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on Public Economics |
| By: | Lehmann, Etienne (CREST-INSEE); Marical, François (INSEE); Rioux, Laurence (CREST-INSEE) |
| Abstract: | We estimate the responses of gross labor earnings with respect to marginal and average net-of-tax rates in France over the period 2003-2006. We exploit a series of reforms to the income-tax and the payroll-tax schedules that affect individuals who earn less than twice the minimum wage. Our estimate for the elasticity of gross labor earnings with respect to the marginal net-of-income-tax rate is around 0.2, while we find no response to the marginal net-of-payroll-tax rate. The elasticity with respect to the average net-of-tax rates is not significant for the income-tax schedule, while it is close to -1 for the payroll-tax schedule. A plausible explanation is the existence of significant labor supply responses to the income-tax schedule, combined with a short-term rigidity of the hourly taxable wage (i.e. the gross wage minus payroll taxes), casting doubts about public finance analysis that assumes perfect competition on the labor market. Finally, the effect of the net-of-income-tax rate seems to be driven by labor supply participation decisions, in particular those of females. |
| Keywords: | labor earnings, payroll tax, income tax |
| JEL: | H24 H31 J22 J38 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6108&r=pbe |
| By: | Adam, Antonis; Kammas, Pantelis |
| Abstract: | Using a simple model of income redistribution, we show that the government may use tax evasion as a way to redistribute income from the non- evaders to evaders. This will result then to a negative association between income inequality and per capita transfers and inefficiently high taxes. |
| Keywords: | redistribution; inequality; tax evasion |
| JEL: | H10 H23 H26 |
| Date: | 2011–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34803&r=pbe |
| By: | Danuše Nerudová (Department of Accounting and Taxes, FBE MENDELU in Brno) |
| Abstract: | The recent financial crises has revealed the need to improve and ensure the stability of the financial sector to reduce negative externalities, to ensure fair and substantial contribution of the financial sector to the public finances and the need to consolidate public finance. The aim of the paper is to discuss the possibility of the financial sector taxation and to suggest the possible candidate suitable for the implementation on the EU level. Financial transaction tax represents the tool suitable mainly on global level, for only in that case enables to generate sufficient financial resources. From EU point of view is considered as less suitable, for it bears the risk of reallocation. Therefore the introduction of financial activities tax on EU level is considered as a better solution for the financial sector taxation in the EU, for financial sector is exempted from value added tax. However, the approval of directive in the area of taxation requires unanimity of all EU member states, which means that final solution will be also political question. |
| Keywords: | financial transaction tax, financial activities tax, tax base, crises, financial sector |
| JEL: | H25 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:16_2011&r=pbe |
| By: | Luca Agnello (Banque de France); Ricardo M. Sousa (Universidade do Minho - NIPE) |
| Abstract: | In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1970 to 2010, we find that income inequality significantly rises both during periods of fiscal consolidation and in the aftermath of such adjustments. In addition, fiscal authority that is driven by spending cuts seems to be more detrimental for income distribution than in the case of tax hikes. Considering the linkages between banking crises and fiscal consolidation, we show that the impact on the income gap is amplified when fiscal adjustments take place after the resolution of such financial turmoils. Our results also provide support for the Kuznets relationship and corroborate the idea that trade can lead to a more unequal distribution of income. |
| Keywords: | Fiscal consolidation, income inequality, Kuznets curve |
| JEL: | E62 E64 D63 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:34/2011&r=pbe |
| By: | Paula Faria (Faculdade de Economia, Universidade do Porto); Francisco Vitorino da Silva Martins (Faculdade de Economia, Universidade do Porto); Elísio Fernando Moreira Brandão (Faculdade de Economia, Universidade do Porto) |
| Abstract: | Setting targets to increase the levels of R&D, a component that is present in the political and economic agendas of the European Member States with the promotion of active tax policies, suggests that it is possible for R&D to cause an impact on economic growth. This research work aims at understanding the influence of the evolution of R&D expenditures, as well as the influence of tax incentives on economic growth. For that, a panel data of 15 European countries, during the period between 1995 and 2008, was used. The econometric study confirms the foreseen importance, both in this study and in the literature, of the countries’ R&D efforts and their impact on economic growth. The positive effect of tax incentives on economic growth, combined with R&D levels, is highlighted and demonstrated, thus confirming a strategic orientation towards tax policies followed by the national institutions. |
| Keywords: | R&D, tax incentives, economic growth, econometric analysis in panel data |
| JEL: | C23 H20 H3 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:442&r=pbe |
| By: | Manzo Marco; Monteduro Maria Teresa |
| JEL: | E32 E62 H25 H32 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0084&r=pbe |
| By: | Anna Bottaso (Department of Economics and Quantitative Methods, University of Genova); Carolina Castagnetti (Department of Economics and Quantitative Methods, University of Pavia); Maurizio Conti (Department of Economics and Quantitative Methods, University of Genova) |
| Abstract: | In this paper we add to the debate on the public capital - productivity link by exploiting very recent developments in the panel time series literature that take into account cross sectional correlation in non-stationary panels. In particular we evaluate the productive effect of public capital by estimating various production functions for a panel of 21 OECD countries over the period 1975-2002. We find strong evidence of common factors that drive the cointegration relationship among variables; moreover, our results suggest a public capital elasticity of GDP in the range 0.05-0.15, depending on model specification. Results are robust to the evidence of spillovers from public capital investments in other countries and to controlling for other productivity determinants like human capital, the stock of patents and R&D capital. |
| Keywords: | Public capital; Productivity; Panel Cointegration; Cross-section Dependence. |
| JEL: | C33 C15 H54 O47 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:277&r=pbe |
| By: | P. Bönisch; Peter Haug; A. Illy; L. Schreier |
| Abstract: | Similarly to western Germany in the 1960s and 1970s, the eastern part of Germany has experienced a still ongoing process of numerous amalgamations among counties, towns and municipalities since the mid-1990s. The evidence in the economic literature is mixed with regard to the claimed expenditure reductions and efficiency gains from municipal mergers. We therefore analyze the global efficiency of the municipalities in Saxony-Anhalt, for the first time in this context, using a double-bootstrap procedure combining DEA and truncated regression. This allows including environmental variables to control for exogenous determinants of municipal efficiency. Our focus thereby is on institutional and fiscal variables. Moreover, the scale efficiency is estimated to find out whether large units are necessary to benefit from scale economies. In contrast to previous studies, we chose the aggregate budget of municipal associations (“Verwaltungsgemeinschaften”) as the object of our analysis since important competences of the member municipalities are settled on a joint administrative level. Furthermore, we use a data set that has been carefully adjusted for bookkeeping items and transfers within the communal level. On the “eve” of a mayor municipal reform the majority of the municipalities were found to have an approximately scale-efficient size and centralized organizational forms (“Einheitsgemeinden”) showed no efficiency advantage over municipal associations. |
| Keywords: | efficiency, local government, DEA, bootstrap, demographic change, local institutions |
| JEL: | H11 H72 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:18-11&r=pbe |