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on Public Economics |
| By: | Anna Esslinger; Katharina Pfeil; Lars P. Feld |
| Abstract: | Are the effects of tax aversion on labor supply symmetric? In a real-effort online experiment, participants are exposed to manipulated wages and taxes after first experiencing the same reference wage. More participants change their labor supply when encountering a tax increase than when experiencing an equivalent wage decrease. However, there is no significant difference in labor supply change between the groups that received tax decreases and wage increases. Tax averse behavior existing only in the presence of net wage decreases implies asymmetric labor supply responses to taxation. |
| Keywords: | tax aversion, loss aversion, labor supply asymmetry, online experiment |
| JEL: | H20 H30 D91 J22 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11317 |
| By: | Berman, Yonatan (King's College London); Klor, Esteban F. (Hebrew University, Jerusalem) |
| Abstract: | This paper studies the effects of capital tax reforms on retained earnings, dividend tax revenues, and income inequality in Israel between 2001 and 2020. We analyze two major dividend tax reforms: a permanent rate increase in 2012 and a temporary tax relief in 2017. By combining administrative income tax data, household surveys, and national accounts, we find that both permanent and temporary capital tax changes substantially affect retained earnings. The five percentage points increase in the dividend tax rate resulted in an immediate increase of over 100% in the withdrawal of retained earnings and in dividend tax revenues. While the permanent tax increase did not cause a long-term change in retained earnings withdrawals, the temporary tax relief triggered a significant increase in retained earnings after the relief period ended. Using these reforms, we improve the measurement of income inequality by directly observing the distribution of retained earnings. We find stable levels of income inequality in Israel after 2007, with a top 10% income share of around 48%, a high level by international standards. |
| Keywords: | capital tax reform, income inequality, retained earnings |
| JEL: | D3 H2 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17373 |
| By: | Michele Gubello; Nora Strecker |
| Abstract: | This paper studies the effect of income tax progressivity on the disproportionate use of publicly funded higher education. We show that more progressive tax systems increase low-income households’ net fiscal benefit of higher education, making their children more likely to attend university. To increase the university enrollment of children from low-income households, the “degree” of income tax progressivity must increase along the income distribution. “Weakly progressive” tax systems can determine a perverse redistribution equilibrium, in which poorer households subsidize the higher education for richer households. |
| JEL: | I23 H41 H31 H24 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:lis:liswps:889 |
| By: | Laurence O'Brien (Institute for Fiscal Studies) |
| Date: | 2024–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:24/45 |
| By: | Burgstaller, Lilith; Pfeil, Katharina |
| Abstract: | Does whistleblowing deter rule violations when such violations are believed to be common? We examine this question in an online experiment about collaborative tax evasion. We vary whether subjects can blow the whistle on their partner in crime and introduce a high-evasion environment by framing the social norm such that evasion is expected to be common. Our findings show that giving partners in crime the option to blow the whistle on their partner does not significantly deter collaborative tax evasion. Collaborative tax evasion significantly increases in a high-evasion environment compared to an unspecified norm environment, even when whistleblowing is possible. This finding underlines that the norm environment is crucial for evasion and corroborates that whistleblowing is ineffective when both partners benefit from collaborative evasion. We offer several explanations for these findings. |
| Keywords: | Collaborative Tax Evasion, Social Norm, Peer Reporting, Whistleblowing, Online Experiment |
| JEL: | H26 E26 O17 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:aluord:305289 |
| By: | Asen Ivanov (Queen Mary University of London, School of Economics and Finance) |
| Abstract: | I investigate numerically the following question: Given that individuals with different wages disagree over the optimal labour-income tax schedule, how would such disagreements be affected if society restricted itself to using linear tax schedules? I find that there would be (i) a decrease in disagreements within a large segment of the population at the top of the wage distribution, (ii) a sharp decrease in how much a very-high-wage individual disagrees with individuals whose wage is weakly above the median but sufficiently far below her wage, (iii) a sharp decrease in how much a zero-wage individual disagrees with a median-wage individual, and (iv) a decrease in how much a zero-wage individual disagrees with high-wage individuals. |
| Keywords: | labour-income tax; linear tax; redistribution; conflict |
| JEL: | D70 D72 D74 H20 |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:qmw:qmwecw:984 |
| By: | Michael P Keane (Institute for Fiscal Studies); Xiangling Liu (University of New South Wales) |
| Date: | 2024–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:24/48 |
| By: | Sufian Jusoh; Intan Murnira Ramli (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | The Association of Southeast Asian Nations (ASEAN) Member States are some of the most important foreign direct investment destinations in the world. Investment in ASEAN Member States covers all four pillars of investment typology: natural resources, market-seeking, export oriented, and strategic assets. Key sectors – such as semiconductors, tourism, consumer products, e-commerce, banking, and commodities (e.g. nickel) – are expected to benefit from this trend. Many of the investors in ASEAN are multinational enterprises, and multinational enterprises earning €750 million or more in two of the four fiscal years, are now subject to the Global Minimum Tax (GMT) in more than 140 jurisdictions around the world. With the introduction of the GMT, ASEAN Member States must rethink their incentives and investment promotion strategies to maintain their competitive edge over other foreign direct investment destinations around the globe. Latest Articles |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:pb-2024-04 |
| By: | Manuel Flores (Serra Hunter Fellow, Department of Applied Economics, Universitat Autònoma de Barcelona, 08193 Bellaterra, Barcelona, Spain.); Fernando G. Benavides (Centre d’Investigació en Salut Laboral, Universitat Pompeu Fabra & CIBER of Epidemiology and Public Health); Laura Serra-Saurina (CIBER of Epidemiology and Public Health & Research Group on Statistics, Econometrics and Health (GRECS), University of Girona.) |
| Abstract: | We exploit an unexpected labor market reform to estimate the effects of a significant decrease in unemployment insurance (UI) generosity during an economic recession. On July 13, 2012, the Spanish Government reduced the replacement rate from 60% to 50% after 180 days of UI benefit receipt for all spells beginning after July 14, 2012. Using rich linked administrative data and a difference-in-differences approach, we show that the decrease in UI generosity resulted in higher sickness absence rates, thereby reducing the previously documented government savings from this reform. Our findings suggest that both financial stress and moral hazard are possible mechanisms. |
| Keywords: | Unemployment insurance, sickness absence, policy reform, financial stress. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2403 |