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on Public Economics |
| By: | Matthias Wrede (University of Marburg) |
| Abstract: | This paper analyzes the impact of fiscal equalization on asymmetric tax competition when positive agglomeration externalities are present. It shows that equalization of standardized tax revenue improves the spatial allocation of capital provided that agglomeration externalities are sufficiently strong. |
| Keywords: | Agglomeration, tax competition, fiscal equalization. |
| JEL: | R12 H71 H73 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2009/4/doc2009-5&r=pbe |
| By: | Micheletto, Luca (Department of Economics) |
| Abstract: | This paper deals with the consequences of the assumption of negatively interdependent preferences for the shape of the optimal nonlinear income tax and the effcient level of public good provision in a setting where the policy maker maximizes an inequality averse social welfare function and the agents’ market ability is private information. The analysis points out that the terms added in the tax formulas due to the presence of Veblen effects might justify a reduction in the optimal marginal tax rates faced by the different individuals. Also, the desirability of negative marginal tax rates cannot be ruled out. With respect to the issue of the optimal level of public good provision, we derive a modfied Samuelson rule and highlight the fact that the Veblen-based part of the formula might require to distort downwards the efficient level of public good provision. |
| Keywords: | optimal nonlinear income taxation; modified Samuelson rule; Veblen effects |
| JEL: | H21 H23 H41 |
| Date: | 2009–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2009_003&r=pbe |
| By: | Kazuko Miyamoto |
| Abstract: | The purpose of this paper is to propose a new approach to empirically analyze the existence of strategic interactions of taxation between state governments (horizontal) and between state and federal governments (vertical) using gasoline and cigarette taxation in the U.S. I explicitly estimate the structural parameters of consumer's utility and state governmentfs objective functions. The slopes of the reaction functions, which represent the strategic interactions of state government taxation policies, are then computed given the estimated structural parameters. Empirical results show that contrary to the existing literature, there is very little horizontal tax interaction in both the gasoline and cigarette cases. On the other hand, there is a moderate positive vertical tax interaction for both gasoline and cigarette taxes and the scale is larger in the case of cigarette taxes. Furthermore, the value and sign of the slopes of the reaction function are very different across states. This suggests a new policy implication: as state governments respond differently to federal government fiscal policy, uniform fiscal policy is not appropriate for welfare maximization of the nation. |
| Keywords: | tax interaction, cross border shopping |
| JEL: | H11 H21 H71 H73 H77 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-053&r=pbe |
| By: | Konrad, Kai A. (WZB - Social Science Research Center Berlin); Qari, Salmai (WZB - Social Science Research Center Berlin) |
| Abstract: | We study the effects of patriotism on tax compliance. In particular, we assume that individuals feel a (random draw of) warm glow from honestly paying their taxes. A higher expected warm glow reduces the government's optimal audit probability and yields higher tax compliance. Second, individuals with higher warm glow are less likely to evade taxes. This prediction is confirmed empirically by a multivariate analysis on the individual level while controlling for several other potentially confounding factors. The findings survive a variety of robustness checks, including an instrumental variables estimation to tackle the possible endogeneity of patriotism. On the aggregate level, we provide evidence for a negative correlation between average patriotic warm glow and the size of the shadow economy across several countries. |
| Keywords: | patriotism, tax evasion, warm glow |
| JEL: | H26 K42 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4121&r=pbe |
| By: | Qari, Salmai (WZB - Social Science Research Center Berlin); Konrad, Kai A. (WZB - Social Science Research Center Berlin); Geys, Benny (WZB - Social Science Research Center Berlin) |
| Abstract: | For patriotic citizens, living in their native country is intrinsically preferable compared to living in the diaspora. In this paper, we analyze the implications of such a patriotic lock-in in a world with international migration and redistributive taxation. In a formal model of redistribution with international migration and fiscal competition we derive the main hypothesis: that countries with a more patriotic population should have higher redistributive taxes. Using ISSP survey data and combining them with OECD taxation data, we find robust evidence suggesting that a) higher patriotism is associated with higher tax burdens, and b) this relation is stronger for the upper-middle range of the income distribution. |
| Keywords: | patriotism, international mobility, taxation, redistribution, fiscal competition |
| JEL: | H20 H73 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4120&r=pbe |
| By: | Andreas Glöckner (Max Planck Institute for Research on Collective Goods); Bernd Irlenbusch (Max Planck Institute for Research on Collective Goods); Sebastian Kube (Max Planck Institute for Research on Collective Goods); Andreas Nicklisch (Max Planck Institute for Research on Collective Goods); Hans-Theo Normann (Max Planck Institute for Research on Collective Goods) |
