nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2013‒09‒24
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Stock-Flow Adjustments, Government’s Integrated Balance Sheet and Fiscal Transparency By Mike Seiferling
  2. Effects of supervision on tax compliance: Evidence from a field experiment in Austria By Katharina Gangl; Benno Torgler; Erich Kirchler; Eva Hofmann
  3. Pathways to Tax Reform Revisted By Leonard Burman; ;
  4. Does size asymmetry exacerbate the inefficiency of tax competition? By Yutao Han; Patrice Pieretti; Benteng Zou
  5. Tax Coordination, Tax Competition, and Revenue Mobilization in the West African Economic and Monetary Union By Mario Mansour; Gregoire Rota Graziosi
  6. Migration and Tax Competition Within a Union By Razin, Assaf; Sadka, Efraim
  7. Global Imbalances and Capital Account Openness: an Empirical Analysis By Jamel Saadaoui

  1. By: Mike Seiferling
    Abstract: This paper re-examines the stock-flow discrepancies of government debt and deficits and correlation with fiscal transparency. Applying the fully integrated relationship between financial stocks and flows allows for a more refined analysis of the deterministic components that make up the ‘stock-flow’ residual. Using partial measures of these stock-flow residuals, several empirical studies have found them to be significantly correlated with fiscaltransparency, inflation, fiscal rules, and banking crisis. Using fully integrated public finance data from the IMF Government Finance Statistics Yearbook for a sample of 22 countries, the findings in this paper suggest that stock-flow residuals have a significantly smaller magnitude than previously assumed and are, in fact, not correlated with fiscal transparency. A stronger determinant of fiscal transparency scores appears to be the actual reporting of fiscal data covering general government, especially a full financial balance sheet.
    Keywords: Government finance statistics;Accounting;Fiscal transparency;Public finance;stock flow adjustments, government finance statistics, fiscal transparency, public finance
    Date: 2013–03–07
  2. By: Katharina Gangl; Benno Torgler; Erich Kirchler; Eva Hofmann
    Abstract: The tax compliance literature has mainly focused on individual tax evasion rather than firm tax evasion. In general, there is a lack of field experiments on the topic, and measuring tax compliance is challenging. To address this shortcoming in the literature, we conduct a field experiment on firm tax compliance looking at newly founded firms. As a novelty we explore how firms react to closer supervision by the tax administration, looking at timely paying which has no measurement biases. Interestingly, we observe a crowding-out effect of supervision on timely paying of taxes. On the other hand, for those who were non-compliant, supervision reduced the tax amount that was due.
    Keywords: : tax compliance, tax evasion, field experiment, deterrence, tax enforcement, supervision
    JEL: H26 C93 K42
    Date: 2013–08–19
  3. By: Leonard Burman (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); ;
    Abstract: The U.S. income tax badly needs reform. It is complex, unfair, and inefficient. It doesn’t come close to raising enough revenue to finance government expenditures, and won’t any time in the foreseeable future unless it is revised. Raising tax rates could increase revenues, but it wouldn’t lessen the complexity and would magnify the unfairness and efficiency costs. Not surprisingly, proposals for reform abound. Income tax reform proposals would virtually all trim so-called tax expenditures, the 200 or so exclusions, deductions, and credits that are designed to provide subsidies for particular activities or groups. This would surely make the late Stanley Surrey smile. He invented the term tax expenditure and instructed the Treasury Department to compile a list and tally up their cost. He viewed cuts in tax expenditures as the “pathway to tax reform,†and in 1973 made the case in a book of that title. Surrey and latter-day reformers are surely right that cutting tax expenditures could raise revenue while reducing the economic cost of the tax system and making it simpler and fairer. The only drawback is political: voters like tax expenditures, the biggest of which are the mortgage interest deduction and the tax break on employer-sponsored health insurance. Simply eliminating people’s favorite tax breaks is unlikely to win much public support. This paper revisits Surrey’s pathway, examining various proposals to eliminate, reduce, or reformulate tax expenditures as part of tax reform. I start by outlining the need for tax reform. Then I examine various proposed paths to achieve it. I discuss options to cut tax expenditures and the efficacy of a VAT or carbon tax as a supplement to the income tax. The concluding section summarizes the potential pathways and a few dead ends on the way to tax reform. Key Words: Tax Expenditures; Federal Budget; Deficits; Tax Reform JEL No. H21, H24, H50, H60
  4. By: Yutao Han (CREA, Université du Luxembourg); Patrice Pieretti (CREA, Université du Luxembourg); Benteng Zou (CREA, Université du Luxembourg)
    Abstract: Many authors demonstrate that the tax gap resulting from tax competition increases with the size asymmetry of the competing countries. Consequently, increasing country-size disparities exacerbates the inefficiency of tax competition. The aim of this note is to show that this classical view has no general validity if we consider that countries compete not only in taxes but also in the provision of infrastructure. The simple model we develop for this purpose demonstrates that the effect of size disparity on efficiency depends crucially on the degree of international capital mobility.
