nep-pbe New Economics Papers
on Public Economics
Issue of 2018‒11‒19
24 papers chosen by
Thomas Andrén

  1. Optimal Spatial Taxation: Are Big Cities too Small? By Jan Eeckhout; Nezih Guner
  2. The sinful side of taxation: is it possible to satisfy the government hunger for revenues while promoting economic growth? By José Alves
  3. The impact of tax structure on investment: an empirical assessment for OECD countries By José Alves
  4. The taxation of savings: the Italian system and international comparison By Nicola Branzoli; Giovanna Messina; Elena Pisano; Giacomo Ricotti; Ernesto Zangari
  5. The Impact of Corporate Taxes on Firm Innovation: Evidence from the Corporate Tax Collection Reform in China By Jing Cai; Yuyu Chen; Xuan Wang
  6. The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018 By Johansson, Dan; Stenkula, Mikael; Wykman, Niklas
  7. Optimal Taxes on Capital in the OLG Model with Uninsurable Idiosyncratic Income Risk By Dirk Krueger; Alexander Ludwig
  8. Social networks and tax avoidance: Evidence from a well-defined Norwegian tax shelter By Alstadsaeter, Annette; Kopczuk, Wojciech; Telle, Kjetil
  9. Relocation of the Rich: Migration in Response to Top Tax Rate Changes from Spanish Reforms By David R. Agrawal; Dirk Foremny
  10. Income protection of atypical workers in the event of unemployment in Europe By Jara Tamayo, Holguer Xavier; Tumino, Alberto
  11. Optimal Income Taxation with Spillovers from Employer Learning By Ashley Cooper Craig
  12. Size and distributional pattern of pension-related tax expenditures in European countries By Barrios, Salvador; Coda Moscarola, Flavia; Figari, Francesco; Gandullia, Luca
  13. The Intergenerational Causal Effect of Tax Evasion: Evidence from the Commuter Tax Allowance in Austria By Frimmel, Wolfgang; Halla, Martin; Paetzold, Joerg
  14. Tax Equivalences and their Implications By Alan J. Auerbach
  15. Do Household Finances Constrain Unconventional Fiscal Policy? By Scott R. Baker; Lorenz Kueng; Leslie McGranahan; Brian T. Melzer
  16. Unhappy Returns: A Preliminary Estimate of Taxpayers Responsiveness to the 2016 Top Tax Rate Hike By Alexandre Laurin
  17. Europe Through the Crisis: Discretionary Policy Changes and Automatic Stabilisers By Paulus, Alari; Tasseva, Iva Valentinova
  18. Implementing corporate tax cuts at the expense of neutrality? A legal and optimisation analysis of fundamental reform in practice By Kayis-Kumar, Ann
  19. The Price and Welfare Effects of The Value-Added Tax: Evidence from Mexico By Rodrigo Mariscal; Alejandro M. Werner
  20. Effective Tax Levels Using the Devereux-Griffith Methodology, Update 2017 By ZEW
  21. A case study on Germany's aviation tax using the synthetic control approach By Daniel Borebly
  22. Optimal Taxes on Capital in the OLG Model with Uninsurable Idiosyncratic Income Risk By Krueger, Dirk; Ludwig, Alexander
  23. The equivalence of two tax processes By Dalal Al Ghanim; Ronnie Loeffen; Alex Watson
  24. Property Tax and Land Use: Evidence from the 1990s reforms in Japan By MIYAZAKI Tomomi; SATO Motohiro

  1. By: Jan Eeckhout (UCL and Barcelona GSE-UPF-ICREA); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: We analyze the role of optimal income taxation across different local labor markets. Should labor in large cities be taxed differently than in small cities? We find that a planner who needs to raise a given level of revenue and is constrained by free mobility of labor across cities does not choose equal taxes for cities of different sizes. The optimal tax schedule is location specific and tax differences between large and small cities depends on the level of government spending, the concentration of housing wealth and the strength of agglomeration economies. Our estimates for the US imply higher optimal marginal rates in big cities than in small cities. Under the current Federal Income tax code with progressive taxes, marginal rates are already higher in big cities which have higher wages, but the optimal difference we estimate is lower than what is currently observed. Simulating the US economy under the optimal tax schedule, there are large effects on population mobility: the fraction of population in the 5 largest cities grows by 7.6% with 3.4% of the country-wide population moving to bigger cities. The welfare gains however are smaller. This is due to the fact that much of the output gains are spent on the increased costs of housing construction in bigger cities. Aggregate goods consumption goes up by 1.51% while aggregate housing consumption goes down by 1.70%.
