|
on Accounting and Auditing |
| By: | Brandstetter, Laura; Jacob, Martin |
| Abstract: | This paper studies the effect of corporate taxes on investment. Using firm-level data on German corporations, we investigate the 2008 tax reform that cut corporate taxes by 10 percentage points. We expect heterogeneous investment responses across firms, since firms with a foreign parent have more cross-country profit shifting opportunities than domestically owned firms. Using a matching difference-in-differences approach, we show that, following the corporate tax cut, domestically owned firms increased investments to a larger extent than foreign-owned firms. Our results imply that corporate tax changes can increase corporate investment but have heterogeneous investment responses across firms. -- |
| Keywords: | Corporate taxation,Investment |
| JEL: | G31 H24 H25 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:153&r=acc |
| By: | Gong, D.; Ligthart, J.E. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: Corporate income taxation, by affecting the after-tax cost of funding, has implications for a bank's incentive to securitize. Using a sample of OECD banks over the period 1999-2006, we fi nd that corporate income taxation led to more securitization at banks that are constrained in funding markets, while it did not affect securitization at unconstrained banks. This is consistent with prior theory suggesting that the tax effects of securitization depend on the extent to which banks face funding constraints. Our results suggest that a country's tax system has distorting effects on banks' securitization decisions and therefore proposals of new taxes on bank profi ts are inappropriate. |
| Keywords: | Securitization;Banking;Corporate Income Tax |
| JEL: | G21 H25 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013067&r=acc |
| By: | John Creedy (The Treasury) |
| Abstract: | This paper provides a technical introduction to the use of the elasticity of taxable income in welfare comparisons and optimal tax discussions. It draws together, using a consistent framework and notation, a number of established results concerning marginal welfare changes and optimal taxes. Particular attention is given to the way value judgements can be specified when using this approach, and results are illustrated using the New Zealand income tax. In addition, some new results, particularly in terms of non-marginal tax changes, are presented. |
| Keywords: | Income taxation; Taxable income; Elasticity of taxable income; Excess burden of taxation; Marginal welfare cost; Optimum tax |
| JEL: | H21 H24 H31 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:13/24&r=acc |
| By: | Richard Fabling; Norman Gemmell; Richard Kneller; Lynda Sanderson (The Treasury) |
| Abstract: | Effective marginal tax rates (EMTRs) can be very different from the statutory rate and vary across firms, reflecting such factors as the extent and nature of taxable deductions (losses, depreciation), asset and ownership structures, and debt/equity financing. We estimate firm-specific EMTRs and related user cost of capital (UCC) measures allowing for shareholder-level taxation using data for 2000-2010 from the Longitudinal Business Database. Examining distributions of various UCC measures we find substantial firm-level heterogeneity, systematic changes as a result of tax reforms between 2004 and 2011, and systematic differences between foreign-owned and domestically-owned firms. Choices among alternative UCC measures make a difference to interpretations. |
| Keywords: | User cost of capital; tax reform; EMTR; New Zealand |
| JEL: | D22 G30 H25 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:13/29&r=acc |
| By: | Hans Fehr; Sabine Jokisch; Ashwin Kambhampati; Laurence J. Kotlikoff |
| Abstract: | We simulate corporate tax reform in a single good, five-region (U.S., Europe, Japan, China, India) model, featuring skilled and unskilled labor, detailed region-specific demographics and fiscal policies. Eliminating the model’s U.S. corporate income tax produces rapid and dramatic increases in the model’s level of U.S. investment, output, and real wages, making the tax cut self-financing to a significant extent. Somewhat smaller gains arise from revenue-neutral base broadening, specifically cutting the corporate tax rate to 9 percent and eliminating tax loop-holes. |
| JEL: | F0 F20 H0 H2 H3 J20 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19757&r=acc |
| By: | Angelopoulos, Konstantinos; Asimakopoulos, Stylianosulos; Malley, James |
| Abstract: | This paper analyses optimal income taxes over the business cycle under a balanced-budget restriction, for low, middle and high income households. A model incorporating capital-skill complementarity in production and differential access to capital and labour markets is developed to capture the cyclical characteristics of the US economy, as well as the empirical observations on wage (skill premium) and wealth inequality. We .nd that the tax rate for high income agents is optimally the least volatile and the tax rate for low income agents the least countercyclical. In contrast, the path of optimal taxes for the middle income group is found to be very volatile and counter-cyclical. We further find that the optimal response to output-enhancing capital equipment technology and spending cuts is to increase the progressivity of income taxes. Finally, in response to positive TFP shocks, taxation becomes more progressive after about two years. |
