lukas Vogel
    Abstract: The paper extends the QUEST III model by home production to discuss fiscal limits in an economy with tax avoidance. It finds that revenue-maximising labour and corporate tax rates in the benchmark model are relatively high (54% and 72%) compared to current EU-average implicit tax rates. No such limit is found for the consumption tax. Higher substitutability between market and home production flattens the Laffer curves for labour and corporate taxation and introduces one for the consumption tax. Although higher tax rates raise additional tax revenue, the economic costs of higher distortionary taxation in terms of output contraction are substantial.
    JEL: E62 H20 H30
    Date: 2012–01
  5. By: JOhnny Kang; Tapio Pekkala; Christopher Polk; Ruy Ribeiro
    Abstract: We show that the level of interest rates determines the magnitude of mispricing at the turn of the tax year, as investors face the trade-o¤ between selling a temporarily depressed stock this year and selling next year, but delaying tax implications by one year. Interest rates do explain the predictable variation in US returns and selling behaviour around the turn of the year. Similar results in the UK provide out-of-sample confirmation, as tax and calendar years di¤er. Moreover, part of the variation in the risks and abnormal returns of size, value, and momentum factors can be linked to tax-motivated trading.
    Date: 2011–02
  6. By: Edmark, Karin (Research Institute of Industrial Economics (IFN)); Liang, Che-Yuan (Department of Economics); Mörk, Eva (Department of Economics); Selin, Håkan (Department of Economics)
    Abstract: Over the last twenty years we have seen an increasing use of in-work tax subsidies to encourage labor supply among low-income groups. In Sweden, a non-targeted earned income tax credit was introduced in 2007, and was reinforced in 2008, 2009 and 2010. The stated motive of the reform was to boost employment; in particular to provide incentives for individuals to go from unemployment to, at least, part-time work. In this paper we try to analyze the extensive margin labor supply effects of the Swedish earned income tax credit reform up to 2008. For identification we exploit the fact that the size of the tax credit, as well as the resulting average tax rate, is a function of the municipality of residence and income if working. However, throughout the analysis we find placebo effects that are similar in size to the estimated reform effects. In addition, the results are sensitive with respect to how we define employment, which is especially true when we analyze different subgroups such as men and women, married and singles. Our conclusion is that the identifying variation is too small and potentially endogenous and that it is therefore not possible to use this variation to perform a quasi-experimental evaluation of the Swedish EITC-reform.
    Keywords: Labor supply; Labor force participation; Tax incentives
    JEL: H24 J21
    Date: 2012–02–01
  7. By: Bastani, Spencer (Uppsala Center for Fiscal Studies)
    Abstract: In a recent paper Alesina et al. (2011) construct a model in which different labor supply elasticities for men and women emerge endogenously from intra-household bargaining. In this paper I explore the optimal tax implications of their model in an economy with both singles and couples and inequality across as well as within households. In the model, the welfare of married women can be improved by lowering taxes for single women. Moreover, if single men earn more than single women, the welfare of married women can alternatively be improved by a gender-neutral tax scheme which taxes singles at a higher rate. Because the government is concerned not only with equalizing utilities within families, but also with the redistribution between high income and low income households, gender-based adjustments in the income tax must be weighed against the welfare consequences of changing the progressivity of the tax system. I find that larger lump-sum transfers to women is always optimal. Interestingly, marginal tax rates, on the other hand, should be lower for women only if the exogenous bargaining power of men is moderate. The welfare gains of gender based taxation are sizable and the welfare gains of having tax instruments which depend on household composition are even larger.
    Keywords: optimal taxation; tagging; family economics; intra-household bargaining
    JEL: D13 H21 J16 J20
    Date: 2012–03–28

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