    Keywords: Misallocation, taxation, population mobility, city size, general equilibrium.
    JEL: H21 J61 R12 R13
    Date: 2017–01
  2. By: José Alves
    Abstract: In this study we try to evaluate both linear and non-linear relationships between each tax item and real per capita growth. Our analysis, conducted for all the OECD countries between 1980 and 2015 and by resorting to panel data techniques in a short and long-term basis, evidences tax items threshold values for all tax components (except for taxes on individual income). In particular, for long-run economic performance, we obtain optimal threshold values for social security contributions between 7.0% and 12.43%. Lastly, our results provide some conclusions, highlighting the raise of some taxes, in GDP terms, without harming economic growth evolution.
    Keywords: Economic Growth; Tax systems; Fiscal Policy; Optimal taxation
    JEL: E62 H21 O47
    Date: 2018–11
  3. By: José Alves
    Abstract: In the present empirical analysis we try to assess the impact of taxation on investment growth. In particular, and by using gross fixed capital formation as a proxy for investment, we intend to evaluate the impact of the taxation structure in investment dynamics, in a short and a long-run perspectives. This empirical exercise was conducted for all OECD countries, during the 1980-2015 period. Through panel data econometric techniques, we find optimal tax-investment threshold values, specially higher for short-term than for long-term evolution. Also, we find optimal income taxation rounding 9%, in percentage of GDP, an average optimal value 12.7% for consumption taxes to promote annual investment growth.
    Keywords: Investment Growth; Tax systems; Fiscal Policy; Optimal taxation
    JEL: E62 H21 O47
    Date: 2018–11
  4. By: Nicola Branzoli (Bank of Italy); Giovanna Messina (Bank of Italy); Elena Pisano (Bank of Italy); Giacomo Ricotti (Bank of Italy); Ernesto Zangari (Bank of Italy)
    Abstract: After a brief review of the economic literature, the paper offers a comparative analysis of the main features of capital income taxation in Italy, the EU and the US. The paper also analyses the recent evolution of capital taxation and portfolio allocation in Italy. The findings point to high heterogeneity in the choice of the type of tax system, taxation level and forms of preferential taxation, suggesting no convergence towards a single model of taxation among countries. However, a common feature of most systems is that capital income is taxed more lightly than labour income. The heterogeneity in the tax treatment of households’ savings is likely to persist in the future; recent developments at international level concerning the transparency of taxation are expected to increase governments’ degrees of freedom in choosing their preferred tax system. Empirical evidence for Italy suggests that the tax burden on financial assets has increased in recent years but the evolution of financial assets over time is not particularly sensitive to tax changes.
    Keywords: capital income, taxation, savings
    JEL: E21 H24 K34
    Date: 2018–10
  5. By: Jing Cai; Yuyu Chen; Xuan Wang
    Abstract: This paper exploits a tax reform on manufacturing firms in China to study the impact of taxes on firm innovation. The reform switched the corporate income tax collection from the local to the state tax bureau and reduced the effective tax rate by 10%. The reform only applied to firms established after January 2002, allowing us to use regression discontinuity design as the identification strategy. The results show that lower taxes improved both quantity and quality of firm innovation. Moreover, the reform has a bigger impact on firms that are financially constrained and firms that engage more in tax evasion.
    JEL: H25 O31
    Date: 2018–10
  6. By: Johansson, Dan (Örebro University School of Business); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)); Wykman, Niklas (Örebro University School of Business)
    Abstract: The tax system has at times favoured firm control through private foundations, which has been argued to inhibit high-impact entrepreneurship and economic growth. However, research has been hampered due to a lack of systematic historical tax data. The purpose of this study is threefold. First, we describe the evolution of tax rules for private foundations in Sweden between 1862 and 2018. Second, we calculate the marginal effective tax rate on capital income. Third, we examine the incentives to use private foundations as a means for corporate control by comparing the taxation of private foundations and of high-impact entrepreneurs. Tax incentives help explain why economically significant private foundations were founded between World War I and the 1960s.​
    Keywords: Family firms; Foundations; High-impact entrepreneurship; Owner; Taxation
    JEL: D31 H32 K34 L26 N23 O43 P12 P14
    Date: 2018–11–06
  7. By: Dirk Krueger (Department of Economics, University of Pennsylvania); Alexander Ludwig (Department of Economics, Goethe-Universität Frankfurt)
    Abstract: We characterize the optimal linear tax on capital in an Overlapping Generations model with two period lived households facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of private precautionary saving. For logarithmic utility our full analytical solution of the Ramsey problem shows that the optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income risk. Its sign depends on the extent of risk and on the Pareto weight of future generations. If the Ramsey tax rate that maximizes steady state utility is positive, then implementing this tax rate permanently generates a Pareto-improving transition even if the initial equilibrium is dynamically efficient. We generalize our results to Epstein-Zin-Weil utility and show that the optimal steady state saving rate is increasing in income risk if and only if the intertemporal elasticity of substitution is smaller than 1.
