|
on Public Economics |
| By: | Gabriela-Adina Păun (Bucharest University of Economic Studies, Roman Square 6, 010374, Bucharest, Romania Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - This empirical study provides a comprehensive bibliometric analysis of fifty years of Base Erosion and Profit Shifting (BEPS) research. It examines the field's evolution, identifying key contributors, seminal publications, and leading journals while tracing shifts in research focus and emerging thematic trends. The study also highlights critical gaps, particularly in assessing the long-term revenue effects of BEPS measures, the interaction between digital services taxes and OECD/G20 initiatives, and the interdisciplinary dimensions of tax policy analysis, offering an integrated perspective on BEPS research. Methodology/Technique – A bibliometric analysis was conducted using data from the Web of Science and Scopus databases, employing performance analysis and scientific mapping techniques. VOSviewer software was used to analyze co-occurrence, co-citation, bibliographic coupling, and thematic clusters, providing a comprehensive overview of the evolution of BEPS research. Findings – International taxation research has shifted in response to evolving policy priorities and global fiscal challenges. Early studies focused on multinational corporate income, BEPS, and tax competition, highlighting profit shifting and regulatory gaps. Attention has since expanded to tax evasion, tax havens, and investment, reflecting growing concerns over illicit financial flows and the effects of tax policies on capital mobility, while underscoring the need for stronger enforcement and coordinated policy responses. Tax harmonization within the European Union remains a significant challenge, balancing national sovereignty with OECD/G20 tax initiatives. Further exploration is required on the interaction between European Union policies and international reforms, particularly in managing policy differences and coordinating tax strategies among member states. Novelty – This study presents empirical evidence on the evolution of BEPS research over five decades, highlighting key gaps in policy enforcement, digital economy taxation, and developing country implications. Challenges related to digital services taxes and evolving business models are addressed, with a call for innovative taxation solutions. An interdisciplinary approach is advocated, integrating public policy, political economy, and behavioral economics to improve tax compliance and policy outcomes. Type of Paper - Empirical" |
| Keywords: | Base Erosion and Profit Shifting; Bibliometric analysis; Digital taxation; EU tax policy; Global minimum tax; Global profit shifting; Pillar One and Pillar Two |
| JEL: | G38 H26 K34 |
| Date: | 2025–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jfbr227 |
| By: | Naruki Notsu (Osaka School of International Public Policy, The University of Osaka); Haruaki Hirota (Faculty of Economics, Musashi University); Nobuo Akai (Osaka School of International Public Policy, The University of Osaka) |
| Abstract: | This study examines the effects of enhancing the tax enforcement of administration on the tax gap, focusing on inter-municipal cooperation (IMC). IMC refers to collaborative tax collection efforts among multiple municipalities and promotes the aggregation of tax collection resources and expertise, improving tax enforcement. Using the time variation in IMC creation across municipalities, we show that IMC substantially improves the tax gap measurement by reinforcing tax enforcement in local governments. Our findings suggest that enhanced administrative capability in tax enforcement can be an effective tool against noncompliance in ways other than facilitating voluntary compliance. |
| Keywords: | Inter-municipal cooperation, Tax enforcement, Tax compliance |
| JEL: | H71 H77 H83 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:osp:wpaper:24e004rev. |
| By: | Julia Cots-Capell; Aieshwarya Davis; Duncan MacDonald |
| Abstract: | The TaxFit microsimulation model calculates the taxes payable and benefits receivable by hypothetical households across an expanding list of countries. It simulates personal income taxes and social security contributions for all adults in a household, as well as family benefits, social assistance, in-work benefits, and caregiver support. Users define household characteristics—such as gross income levels and family composition—to facilitate cross-country comparisons of tax burdens and benefit generosity. When microdata is available, it can be uploaded to generate diagnostic indicators that better reflect the population, assess the distributional effects of tax and benefit reforms, and estimate fiscal costs. This technical manual provides a detailed overview of the TaxFit model, explains its underlying assumptions, and offers guidance on using the Stata-based model and its associated online tool. |
| Keywords: | tax; social protection; simulation; work incentives; employment; informal work; effective tax rates |
| Date: | 2025–05–05 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2025/008 |
| By: | Friedman, Sam; Gronwald, Victoria; Summers, Andrew; Taylor, Emma |
