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on Accounting and Auditing |
| By: | Jara Tamayo, Holguer Xavier; Sutherland, Holly |
| Abstract: | This paper presents baseline results from the latest version of EUROMOD (version F6.36+), the tax-benefit microsimulation model for the EU. First, we briefly report the process of updating EUROMOD. We then present indicators for income inequality and risk of poverty using EUROMOD and discuss the main reasons for differences between these and EU-SILC based indicators. We further compare EUROMOD indicators across countries and over time between 2009 and 2012. Finally, we provide estimates of marginal effective tax rates (METR) for all 27 EU countries in order to explore the effect of tax and benefit systems on work incentives at the intensive margin. Throughout we highlight both the potential of EUROMOD as a tool for policy analysis and the caveats that should be borne in mind when using it and interpreting results. This paper updates the work reported in EUROMOD Working Paper EM3/2013. |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em13-13&r=acc |
| By: | Strawczynski, Michel |
| Abstract: | Most studies on cyclical fiscal policy ignore statutory taxes due to a lack of data. In this paper I build on singular data on statutory tax rates in Israel, in order to study how they are changed by the government in expansions and recessions. After differentiating between ideological (exogenous) tax changes, to those that react to the cycle (endogenous) using Romer and Romer (2010) technique, I check whether endogenous statutory tax rates are a-cyclical or counter-cyclical, as recommended by theoretical models. I found that while direct taxes are a-cyclical, indirect taxes (and in particular VAT) are changed procyclically. A pseudo-panel analysis based on the different types of taxation and a panel analysis based on indirect taxation, show that the main reason for statutory tax changes is the existence of economic crises; this explanation is stronger than economic considerations like population or expenditure growth, legal considerations like the rigidity for changing statutory taxes, and income distribution considerations like the incidence on the bottom income decile. |
| Keywords: | Cyclicality, Statutory Taxes, Crisis |
| JEL: | H20 H30 |
| Date: | 2013–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48821&r=acc |
| By: | Assaf Razin (Department of Economics) |
| Abstract: | The paper revisit the issue of whether tax competition is a race to the bottom. I analyze tax competion among a continuum of competing host countries facing an upward†sloping supply of would be igrants. Capital move freely across the host country economies. I show how the fiscal burden of migration brings out a tax competition equilibrium whereby taxes on labor and capital income are higher than under a coordination equilibrium.I then introduce foreign direct investment and show how it counteract the forces for high taxation. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed013:48&r=acc |
| By: | Marko Köthenbürger (ETH Zurich and CESifo); Michael Stimmelmayr (University of Munich and CESifo) |
| Abstract: | There is ample evidence that internal capital markets incur efficiency costs for multinational enterprises (MNEs). This paper analyzes whether tax avoidance behavior interacts with the costs of running an internal capital market and how policies of competing governments respond to it. We show that the interaction in itself may lead to profit taxes that are too high (low) from a social perspective, provided the costs are attenuated (magnified) by higher profit taxes. We also show that internal efficiency costs might render infrastructure provision inefficiently low. Further, we clarify the implications of the MNE’s decision to set up an internal capital market and the effect of external finance on the behavior of competing governments. |
| Keywords: | fiscal competition, multinational firms, internal efficiency costs, corporate finance, corporate tax avoidance. |
| JEL: | H25 D21 F23 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:13-02&r=acc |