    Keywords: Idiosyncratic Risk, Taxation of Capital, Overlapping Generations, Precautionary Saving, Pecuniary Externality
    JEL: H21 H31 E21
    Date: 2018–02–09
  8. By: Alstadsaeter, Annette; Kopczuk, Wojciech; Telle, Kjetil
    Abstract: In 2005, over 8% of Norwegian shareholders transferred their shares to new (legal) tax shelters intended to defer taxation of capital gains and dividends that would otherwise be taxable in the aftermath of 2006 reform. Using detailed administrative data we identify family networks and describe how take up of tax avoidance progresses within a network. A feature of the reform was that the ability to set up a tax shelter changed discontinuously with individual shareholding of a firm and we use this fact to estimate the causal effect of availability of tax avoidance for a taxpayer on tax avoidance by others in the network. We find that take up in a social network increases the likelihood that others will take up. This suggests that taxpayers affect each other's decisions about tax avoidance, highlighting the importance of accounting for social interactions in understanding enforcement and tax avoidance behavior, and providing a concrete example of "optimization frictions" in the context of behavioral responses to taxation.
    JEL: D22 H25 H26 H32
    Date: 2018–10
  9. By: David R. Agrawal (University of Kentucky, Department of Economics and Martin School of Public Policy & Administration); Dirk Foremny (IEB, Department of Public Economy, Political Economy and Spanish Economy, Universitat de Barcelona, Facultat d'Economia i Empresa)
    Abstract: recent Spanish tax reform granted regions the authority to set income tax rates, resulting in substantial tax di erentials. We use individual-level information from Social Security records over a period of one decade. Conditional on moving, taxes have a significant e ect on location choice. A one percent increase in the net of tax rate for a region relative to others increases the probability of moving to that region by 1.7 percentage points. Focusing on the stock of top-taxpayers, we estimate an elasticity of the number of top taxpayers with respect to net-of-tax rates of 0.85. Using this elasticity, a theoretical model implies that the mechanical increase in tax revenue due to higher tax rates is larger than the loss in tax revenue from the out- ow of migration.
    Keywords: Migration, Taxes, Mobility, Rich, Fiscal Decentralization
    JEL: H24 H31 H73 J61 R23
    Date: 2018–11
  10. By: Jara Tamayo, Holguer Xavier; Tumino, Alberto
    Abstract: This paper evaluates the degree of income protection the tax-benefit system provides to atypical workers in the event of unemployment, comparing them to standard employees. Our approach relies on EUROMOD, the EU tax-benefit microsimulation model, to simulate transitions from employment to unemployment for the entire workforce and to compare household financial circumstances before and after the transition. Our results show that coverage rates of unemployment insurance are low among atypical workers. These workers are also significantly more exposed to the risk of poverty than standard employees, both while in work and in the event of unemployment. Our analysis also shows that low-work intensity employees are characterised by higher net replacement rates than other groups. However, this is due to the major role played by the market incomes of other household members. Finally, we show that in countries where self-employed workers are not eligible for unemployment insurance benefits, extending the eligibility to this group of workers would increase their replacement rates significantly and make them less likely to fall into poverty in the event of unemployment.Â
    Date: 2018–10–29
  11. By: Ashley Cooper Craig
    Abstract: I study optimal income taxation when human capital investment is imperfectly observable by employers. In my model, Bayesian employer inference about worker productivity drives a wedge between the private and social returns to human capital investment by compressing the wage distribution. The resulting positive externality from worker investment, all else being equal, calls for lower marginal tax rates. To quantify the significance of this externality for optimal taxation, I calibrate my model to match empirical moments from the United States. To inform my calibration, I provide new evidence on how the speed of employer learning about new labor market entrants varies over the worker productivity distribution. Taking into account the spillover from human capital investment introduced by employer inference reduces optimal marginal tax rates by up to 13 percentage points and produces a welfare gain equivalent to raising every worker's consumption by one percent.