| Keywords: | optimal taxation, business cycle, skill premium, income distribution, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:edn:sirdps:516&r=acc |
| By: | Pestel, Nico (IZA); Sommer, Eric (University of Cologne) |
| Abstract: | Shifting taxes from labor income to consumption is regularly suggested as a measure to induce work incentives. We investigate the effect of increases in the Value Added Tax on labor supply and the income distribution in Germany, which is compensated by a revenue-neutral reduction in income-related taxes. Based on a dual data base and a microsimulation model of labor supply behavior, we confirm a general regressive impact of such a tax shift in the short run. When accounting for labor supply adjustments, the adverse distributional impact persists for personal income tax reductions, while the overall effects on inequality and progressivity become substantially lower when payroll taxes are reduced, which is due to increased work incentives, especially for low-income households. |
| Keywords: | income and payroll taxes, consumption taxes, microsimulation, labor supply, inequality, Germany |
| JEL: | H21 H23 C63 D31 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7804&r=acc |
| By: | Egebark, Johan (Department of Economics, Stockholm University); Kaunitz, Niklas (SOFI, Stockholm University) |
| Abstract: | In 2007, the Swedish employer-paid payroll tax was cut on a large scale for young workers, substantially reducing labor costs for this group. We estimate a small impact, both on employment and on wages, implying a labor demand elasticity for young workers at around -0.31. Since the tax reduction applied also to excisting employments, the cost of the reform was sizable, and the estimated cost per created job is at more than four times that of directly hiring workers at the average wage. Hence, we conclude that payroll tax cuts are an inefficient way to boost employment for young individuals. |
| Keywords: | Youth unemployment; Payroll tax; Tax subsidy; Labor costs; Exact matching |
| JEL: | H25 H32 J23 J38 J68 |
| Date: | 2013–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_027&r=acc |
| By: | Céspedes, Nikita (Banco Central de Reserva del Perú; PUCP); Kuklik, Michael (Long Island University) |
| Abstract: | The optimal capital income tax rate is 36 percent as reported by Conesa, Kitao, and Krueger (2009). This result is mainly driven by the market incompleteness as well as the endogenous labor supply in a life-cycle framework. We show that this model fails to account for the basic life-cycle features of the labor supply observed in the U.S. data. In this paper, we introduce into this model non-linear wages and inter-vivos transfers into this model in order to account for the life-cycle features of labor supply. The former makes hours of work highly persistent and helps to account for labor choices at the extensive margin over the life cycle. The latter allows us to account for labor choices early in life. The suggested model delivers an optimal capital income tax rate of 7.4 percent, which is significantly lower than what Conesa, Kitao, and Krueger (2009) found. |
| Keywords: | Labor supply, optimal taxation, capital taxation, non-linear wage, inter-vivos transfer |
| JEL: | E13 H21 H24 H25 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:rbp:wpaper:2013-020&r=acc |
| By: | Enrico Alemani; Caroline Klein; Isabell Koske; Cristiana Vitale; Isabelle Wanner |
| Abstract: | This paper presents the new OECD competition law and policies (CLP) indicators which measure the strength and scope of competition regimes in 49 jurisdictions (OECD and non-OECD). The indicators cover areas for which there is a broad consensus among member countries on what constitutes ‘good’ practice for competition regimes. The results suggest that competition regimes are broadly similar across countries in these areas because most countries have adopted all or a large number of the ‘good’ policy settings captured by the indicators. On average, the design of competition laws and policies appears to be closer to best practice in OECD countries than in non-OECD countries. Jurisdictions differ relatively more on the enforcement of competition law than on the competition law itself. Nouveaux indicateurs des lois et politiques de la concurrence en 2013 pour les pays de l'OCDE et non-OCDE Cet article présente les nouveaux indicateurs des lois et politiques de la concurrence (CLP) de l'OCDE portant sur la solidité et la portée des régimes de concurrence dans 49 juridictions (OCDE et non-OCDE). Les indicateurs couvrent des domaines pour lesquels il existe un large consensus entre les pays membres sur ce qui constitue une «bonne» pratique pour les régimes de concurrence. Les résultats suggèrent que les régimes de concurrence sont globalement similaires dans ces domaines parce que la plupart des pays ont adopté la totalité ou une grande partie des « bonnes » pratiques captées par les indicateurs. En moyenne, la conception des lois et des politiques de la concurrence semble se rapprocher davantage des bonnes pratiques dans les pays de l'OCDE que dans les pays non membres. Les juridictions diffèrent relativement plus sur l'application du droit de la concurrence que sur le droit de la concurrence per se. |
| Keywords: | competition law and policy, indicators, lois et politiques de la concurrence, indicateurs |
| JEL: | K21 L4 |
| Date: | 2013–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1104-en&r=acc |