nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2014‒08‒28
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Do dividend taxes affect corporate investment? By Alstadsæter, Annette; Jacob, Martin
  2. Inheritance Taxation in Sweden, 1885–2004: The Role of Ideology, Family Firms and Tax Avoidance By Henrekson, Magnus; Waldenström, Daniel
  3. Tax Amnesty (in Russian) By Kateryna Bornukova; Dzmitry Kruk; Gleb Shymanovich; Yuri Tserlukevich
  4. Can tax simplification help lower tax corruption ? By Awasthi, Rajul; Bayraktar, Nihal
  5. Heterogeneous Tax Sensitivity of Firm-level Investments By Egger, Peter; Erhardt, Katharina; Keuschnigg, Christian
  6. Fair-Value Estimates of the Cost of Selected Federal Credit Programs for 2015 to 2024 By Congressional Budget Office

  1. By: Alstadsæter, Annette; Jacob, Martin
    Abstract: We test whether dividend taxes affect corporate investments. We exploit Sweden's 2006 dividend tax cut of 10 percentage points for closely held corporations and five percentage points for widely held corporations. Using rich administrative panel data and triple-difference estimators, we find that this dividend tax cut affects allocation of corporate investment. Cashconstrained firms increase investment after the dividend tax cut relative to cash-rich firms. Reallocation is stronger among closely held firms that experience a larger tax cut. This result is explained by higher nominal equity in cash-constrained firms and by higher dividends in cash-rich firms after the tax cut. The heterogeneous investment responses imply that the dividend tax cut raises efficiency by improving allocation of investment. --
    Keywords: Investment,Dividend Taxation,Private Firms
    JEL: G30 G31 H25
    Date: 2014
  2. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Waldenström, Daniel (Uppsala University)
    Abstract: This paper studies the evolution of the modern Swedish inheritance taxation from its introduction in 1885 to its abolishment in 2004. Our contribution is twofold. First, we compute annual effective inheritance tax rates for differently sized bequests and different types of inherited assets (non-firm wealth and family firm equity), accounting for all relevant exemptions, deductions and valuation discounts. Second, we try to account for the changes in inheritance taxation. Ideology rather than mass mobilization or revenue maximization appears to drive the sharp tax increases of the 1930s through the 1960s. We document increased opportunities for tax planning for the wealthy, in particular a series of drastic tax cuts on inherited family firms from the 1970s onwards. This rise of avoidance opportunities for the rich while more and more middle-class heirs paid notable inheritance taxes contributed to a loss of legitimacy for the tax and its ultimate repeal in 2004.
    Keywords: Gift tax; Inheritance tax; Estate tax; Tax avoidance; Excess burden; Entrepreneurship; Ownership transfers of family firms
    JEL: D31 H20 K34
    Date: 2014–07–06
  3. By: Kateryna Bornukova (Belarusian Economic Research and Outreach Center (BEROC)); Dzmitry Kruk (Belarusian Economic Research and Outreach Center (BEROC)); Gleb Shymanovich; Yuri Tserlukevich (Department of Finance, Arizona State University)
    Abstract: This paper explores international experience of tax amnesties. Despite the popular use of tax amnesties, the results are mixed. The main advantage of the tax amnesty is the possibility to increase tax collections and improve tax compliance. However, it does not account for adverse effect of amnesties on tax compliance and high direct and indirect costs of amnesties. The success of the tax amnesty depends largely on the state of the economy. We have identified target groups and discussed a question of a potential tax amnesty in Belarus.
    Keywords: Tax Amnesty, Tax Evasion, Belarus, Eastern Europe, Tax Policy and Reforms
    JEL: H26
    Date: 2014–08
  4. By: Awasthi, Rajul; Bayraktar, Nihal
    Abstract: This paper seeks to find empirical evidence of a link between tax simplification and corruption in tax administration. It attempts to do this by first defining"tax simplicity"as a measurable variable and exploring empirical relationships between simpler tax regimes and corruption in tax administration. Corruption in tax administration is calculated with data series from the World Bank's Enterprise Survey Database. The focus is on business taxes. The study includes 104 countries from different income groups and regions of the world. The time period is 2002-12. The empirical findings support the existence of a significant link between the measure of tax corruption and tax simplicity, so a less complex tax system is shown to be associated with lower corruption in tax administration. It is predicted that the combined effect of a 10 percent reduction in both the number of payments and the time to comply with tax requirements can lower tax corruption by 9.64 percent. Some interesting regional differences are observed in the results. Similarly, the income level of countries plays an important role in determining the impact of tax simplification on tax corruption; specifically, the link is stronger for lower-income level countries. The positive link between tax simplicity and lower tax corruption has useful policy implications.
    Keywords: Taxation&Subsidies,Emerging Markets,Debt Markets,Tax Law,Fiscal Adjustment
    Date: 2014–07–01
  5. By: Egger, Peter; Erhardt, Katharina; Keuschnigg, Christian
    Abstract: Firms are heterogeneous in size, productivity, ownership concentration, governance, financial structure and other dimensions. This paper introduces a stylized theoretical framework to account for such differences and to explain the heterogeneous tax sensitivity of firm-level investments across firm types. We econometrically test the theoretical predictions, taking account of selection of firms into different regimes. We find important differences in the tax sensitivity of investment of small entrepreneurial and larger managerial firms in different financial regimes that are largely in line with theoretical results.
    Keywords: Corporate tax; Personal taxes; Firm heterogeneity; Access to capital; Manager-shareholder conflicts
    JEL: D22 G32 H25 L21
    Date: 2014–08
  6. By: Congressional Budget Office
    Abstract: CBO examines fair-value accounting as an alternative to the current approach for measuring the costs to the government of selected federal credit programs—specifically, those involving student loans, certain mortgage guarantees, and the Export-Import Bank's loan and loan guarantee programs. The estimated costs of those programs are higher under a fair-value approach because it more fully accounts for the cost of the risk the government takes on.
    JEL: G00
    Date: 2014–05–22

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