    JEL: D62 D82 H2 I2 J24
    Date: 2018–11–09
  12. By: Barrios, Salvador; Coda Moscarola, Flavia; Figari, Francesco; Gandullia, Luca
    Abstract: Policy discussions on pension systems generally focus on their sustainability and design, including retirement age, income reference and contributory period, with relatively little attention devoted to the tax treatment of pension contributions and pension benefits. However, tax expenditures—defined as deviations from an agreed benchmark tax system— are widely used in EU Member States, and little is known about their fiscal and distributional impact. This paper quantifies the fiscal and distributional impact of tax expenditures related to public and private contributory pension schemes, affecting both contributions and pension benefits, in 28 European countries using EUROMOD, the EU-wide microsimulation model. We find that pension-related tax expenditures can have a sizeable impact on revenue and strong effects on inequality and poverty. Tax expenditures tend to be progressive on two levels: first, among pensioners, by favoring those with lower incomes, mainly as a result of the preferential treatment given to pension incomes; and, second, among people of working age, through a partial or no deduction of pension contributions, draining resources from those at the top of the income distribution. Moreover, embracing a lifetime perspective, tax expenditures tend to redistribute resources in favor of women and low educated individuals.Â
    Date: 2018–10–26
  13. By: Frimmel, Wolfgang (JKU Linz); Halla, Martin (JKU Linz); Paetzold, Joerg (University of Salzburg)
    Abstract: Does tax evasion run in the family? To answer this question, we study the case of the commuter tax allowance in Austria. This allowance is designed as a step function of the distance between the residence and the workplace, creating sharp discontinuities at each bracket threshold. It turns out that the distance to the next higher bracket is a strong determinant of compliance. The match of different administrative data sources allows us to observe actual compliance behavior with little error at the individual level across two generations. To identify the intergenerational causal effect in tax evasion behavior, we use the paternal distance to next higher bracket as an instrumental variable for paternal compliance. We find that paternal non-compliance increases children’s non-compliance by about 23 percent.
    Keywords: Tax evasion; tax morale; intergenerational correlation; intergenerational causal effect
    JEL: A13 D14 H24 H26 J62
    Date: 2017–01–19
  14. By: Alan J. Auerbach
    Abstract: In economic analyses of the effects of tax policies, one commonly encounters discussions of the equivalence of apparently different policies, where equivalence is defined as the policies having the same impact on fundamental economic outcomes. These related tax policies may differ in many respects, which give rise to conditions under which the equivalences may break down. This paper draws out the key issues that relate to tax equivalences, using several illustrations from important instances of such equivalences that span different areas of taxation, with many of these illustrations relating to the taxation of capital income. Recognition of equivalences and the ways in which they may fail to hold is important both for positive analysis (e.g., the political reasons for choosing one approach over another) and for normative analysis (to determine which approach may be a more effective way of implementing a policy).
    JEL: H20 H30
    Date: 2018–10
  15. By: Scott R. Baker; Lorenz Kueng; Leslie McGranahan; Brian T. Melzer
    Abstract: When the zero lower bound on nominal interest rate binds, monetary policy makers may lack traditional tools to stimulate aggregate demand. We investigate whether "unconventional" fiscal policy, in the form of pre-announced consumption tax changes, has the potential to meaningfully shift durables purchases intertemporally and how it is affected by consumer credit. In particular, we test whether car sales react in anticipation of future sales tax changes, leveraging 57 pre-announced changes in state sales tax rates from 1999-2017. We find evidence for substantial tax elasticities, with car sales rising by over 8% in the month before a 1% increase in the sales tax rate. Responses are heterogeneous across households and sensitive to supply of credit. Consumers with high credit risk scores are most able to pull purchases forward. At the same time, other effects such as customer composition and attention lead to an even larger tax elasticity during recessions, despite these credit frictions. We discuss policy implications and the likely magnitudes of tax changes necessary for any substantive long-term responses.
