nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2012‒07‒08
eight papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Effect of expenditures in personal income taxation on horizontal equity in Croatia By Hrvoje Šimović
  2. Lifetime versus Annual Tax Progressivity: Sweden, 1968–2009 By Bengtsson, Niklas; Holmlund, Bertil; Waldenström, Daniel
  3. Ein bedingungsloses Grundeinkommen in Form der negativen Einkommensteuer: Eine soziologische und finanzwissenschaftliche Analyse By Sterner, Cornelia
  4. On the incidence of a financial transactions tax in a model with fire sales By Felix Bierbrauer
  5. On the role of backauditing for tax evasion in an agent-based Econophysics model By G. Seibold; M. Pickhardt
  6. Tariff-Tax Reforms in Large Economies By Giovanni Ganelli; Juha Tervala
  7. International governance through soft law: The case of the OECD transfer pricing guidelines By Vega, Alberto
  8. Mandatory disclosure about environmental and employee matters in Italian listed corporate groups' reports By Marisa Agostini; Ericka Costa

  1. By: Hrvoje Šimović
    Abstract: Tax expenditures include all reliefs and other tax procedures used for reducing or deducting the amount of tax that would otherwise have to be paid by taxpayers. There are many personal income tax expenditures in Croatia and they represent an important segment of the tax and social policies. This paper analyses the effect of expenditures in personal income taxation in Croatia on horizontal equity. Accordingly, the analysis has been made according to sources of income. The paper includes the period since 2001, when most reliefs that are still in effect were introduced into the personal income tax system. The analysis includes only those taxpayers who filed annual personal income tax returns, which is a precondition for acquiring most of the tax reliefs. The research findings show that tax reliefs significantly reduce the amount of taxable income, and the differences in the effective tax burden between the analyzed sources of income show that there is horizontal inequity in the personal income tax in Croatia.
    Keywords: personal income tax, annual tax return, tax expenditures, reliefs, horizontal equity, Croatia
    JEL: H24
    Date: 2012–06–14
  2. By: Bengtsson, Niklas (Department of Economics); Holmlund, Bertil (Department of Economics); Waldenström, Daniel (Department of Economics)
    Abstract: This paper analyzes the evolution of tax progressivity in Sweden from both annual and lifetime perspectives. Using a rich micro panel with administrative records of incomes, taxes and benefits over the period 1968–2009, we calculate tax rates across the income distribution accounting for different tax bases as well as the role of transfers. The uniquely long time span also allows us to compute tax progressivity as realized over a cohort’s entire life cycle. Our main finding is that taxes are considerably less progressive over the lifetime than in any single year. In fact, life cycle taxes are close to proportional, bearing a redistributive effect of only a few percent. Intragenerational income mobility seems to be driving this result, but the Swedish economic crisis of the 1990s and the tax reforms of 1971 and 1991 are also important events. Labor income taxes contribute less to progressivity in recent years, whereas transfers to unemployed and old-age pensioners have become increasingly important. Our findings are robust to using different tax rates, tax bases, sample populations, discount rates and reranking controls.
    Keywords: Tax progressivity; Income distribution; Lifetime income; Redistributive effect; Kakwani index; Transfers
    JEL: D31 H20
    Date: 2012–06–13
  3. By: Sterner, Cornelia
    Abstract: In this thesis, the idea of an unconditional basic income is investigated by means of sociological and public finance analyses, with results about structural problems of the Austrian tax and transfer system building the starting point. The unconditional basic income in the form of a negative income tax is therefore discussed and tentatively developed. It is suggested that the negative income tax should be granted unconditionally and individually to all legal and permanent residents without the obligation of services in return. Besides the negative lump sum tax, a lump sum supplement should be granted for caregivers, honorary workers and people incapable of working. Based on a person’s own income a positive tax should be counted against the negative income tax. With the implementation of the suggested model of a negative income tax, basic (financial) needs could be secured and the tax and transfer system could be harmonized, whereby administration effort could be reduced and poverty traps avoided. It is stressed that for the implementation of a comprehensive model of a negative income tax all relevant parameters as well as possible impacts need to be investigated cautiously; suggestions of this thesis therefore need to be seen as a first attempt. The attitude towards an unconditional basic income furthermore influences its successful implementation. Results suggest that great importance needs to be laid on the designation of the model as well as the conservation of the performance principle and self-responsibility to ensure a successful transformation.
    Keywords: basic income; welfare state; securing basic needs; poverty trap
    JEL: E62 Y40 I3 H2 D1 D31 E24 E61 H3
    Date: 2010–11
  4. By: Felix Bierbrauer
    Abstract: This paper studies the impact of a financial transactions tax on a financial market where financial institutions trade with each other. Assets are marked to the market and financial institutions with negative equity are forced out of business. There are two main results: First, if all banks have enough liquidity so that they can honor their short-term obligations, a financial transactions tax is entirely neutral. Second, in a model with correlated investment risk and short-term financing of banks, a financial transactions tax contributes to financial distress and undoes other policy measures that are used to stabilize financial markets.