| Abstract: | Many countries are concerned about the migration of top taxpayers. Yet we know little about how economic elites weigh the taxes they pay when deciding where to live. Existing evidence on tax flight is either quantitative or comes from wealthy individuals issuing warnings in the media. Drawing on in-depth interviews with thirty-five individuals in the top 1 per cent of the wealth distribution in the UK, we find a striking stigma attached to tax migration. Participants disparaged those who move for tax purposes and several characterized low-tax destinations as boring and culturally barren. Yet the most important factor restraining tax migration was the attachment to London as a place to work and live, particularly its unparalleled highbrow cultural infrastructure. These findings demonstrate that wealthy individuals often choose to prioritize investments in place-specific cultural capital above the relatively small gains in economic capital associated with tax migration. |
| Keywords: | tax; tax migration; cultural capital; wealth |
| JEL: | F22 H21 H24 J61 K34 Z13 |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126860 |
| By: | Burkhard Heer |
| Abstract: | The optimal capital income tax rate has been shown to be nonzero in overlapping generations (OLG) models, as it helps redistribute income between cohorts and individuals with different labor supply elasticities and individual productivities. We show in a medium-scale OLG model that the optimal capital income tax rate is highly sensitive to the assumption of capital-skill complementarity in production technology. The imposition of the production function of Krusell et al. (2000) rather than the standard Cobb - Douglas function increases the optimal capital tax from 9.2% to 27.3% in our benchmark model. We also study the sensitivity of this result in the context of an aging economy and find that the optimal capital income tax increases over the upcoming decades depending on possible pension reforms and debt policies. |
| Keywords: | capital income taxes, Chamley-Judd result, skill-biased technological change, demographic change. |
| JEL: | E13 H21 H24 H25 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11845 |
| By: | Ignacio González; Juan A. Montecino; Joseph E. Stiglitz |
| Abstract: | We study the optimal design of corporate tax policy in a textbook life-cycle model featuring two key deviations: (i) firms are imperfectly competitive and (ii) households save by purchasing equity shares in a stock market. In this simple environment, the financial wealth of savers is equal to the sum of the productive capital owned by firms and a component capturing the NPV of unproductive rents – what we term “market power wealth” (MPW). We show that this novel component has non-trivial macroeconomic effects, with important implications for optimal corporate tax policy. In particular, MPW significantly crowds out productive investment and accordingly can rationalize a high corporate tax rate. The optimal corporate tax code in our setting assigns the statutory corporate tax rate to target the financial value of pure profits while incentivizing capital accumulation with a partial expensing of firm investment costs. |
| JEL: | E20 G12 H21 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33544 |
| By: | Fabiani, Beatrice; Costa-Font, Joan; Aranco, Natalia; Stampini, Marco; Ibarrarán, Pablo |
| Abstract: | Demographic and social changes Latin America and the Caribbean (LAC) have called the traditional system of long-term care service provision into question, prompting many countries to prioritize long-term care reform on their social policy and fiscal agendas. One of the issues at hand is determining the expected service costs as well as the financial viability and sustainability of various funding options. To date, estimating the demand for care in Latin American countries is limited due to the underdeveloped and fragmented systems in place. This paper estimates the potential cost of various long-term care service packages that differ in terms of the extent and type of government funding. Second, we investigate the financing sustainability of different coverage scenarios across seventeen countries in the LAC region. Finally, we assess the feasibility of various funding mechanisms and discuss the main benefits and drawbacks considering each country's unique constraints. Our estimates indicate that, while all seventeen LAC countries have the potential to implement a LAC system based on general taxation, a social insurance system is only feasible in a handful set of countries. |
| Keywords: | long-term care; population aging; Latin America and the Caribbean; social insurance; public finance; tax financing |
| JEL: | H50 I18 J14 J18 O54 |
| Date: | 2025–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127121 |
| By: | Alessio Baldassarre (Ministry of Economy and Finance); Danilo Carullo (Ministry of Economy and Finance) |