    JEL: D12 E21 G01 G11 H2 H31
    Date: 2018–11
  16. By: Alexandre Laurin (C.D. Howe Institute)
    Keywords: Fiscal and Tax Policy; Incentives to Save;Incentives to Work;Personal Income Taxes
    JEL: H24 H31 J22
    Date: 2018–09
  17. By: Paulus, Alari; Tasseva, Iva Valentinova
    Abstract: Tax-benefit policies affect household incomes through two main channels: discretionary policy changes and automatic stabilisers. Although a large body of literature has studied the impact of tax-benefit policy changes on incomes, little is known about the link between automatic stabilisers and the income distribution. We contribute to the literature by studying in detail the contribution of automatic stabilisers and discretionary policy changes to income changes in the EU countries between 2007 and 2014. Our results show that, discretionary policy changes and the automatic stabilisation response of policies more often worked to reduce inequality of net incomes, and so helped offset the inequality-increasing impact of a growing disparity in gross (pre-tax) market incomes. Inequality reduction was achieved mainly through policy changes to benefits and benefits acting as automatic stabilisers. On the other hand, policy changes to and the automatic stabilisation response of taxes and social insurance contributions raised inequality in some countries and lowered it in others.Â
    Date: 2018–10–27
  18. By: Kayis-Kumar, Ann
    Abstract: Governments and policy-makers are increasingly faced with the trade-off of protecting their tax revenue bases while maintaining their international competitiveness. This is exemplified by the international trend of jurisdictions reducing their headline corporate tax rates, which is often justified on the basis that these cuts will lead to improved efficiency and integrity outcomes. This article explores whether it is more efficient to implement corporate tax cuts or an alternative reform such as an economic rent tax which may better achieve the tax policy goals of efficiency and integrity. In doing so, this article bridges the gap between applied legal research, economic theory and practical optimisation modelling. Specifically, this research presents a simulation analysis of the behavioural responses of a tax-minimising multinational enterprise to both existing and proposed tax regimes and compares efficiency and integrity outcomes upon implementing corporate tax cuts. This is complemented by a legal comparative analysis featuring case studies of an economic rent tax; namely, the Allowance for Corporate Equity (ACE) as introduced in Belgium and Italy. These case studies will focus on the political hurdles to implementing and sustaining these reforms, which will highlight key lessons learnt from the implementation of the ACE in practice.
    Keywords: Tax neutrality, Corporate tax reform, Allowance for Corporate Equity
    JEL: C61 H2 K34
    Date: 2018–09
  19. By: Rodrigo Mariscal; Alejandro M. Werner
    Abstract: In this paper we analyze the incidence of the VAT and its effects on the income distribution. To identify these effects, we rely on two tax reforms undertaken in Mexico that increased the VAT rate for a group of cities and left the rest unaffected. We compare the inflation rate of the affected cities with the exempted cities before and after the law changed. We find that the effect on prices is limited and conclude that the burden of the tax is indeed shared between producers and consumers. Regarding welfare, we find that the VAT is progressive in both absolute and relative terms to the overall expenditure. Finally, we show that an identical change in the VAT rate when inflation is high and persistent doubles its pass-through to inflation and its welfare loss for the average household.
    Date: 2018–11–08
  20. By: ZEW
    Abstract: The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003). The project includes a focus on the effects of tax reforms in the EU28, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States for the period 1998-2017 and their impact on the level of taxation for both domestic and cross-border investment.
    Keywords: European Union, taxation, effective tax, corporate tax
    JEL: H25
    Date: 2017–11
  21. By: Daniel Borebly (Department of Economics, University of Strathclyde)
    Abstract: The German Aviation Tax (AT) is a tax levied on departing passengers from German airports. The synthetic control method is used to generate counterfactual passenger numbers for German airports. The synthetic control method is used to generate counterfactual passenger numbers for German airports, and for airports outside Germany but near the German border. The results presented are consistent with cross-border substitution of passenger demand in response to AT. Most AT exempt airports near the borders have made sizable, significant, gains in passenger numbers since Germany introduced AT. Within Germany, there appears to be a clear distinction in the impact on small/regional airports and that on larger hubs.