    Keywords: Financial transactions tax, financial stability, financial markets, cash-in-the-market-pricing, marking-to-market
    JEL: H22 G18 G21 G28
    Date: 2012–06–26
  5. By: G. Seibold; M. Pickhardt
    Abstract: We investigate an inhomogeneous Ising model in the context of tax evasion dynamics where different types of agents are parametrized via local temperatures and magnetic fields. In particular, we analyse the impact of backauditing and endogenously determined penalty rates on tax compliance. Both features contribute to a microfoundation of agent-based econophysics models of tax evasion.
    Date: 2012–06
  6. By: Giovanni Ganelli; Juha Tervala
    Abstract: This paper studies tariff-tax reforms in a calibrated two-region global New Keynesian model composed of a developing and an advanced region. In our baseline calibration, a revenue-neutral reform that lowers tariffs in developing countries can reduce domestic welfare. The reason is that the increase in developing countries welfare due to higher output is dominated by the welfare losses stemming from the deterioration of the terms of trade. On the other hand, the reform increases output and welfare in the advanced countries and in the world as a whole. The effects that we highlight have not been studied in previous contributions to the literature, which typically looks at tariff-tax reforms using a small open economy framework. Nominal rigidities have important implications for adjustment dynamics in our model. In the case of a "point-for-point" reform, for example, price stickiness implies that the international dynamics of output is reversed compared to a revenue neutral reform.
    Keywords: Consumption taxes , Developing countries , Economic models , Tariff reforms , Tax increases , Tax reforms , Tax revenues , Terms of trade ,
    Date: 2012–05–30
  7. By: Vega, Alberto
    Abstract: Soft law plays an important role in the regulation of international tax matters. This paper focuses on the case of the OECD Transfer Pricing Guidelines and analyses the relationship between this non-binding instrument and the formal sources of law. From the perspective of international law, the OECD Guidelines are mainly connected to double tax treaties, but they may also influence customary norms and the general principles of law. From the point of view of domestic legal systems, references to the OECD Guidelines can be found in the tax legislation of some countries and, especially, in the interpretative circulars of the Tax Administrations. Furthermore, in some states the courts have also taken the OECD Guidelines into account in their judgements, which shows that they are almost treated as hard law. However, this practical relevance of the Guidelines does not seem to be in accordance with the process in which they were made in the OECD, which could be more open to the different stakeholders and more transparent. -- Soft Law spielt eine bedeutende Rolle in der Regulation internationaler Steuerangelegenheiten. Das vorliegende Arbeitspapier konzentriert sich auf die OECD-Richtlinien für Verrechnungspreise und analysiert das Verhältnis zwischen diesem nicht bindenden Instrument und den formellen Quellen des Rechts. Aus der Perspektive des Völkerrechts sind die OECD-Richtlinien primär mit Doppelbesteuerungsabkommen verknüpft. Dennoch können diese sowohl Auswirkungen auf das Gewohnheitsrecht als auch auf die allgemeinen Rechtsgrundsätze haben. Aus der Sicht der nationalen Rechtsordnungen finden sich Verweise auf die OECD-Richtlinien in den Steuergesetzen einiger Länder und insbesondere in den interpretativen Rundschreiben von Finanzverwaltungen. Die Berücksichtigung der OECD-Richtlinien durch die Gerichte einiger Staaten weist außerdem darauf hin, dass diese fast wie hard law behandelt werden. Trotzdem scheint die praktische Relevanz der Richtlinien nicht im Einklang mit dem Prozess zu stehen, in dem diese von der OECD geschaffen wurden. Dieser könnte offener für unterschiedliche Interessengruppen sein und mehr Transparenz aufweisen.
    Keywords: soft law,transfer pricing,international taxation,OECD,international governance,recommendations,guidelines
    Date: 2012
  8. By: Marisa Agostini (Department of Management, Università Ca' Foscari Venezia); Ericka Costa (Department of Computer and Management Sciences, Università di Trento)
    Abstract: This paper analyzes the impact of a new specific regulation on the disclosure of environmental and employee matters in both consolidated-annual reports and social-environmental reports. It represents the first comprehensive attempt, as far as we are aware, at evaluating the impact of the 2.2.2007 Italian legislative decree n.32, following the 51/2003/CE directive, in both the consolidated-annual and social-environmental reports. All the Italian corporate groups which have drawn up stand-alone social-environmental reports both in 2005 and in 2010 have been selected: for each one of them also the consolidated-annual reports have been analyzed according to the dictate of the examined regulation. The results show the differences in corporate disclosure between the reports issued in 2005 (i.e. IAS first year of adoption and before the examined regulation) and those issued in 2010 (i.e. after the implementation of D.Lgs. 32/2007 which imposed to apply the Directive 51/2003/CE): there is a twofold increase, both in the number of groups which have a section dedicated to environmental and employee matters in the report on operations and in the value relevance assigned to non-financial indicators.
    Keywords: Environmental and Employee Matters; Non-financial indicators; Social-Environmental Reports; Consolidated-annual reports; Content Analysis.
    JEL: M41 M48 Q56 Q58
    Date: 2012–07

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