| Abstract: | This paper evaluates the impact of a targeted tax credit introduced by the 2016 Stability Law and designed to stimulate investment in Italy’s Southern regions. Employing a new sub-national Computable General Equilibrium model tailored to Italy, the study captures national and regional effects by leveraging a Social Accounting Matrix that details the interconnections between commodities, sectors, and agents, encompassing both regional and national fiscal structures. The analysis considers the direct impacts of the tax credit on the targeted Southern regions as well as the indirect spillovers on non-beneficiary regions, contributing to the ongoing discussion on North-South convergence. Our findings show a modest increase in all components of national GDP, with more substantial regional effects, particularly in Southern Italy, with spillover benefits reaching the Center and North in the medium and long term. The regional fiscal multipliers are positive and align with the literature. Additionally, the cross-regional analysis reveals that Southern GDP growth positively influences Northern regions, indicating a degree of economic integration across Italy. The tax credit policy also appears to slow the widening of the North-South value-added gap, supporting gradual regional convergence. However, the measure does not achieve full fiscal self-coverage through increased tax revenues, resulting in a net fiscal cost for the central government. |
| Keywords: | CGE, policy impact, investment tax credit, regional convergence |
| JEL: | C63 D58 E22 H32 R58 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:ahg:wpaper:wp2025-21 |
| By: | Pablo D. Fajgelbaum; Cecile Gaubert |
| Abstract: | We revisit the rationale for place-based policies using a canonical urban framework with agglomeration spillovers. We derive six main lessons. First, the spatial allocation is inefficient even when spillover elasticities are constant across regions. Second, under constant and positive spillover elasticities, the optimal policy is a national wage subsidy funded by a lump sum tax, reallocating activity towards higher wage locations. Third, more generally, a region's optimal labor subsidy rate equals its spillover elasticity. Fourth, place-based policies that favor low-wage locations on efficiency grounds are justified when density has negative spillover effects, spillover elasticities are higher in low-wage locations, or across-skill spillovers favor more mixing in low-wage locations. Fifth, government spending on infrastructure, investment incentives, or housing policies cannot fully correct externalities from labor density. Sixth, housing supply elasticities do not affect the design of first-best place-based policies targeting agglomeration spillovers. |
| JEL: | H21 H23 R12 R13 R42 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33517 |
| By: | Costa-Font, Joan; Raut, Nilesh |
| Abstract: | We examine the impact of the Long-Term Care Insurance Partnership (LTCIP) program—a collaborative initiative between the state-level Medicaid programs and private health insurance companies designed to promote private long-term care insurance (LTCI)—on insurance ownership and Medicaid utilization. We draw on individual-level longitudinal data and employ a difference-in-differences (DD) design adjusted for the staggered implementation of the program between 2005 and 2018. Our results suggest that the rollout of the LTCIP program led to a 1.54 percentage point (pp) (14.7%) increase in LTCI ownership and a 0.82 pp (13.3%) reduction in Medicaid uptake. Our estimates suggest that these combined effects led to an approximate average cost saving of $74 per 65-year-old participant. These findings are explained by a certain degree of substitution between LTCIP and traditional LTCI contracts, ultimately postponing the use of Medicaid benefits. |
| Keywords: | long-term care partnerships; long-term care insurance; Medicaid; United States; difference-in-differences |
| JEL: | I18 H11 H24 |
| Date: | 2025–03–15 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127078 |
| By: | Jara, H. Xavier; Montesdeoca, Lourdes; Colmenarez, María Gabriela; Moreno, Lorena |
| Abstract: | The aim of this paper is to analyze the contribution of tax-benefit reforms to changes in income poverty and inequality in Ecuador from 2003 to 2022. For this, we use decomposition methods based on counterfactual distributions obtained using tax-benefit microsimulations which allow quantifying the relative contribution of policy reforms to changes in income poverty and inequality, compared to other contributors, including demographic characteristics and changes in the market income distribution. The focus is on changes over five subperiods, namely 2003–08, 2008–14, 2014–2019, 2019–20 and 2020–22. Our results show that tax-benefit reforms introduced between 2003 and 2020 contributed to the reduction of poverty and inequality in Ecuador, reinforcing the positive contribution of changes in market income and other population factors in all subperiods between 2003 and 2014, and mitigating the negative contribution of such factors between 2014 and 2020. Over the last period of analysis (2020–22), the post-pandemic economic recovery was broadly due to an improvement of market income with an almost nil contribution of tax-benefit reforms. |
| Keywords: | inequality; poverty; direct taxes; cash transfers; decomposition |
| JEL: | H23 H53 I32 |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127504 |