nep-pbe New Economics Papers
on Public Economics
Issue of 2011‒07‒13
four papers chosen by
Keunjae Lee
Pusan National University

  1. Top tax system: a common taxation system for all nations By Varma, Vijaya Krushna Varma
  2. What Has Happened to Quebecers’ Marginal Effective Tax Rates? By Alexandre Laurin; Finn Poschmann
  3. Taxation trends in the European Union: 2011 edition By European Commission
  4. Tax Treatment of ETS Allowances: Options for Improving Transparency and Efficiency By Copenhagen Economics

  1. By: Varma, Vijaya Krushna Varma
    Abstract: I am suggesting new methods, and innovative and alternative policies in the areas of optimal taxation, tax collection, money supply and banking financial system to help remove corruption, tax evasion, economic recession, black money, fake currency and societal inequalities. In my opinion, the proposed TOP Tax system may usher in good governance, 100% tax compliance and corruption free environment. It suggests a single tax called “TOP Tax” (Transfer Or Purchase Tax) for both Centre and States combined in place of present multiple Indirect taxes with different slab rates on different goods/commodities/services and multiple Direct taxes with different slab rates, relieving people from the cobweb of ambiguous and complex tax structures, plethora of tax laws, mandatory and cumbersome accounting, auditing, tax returns and consequent quagmire of all tax related cases. Therefore the numerous tax exemptions and exclusions, which have invariably narrowed the tax base, will no longer be needed. This new TOP Tax system with only single tax (TOP Tax) envisages 20 to 30 % more revenues than presently accruing from multiple taxes collected by different departments/agencies. The availability of resources and capital flows, needed for economic recovery, is the self-priming character of the “TOP Tax system” without Government’s fiscal stimulus packages. This new taxation shall be operated at minimum operating cost with limited paper currency, thereby totally eliminating fake currency, black money, tax evasion, corruption and extortions. Under this new taxation system the tax net will be the broadest with absolutely no tax evasion, making it possible for the lowest tax slab rate and cheapest prices of commodities/services. The redistribution of revenues from Government to people in the form of welfare schemes, subsidies and various relief funds will become easier without leakages, bribes and misappropriation. Although this new taxation system is a basic model suggested mainly for India, the basic concept of taxation and tax collection methods can be adopted and implemented by all the developed and developing countries alike to benefit 6.5 billion people of the world in all spheres of their lives in one form or other.
    Keywords: Single tax system; A new taxation system; Redefining the role of banking sector; optimal taxation; tax collection; money supply; lowest interest rates; Economy that will run on limited paper currency and dematerialised money
    JEL: E62 E43 E51 H24 H2 H71 H63 H21 H25 E52 E40 H61 H26 G21
    Date: 2009–05–31
  2. By: Alexandre Laurin (C.D. Howe Institute); Finn Poschmann (C.D. Howe Institute)
    Abstract: More than a decade after Quebec and the federal government implemented significant personal income tax rate reductions, what has happened to Quebecers’ take-home pay? This paper answers the question by looking at marginal effective tax rates (METRs) on personal income, which measure the impact of federal and provincial income taxes combined with the impact of reductions and clawbacks of income-tested tax credits and benefits. Income-tested credits and benefits mostly target financial support to low-to-middle income families with children and to low-income seniors. However, clawbacks and rate reductions apply to those credits and benefits as incomes rise above set thresholds, raising METRs for those income groups and family types. Overall, METRs are lower than a decade ago, but for many low-to-middle income Quebec families with children, they are higher. The province’s residents generally face the highest tax rates in the country, with an average METR in 2011 exceeding the national average by four percentage points.
    Keywords: Fiscal and Tax Competitiveness, Province of Quebec, marginal effective tax rates (METRs)
    JEL: E52 E61 E64
    Date: 2011–05
  3. By: European Commission
    Abstract: This report contains a detailed statistical and economic analysis of the tax systems of the Member States of the European Union, plus Iceland and Norway, which are Members of the European Economic Area. The data are presented within a unified statistical framework (the ESA95 harmonised system of national and regional accounts), which makes it possible to assess the heterogeneous national tax systems on a fully comparable basis. The standard classifications of tax revenues (by major type of tax or by level of government) presented in most international tax revenue statistics are hard to interpret in economic terms. This publication stands out for offering a breakdown of tax revenues by economic function (i.e. according to whether they are raised on consumption, labour or capital). This classification is based on disaggregated tax data and on a breakdown of the revenue from the personal income tax. Besides revenue data, the report also contains indicators of the average effective tax rate falling on consumption, labour and capital, as well as data on environmental taxation and on the top rates for the personal and corporate income tax. Country chapters give an overview of the tax system in each of the 29 countries covered, the revenue trends and the main recent policy changes. Detailed tables allow comparison between the individual countries and European averages. Data cover the 1995-2009 period and are presented both as a percentage of GDP and as a percentage of total taxation. This year's edition of the report for the first time includes data on average effective tax ratios (EATRs) for non-financial corporations. In addition, the report also contains a detailed new analysis of the impact of the economic and financial crisis on the tax systems of all EU Member States.
    Keywords: European Union, taxation
    JEL: H23 H24 H25 H27 H71
    Date: 2011–06
  4. By: Copenhagen Economics
    Abstract: The study examines current national practices with respect to emissions allowances in the EU and the countries with similar cap-and-trade systems. It analyses potential distortions resulting from national practices and identifies the best solutions. It deals with issues such as the tax treatment of allowances allocated for free, that of allowances originated as Clean Development Mechanism or Joint Implementation, and the tax treatment of penalties for non-compliance. It also examines the feasibility of various policy solutions at EU level.
    Keywords: European Union, taxation, environmental tax, ETS
    JEL: H24 H25
    Date: 2010–11

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