    Keywords: tax competition, social welfare, inefficiency, infrastructure
    JEL: H21 H73 F21
    Date: 2013–08
  5. By: Mario Mansour; Gregoire Rota Graziosi
    Abstract: We review the current state of the West African Economic and Monetary Union’s tax coordination framework, against the main objectives of the WAEMU Treaty of 1994: reduce distortions to intra-community trade, and mobilize domestic tax revenue. The process of tax coordination in WAEMU is one of the most advanced in the world—de jure at least—, but remains in many areas ineffective de facto. Nevertheless, the framework has, to some extent, succeeded in converging tax systems, particularly statutory tax rates, and may have contributed to improving revenue mobilisation. Important lessons can be drawn from the WAEMU experience, particularly in terms of whether coordination should take the form of harmonization through a top-down approach, or a softer approach of sharing best practice and limiting certain types of tax competition.
    Keywords: Tax policy;West African Economic and Monetary Union;Revenue mobilization;Tax revenues;tax coordination; tax harmonization; tax competition.
    Date: 2013–07–09
  6. By: Razin, Assaf; Sadka, Efraim
    Abstract: We develop a stylized EU-type model of a union consisting of rich, capital-abundant and productive, countries, and poor,capital-scarce and low productivity, countries, in order to explain key features of tax policies and inter- and intra-migration flows. Our purpose is to explain the differences in the tax rates and the generosity of the welfare state, on the one hand, and migration flows, on the other hand, between rich and poor countries, within the union, and migration flows from the rest of the world. We identify a fiscal externality which makes the tax competition and the tax coordination regime to be different one from the other.
    Keywords: capital mobility; fiscal leakage; labor mobility
    JEL: F2 H2
    Date: 2013–08
  7. By: Jamel Saadaoui (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université Louis Pasteur - Strasbourg I)
    Abstract: We investigate if capital account openness has played a major role in the evolution of global imbalances on the period 1980-2003. We estimate, with panel regression techniques, the impact of capital account openness on medium-term current account imbalances for industrialized and emerging countries by using a de jure measure of capital account openness (the KAOPEN index (Chinn and Ito, 2002, 2006) and a de facto measure of capital account openness (the gross foreign assets measured as the sum of foreign assets and foreign liabilities). By increasing the opportunities of overseas investments, the relative capital account openness has had a positive impact on medium-term current account balances of industrialized countries (because of downward pressures on domestic investment rates). Conversely, the relative capital account openness has had a negative impact on medium-term current account balances of emerging countries (because of upward pressures on domestic investment rates). Nowadays, current account imbalances are larger in reason of higher capital mobility. Nevertheless, a large part of imbalances may be considered as unrelated with the evolution of macroeconomic fundamentals.
    Keywords: Global Imbalances; Capital Account Openness; Panel Data
    Date: 2013–06–24

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