nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2015‒12‒12
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Tax policy in Latin America: Assessment and guidelines for a second generation of reforms By Gómez Sabaini, Juan Carlos; Morán, Dalmiro
  2. Who do you blame in local finance? An analysis of municipal financing in Italy By Massimo Bordignon; Veronica Grembi; Santino Piazza
  3. Cournot Competition and "Green" Innovation: An Inverted-U Relationship By Luca Lambertini; Joanna Poyago-Theotoky; Alessandro Tampieri
  4. How false beliefs about exchange rate systems threaten global growth and the existence of the Eurozone By White, William R.
  5. Tax Incentives and Job Creation in the Tourism Industry of Brazil By Grégoire Garsous; David Corderi; Mercedes Velasco

  1. By: Gómez Sabaini, Juan Carlos; Morán, Dalmiro (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: In recent years, the countries of Latin America have introduced a series of reforms aimed at strengthening and modernizing their tax systems. While the reforms are part of an ongoing process carried over from earlier periods, the objectives pursued place a renewed emphasis on distribution issues, in clear contrast with the spirit of the tax reforms implemented in the region in the 1980s and 1990s. This paper identifies the stylized facts that have characterized Latin American tax systems over the past two decades. Although there is a lot of heterogeneity among countries, the tax burden has increased in almost all cases, and the tax structure has, on average, become more concentrated on the value added tax and the income tax. Nevertheless, certain structural weaknesses have been maintained over time, such as the bias in favour of indirect taxation and the low weight of personal income taxes, which determines the low redistributive impact of taxation at the regional level. Moreover, the high degree of informality, the high level of tax expenditures (or concessions) and the unacceptable levels of tax evasion hinder the consolidation of tax systems based on sufficiency, equity, and efficiency. As the objectives of tax policy expand beyond the merely fiscal, as has been the case in some recent experiences, it is becoming increasingly important to establish new guidelines for tax reform in the countries of the region.
    Date: 2014–06
  2. By: Massimo Bordignon (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Veronica Grembi; Santino Piazza
    Abstract: In a political agency model, we study the effect of introducing a less transparent tax tool for the financing of local governments. We show that lower quality politicians would use more the less transparent tax tool to enhance their probability of re-election. This prediction is tested by studying a reform that in 1999 allowed Italian municipalities to partially substitute a more accountable source of tax revenue (the property tax) with a less transparent one (a surcharge on the personal income tax of residents). Using a Difference in Difference approach, we show that in line with theory, Mayors at their first term in power adopted a higher surcharge on the personal income tax and reduced the property tax rate significantly more than Mayors in their final term..
    Keywords: Fiscal federalism, Tax transparency, Agency Model, Property tax.
    JEL: H71 H77 D78
    Date: 2015–12
  3. By: Luca Lambertini (University of Bologna, Italy); Joanna Poyago-Theotoky (La Trobe University, Australia); Alessandro Tampieri (University of Luxembourg, Luxembourg)
    Abstract: We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions ("green" innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in "green" R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximise social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.
    Keywords: "Green" R&D, R&D Spillovers, Emission Taxation, Time-Consistent Emission Tax, Pre-Commited Emission Tax
    JEL: Q55 Q56 O30 L13
    Date: 2015–08
  4. By: White, William R. (OECD)
    Abstract: The current belief system that says “all will be well” if domestic price stability can be maintained is fundamentally flawed. If this can be achieved only through monetary, credit and debt expansion, the end result will be an increased risk of systemic crisis. Moreover, false beliefs about how exchange rate systems function, at both the global level and within the Eurozone, imply international “spillover” effects that increase both the likelihood and the seriousness of such crises. Gross international capital flows pose as many (perhaps more) dangers than do net flows (ie current account imbalances). And false beliefs about exchange rate regimes not only compromise crisis prevention, but they also hinder crisis management and resolution. At the global level, we still lack the instruments to do either effectively should current problems worsen. In the Eurozone, the crisis which began in 2010 has not been well managed and remains fundamentally unresolved.
    JEL: B52 E5 F42
    Date: 2015–09–01
  5. By: Grégoire Garsous; David Corderi; Mercedes Velasco
    Abstract: In recent decades, a significant number of developing countries have implemented fiscal incentives programs for the tourism industry as part of their regional development policies. The main objective of these programs is to increase local investment and employment, as tourism activities are labor intensive. Little evidence is available, however, to assess the effect of these policies on job creation. This paper analyzes a fiscal incentives program that the Brazilian federal government introduced in 2002 to develop the tourism industry in the undeveloped region of Northeast Brazil. It provides evidence that income tax credits had a significant positive effect on job creation. We find that local employment in the tourism industry was on average 34 percent higher in those municipalities that benefited from the program.
    Keywords: Tourism, Tax incentives, Taxation, Fiscal Policy, Investment, Labor markets
    Date: 2015–11

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