    Keywords: aviation taxes, passenger demand, synthetic control
    JEL: H26 H30 L93
    Date: 2018–10
  22. By: Krueger, Dirk; Ludwig, Alexander (Munich Center for the Economics of Aging (MEA))
    Abstract: [English] We characterize the optimal linear tax on capital in an Overlapping Generations model with two period lived households facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of private precautionary saving. For logarithmic utility our full analytical solution of the Ramsey problem shows that the optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income risk. Its sign depends on the extent of risk and on the Pareto weight of future generations. If the Ramsey tax rate that maximizes steady state utility is positive, then implementing this tax rate permanently generates a Pareto-improving transition even if the initial equilibrium is dynamically efficient. We generalize our results to Epstein-Zin-Weil utility and show that the optimal steady state saving rate is increasing in income risk if and only if the intertemporal elasticity of substitution is smaller than 1. [German] Sollten Kapitaleinkommen besteuert werden? Diese Frage hat in der Theorie der optimalen Besteuerung und in ihrer quantitativen Anwendung schon eine lange Reihe ökonomischer Literatur beschäftigt. Frühere Antworten zu dieser Frage, unter Verwendung relativ stilisierter ökonomischer Rahmenbedingungen, waren negativ. Das bedeutet, die Literatur kam zu dem Schluss, dass optimale Kapitaleinkommenssteuern null seien. Dies steht im Gegensatz zu den hohen Steuern auf Kapitaleinkommen, die in allen Industriestaaten zu beobachten sind. Eine aktuellere, größtenteils quantitative Literatur fand hingegen heraus, dass optimale Kapitaleinkommenssteuern positiv sein sollten. Gründe für diese Feststellung sind, dass zum einen Kapitaleinkommenssteuern ein effektiver Ersatz für fehlende altersabhängige Einkommenssteuern sein können, zum anderen dass sie ein effektives umverteilendes Steuerinstrument sind (von einkommensstarken zu einkommensschwachen Haushalten), und zum dritten, dass die Besteuerung von Kapitaleinkommen eine Absicherung gegen Einkommens- oder Renditeschocks aus der ex-ante Perspektive darstellen. Unser theoretisches Paper gibt neue analytische Einsichten für Gründe für optimale Steuern auf Kapitaleinkommen, die Aufschluss darüber geben, welche Mechanismen die Resultate in der überwiegend quantitativen Literatur treiben. Wir legen den Fokus auf einen Effekt, der bisher in der Literatur keine explizite Aufmerksamkeit erfahren hat, der jedoch implizit in zahlreichen quantitativen Studien über optimale Kapitaleinkommenssteuern präsent ist. In Gegenwart von Einkommensrisiken und unvollständiger Absicherung gegen diese, sichern sich Haushalte gegen niedrige Einkommensrealisierung durch privates Sparen ab. Wir zeigen, dass ein solches vorsorgendes Sparverhalten negative Effizienzwirkungen in der aggregierten Volkswirtschaft haben kann, insbesondere für die Renditen aus Kapitalanlagen. Der Staat internalisiert dieses negative Feedback. Wenn diese negativen Feedback-Effekte stark genug sind, dann sollten optimale Kapitaleinkommenssteuern positiv sein. Um diese Einsichten in all ihrer theoretischen Klarheit abzuleiten, halten wir das ökonomische Umfeld, das wir betrachten, sehr stilisiert. Während wir dadurch sehr klare und trennscharfe Charakterisierungen der treibenden Kräfte der optimalen Kapitaleinkommenssteuern liefern können, ist es trotzdem wichtig zu betonen, dass unser theoretischer Beitrag nicht beabsichtigt, ein realistisches ökonomisches Modell für eine quantitative Exploration zu stellen. Folglich ist der Hauptzweck unserer Analyse, hilfreiche Einsichten für eine verbesserte Interpretation der Erkenntnisse in der existierenden quantitativen Literatur über optimale Kapitaleinkommenssteuern zu bieten.
    JEL: H21 H31 E21
    Date: 2018–02–09
  23. By: Dalal Al Ghanim; Ronnie Loeffen; Alex Watson
    Abstract: We introduce two models of taxation, the latent and natural tax processes, which have both been used to represent loss-carry-forward taxation on the capital of an insurance company. In the natural tax process, the tax rate is a function of the current level of capital, whereas in the latent tax process, the tax rate is a function of the capital that would have resulted if no tax had been paid. Whereas up to now these two types of tax processes have been treated separately, we show that, in fact, they are essentially equivalent. This allows a unified treatment, translating results from one model to the other. Significantly, we solve the question of existence and uniqueness for the natural tax process, which is defined via an integral equation. Our results clarify the existing literature on processes with tax.
    Date: 2018–11
  24. By: MIYAZAKI Tomomi; SATO Motohiro
    Abstract: This paper examines the effects of property tax reforms at the beginning of the 1990s in Japan through theoretical and empirical investigation. Preferential treatment of farmland in the center of cities and inner suburbs is not favorable because it may hinder changing such land into residential areas and henceforth deter urbanization. We utilize a natural experiment provided by the aforementioned reforms. The results reveal that the proportion of farmland that might have impeded urbanization decreased after the reforms in major cities within metropolitan areas. However, landlords did not necessarily replace all of the land with housing lots, suggesting that the government should have conducted the reforms in a way to promote more conversion.
    Date: 2018–10

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