| Abstract: | We analyse two team settings in which one member in a team has stronger incentives to contribute than the others. If contributions constitute a sacrifice for the strong player, the other team members are more inclined to cooperate than if contributions are strictly dominant for the strong player. |
| Keywords: | Experiments, Leadership, Reciprocity, Voluntary Contribution Mechanism |
| JEL: | C91 C92 H40 H41 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2009_08&r=pbe |
| By: | Andersen, Steffen (Department of Economics, Copenhagen Business School); Bulte, Erwin (Department of Economics, Copenhagen Business School); Gneezy, Uri (Department of Economics, Copenhagen Business School); List, John A. (Department of Economics, Copenhagen Business School) |
| Abstract: | na |
| Keywords: | na |
| JEL: | G10 |
| Date: | 2009–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2008_001&r=pbe |
| By: | Reuben, Ernesto (Northwestern University); Tyran, Jean-Robert (University of Copenhagen) |
| Abstract: | We test if cooperation is promoted by rank-order competition between groups in which all groups can be ranked first, i.e. when everyone can be a winner. This type of rank-order competition has the advantage that it can eliminate the negative externality a group's performance imposes on other groups. However, it has the disadvantage that incentives to outperform others are absent if groups perform at the same level and it therefore does not eliminate low-cooperation equilibria. We find that all-can-win competition produces a universal increase in cooperation and benefits a majority of individuals if incentives to compete are strong. |
| Keywords: | intergroup competition, cooperation, public goods, experiment |
| JEL: | H41 M52 C92 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4112&r=pbe |
| By: | Selin, Håkan (Department of Economics) |
| Abstract: | Sweden reached the 2007 OECD average level of female labor force participation already in 1974. Before, but not after, 1971 the average tax rate facing the housewife was a function of the income of her husband. By exploiting a rich register based data source I utilize the exogenous variation provided by the individual tax reform to analyze the evolution of female employment in Sweden in the beginning of the 1970’s. Simulations suggest that employment among married women would have been 10 percentage points lower in 1975 if the 1969 statutory income tax system still had been in place in 1975. |
| Keywords: | Female labor supply; income tax reforms |
| JEL: | H24 J21 |
| Date: | 2009–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2009_004&r=pbe |
| By: | Banful, Afua Branoah |
| Abstract: | "Analyses of how coveted central-government resources in Africa are shared have shown widespread patronage, ethnic cronyism, and pork-barrel politics. While some governments have attempted to rectify the situation by establishing revenue-sharing formulas, a key unanswered question is whether such institutions are able to achieve this goal. This paper presents an empirical investigation of a pioneering formula-based system of resource allocation from the central government to local governments in Ghana—the District Assemblies Common Fund (DACF). The evidence is consistent with governments being able to politically manipulate resource allocation within the confines of the formula-based system. Nevertheless, this does not suggest that the DACF completely fails to limit political influence. It indicates that other guiding structures of a formula-based system—in particular, how and when the formula can be altered—are important determinants of how well a program such as the DACF is able to resist political pressures." from authors' abstract |
| Keywords: | Resource sharing, Grants in aid, Intergovernmental relations, Development strategies, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:855&r=pbe |
| By: | Kevin J. Mumford |
| Abstract: | Families with children receive preferential treatment in the U.S. federal income tax. Over the past 15 years, the real value of child tax benefits approximately doubled reaching nearly $1,900 per child in 2006. This paper examines the efficiency cost of providing child tax benefits. A representative agent model is used to show how the efficiency cost of providing child tax benefits depends on labor supply and fertility elasticities. The model reveals that cross-price substitution effect for labor supply and children is of primary importance in calculating the efficiency cost. However, there are no estimates of this parameter in the literature. This paper uses data from the National Longitudinal Survey of Youth (NLSY) to estimate this parameter. The estimated cross-price substitution effect implies that children and time spent outside of employment are complements. This implies that the full cost of providing child tax benefits is larger than the reported tax expenditure. |
| Keywords: | fertility, income tax, child tax benefits, female labor supply |
| JEL: | H24 H21 J13 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1220&r=pbe |
| By: | Scharpf, Fritz W. |
| Keywords: | legitimacy; multilevel governance; polity building; federalism; national autonomy; intergovernmentalism; liberalization; participation; implementation; European Court of Justice; European Court of Justice |
| Date: | 2009–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:erp:mpifgx:p0084&r=pbe |