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on Public Economics |
| By: | Kristoffer Berg |
| Abstract: | As corporate income tax rates have fallen across the world, other capital taxes become more important. This paper studies the choice between income taxation at the corporate and shareholder level. I develop a sufficient-statistics framework to determine optimal tax reforms. The main result is that when the incidence of the corporate income tax on workers is higher than that of shareholder income taxes, lowering the former and reducing the latter is typically optimal. In a policy application, I derive optimal reform directions for corporate and shareholder income taxes for a large and a small economy. |
| Keywords: | corporate income tax, dividend taxes, optimal capital taxation |
| JEL: | F21 H21 H22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12149 |
| By: | Theshne Kisten; Mmalefa Motaung; Nhlonipho Sehlangu |
| Abstract: | This paper estimates the tax capacity and tax effort of the nine provinces in South Africa, allowing for the assessment of the revenue-mobilizing ability of provinces and overall tax system efficiency. Provincial tax capacity and effort is estimated via a stochastic frontier approach using the true random effects model. |
| Keywords: | Taxation, Tax revenue, Random effects, South Africa |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-60 |
| By: | Kimberly A. Clausing (Peterson Institute for International Economics); Maurice Obstfeld (Peterson Institute for International Economics) |
| Abstract: | The year 2025 brought a remarkable shift in the role of tariffs in the US economy, as the Trump administration simultaneously escalated the use of broad tariffs and ensured that Congress enacted large income tax cuts. This fiscal switch has important implications for the US tax system. While maintaining tariff rates at summer 2025 levels would generate large government revenues, such broad tariffs have significant downsides: Efficiency losses would approach one-third of revenues raised, the tax system would be less progressive, and there would be serious tax administration concerns. The fiscal shift also has significant macroeconomic implications, although probably not the intended ones. Broad tariffs generate a large negative supply shock, simultaneously raising prices and reducing macroeconomic activity. |
| Keywords: | Tariffs, revenue, deadweight loss, optimal tariff, pass-through, rentseeking, retaliation, redistribution, industrial policy |
| JEL: | F13 F32 F38 F42 F52 H21 H23 H26 H68 L52 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iie:wpaper:wp25-19 |
| By: | Cloyne, James; Dimsdale, Nicholas; Postel-Vinay, Natacha |
| Abstract: | The impact of fiscal policy on economic activity is still a matter of great debate. And, ever since Keynes first commented on it, interwar Britain, 1918–39, has remained a particularly interesting and contentious case—not least because of its high-debt environment and turbulent business cycle. This debate has often focused on the effects of government spending, but little is known about the effects of tax changes. In fact, a number of tax reforms in the period focused on long-term and social objectives, often reflecting the personality of British Chancellors. Based on extensive historiographical research, we apply a narrative approach to the interwar period in Britain and isolate a new series of exogenous tax changes. We find that tax changes have a sizable effect on GDP, with multipliers exceeding 2 within two years. Our estimates provide new evidence on the effects of tax changes, contribute to the historical debate about fiscal policy in the interwar period and are also consistent with the sizable tax multipliers found after World War II. |
| Keywords: | macroeconomic policy; fiscal policy; taxation; public finance; fiscal history; multiplier; narrative approach |
| JEL: | E23 E32 E62 H20 H30 N10 N44 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123706 |
| By: | Belhaj Zineb (USMBA - Université Sidi Mohamed Ben Abdellah [Fès], FSJES-Fès - Faculté des Sciences Juridiques, Economiques et Sociales de Fès); Nmili Mohamed (FSJES-Fès - Faculté des Sciences Juridiques, Economiques et Sociales de Fès, USMBA - Université Sidi Mohamed Ben Abdellah [Fès]) |
| Abstract: | Taxation is a fundamental pillar of the social contract, embodying the link between the state and its citizens. It relies on voluntary compliance by taxpayers, based on principles of solidarity, fairness, and legality. However, this cooperation is now being undermined by the proliferation of tax non-compliance, whether it be illegal fraud or legally ambiguous practices such as tax evasion or aggressive tax optimization. These forms of transgression, grouped under the concept of tax deviance, contribute to the erosion of the legitimacy of the tax system and weaken trust in public institutions. Far from being limited to simple transgression of tax rules, tax deviance encompasses a variety of behaviors influenced by economic, social, institutional, and psychological factors. The main determinants identified include the perception of tax inequity, the complexity of tax systems, the individual characteristics of taxpayers (level and source of income), and the incentives arising from tax rates and control and penalty mechanisms. From this perspective, the article adopts a qualitative approach based on a narrative review of the literature, aiming to provide a critical synthesis of existing work by highlighting the interaction of these variables in a logic where taxpayers arbitrate between compliance and non-compliance. Keywords : Tax deviance, tax fraud, determinants |
| Abstract: | La fiscalité constitue un pilier fondamental du contrat social, incarnant le lien entre l'État et ses citoyens. Elle repose sur une adhésion volontaire des contribuables, fondée sur des principes de solidarité, d'équité et de légalité. Cependant, cette coopération est aujourd'hui mise à mal par la multiplication des comportements de non-conformité fiscale, qu'ils relèvent de la fraude illégale ou de pratiques juridiquement ambivalentes comme l'évasion ou l'optimisation fiscale agressive. Ces formes de transgression, regroupées sous le concept de déviance fiscale, participent à l'érosion de la légitimité du système fiscal et affaiblissent la confiance envers les institutions publiques. Loin de se limiter à la simple transgression des règles fiscales, la déviance fiscale englobe une diversité de comportements influencés par des facteurs économiques, sociaux, institutionnels et psychologiques. Les principaux déterminants identifiés incluent la perception d'iniquité fiscale, la complexité des dispositifs fiscaux, les caractéristiques individuelles des contribuables (niveau et source de revenu), ainsi que les incitations découlant des taux d'imposition et des mécanismes de contrôle et de sanction. Dans cette perspective, l'article adopte une approche qualitative fondée sur une revue narrative de littérature, visant à proposer une synthèse critique des travaux existants en mettant en lumière l'interaction de ces variables dans une logique où les contribuables arbitrent entre conformité et fraude selon une évaluation rationnelle des coûts et bénéfices |
| Keywords: | African Scientific Journal, Déviance fiscale, Fraude Fiscale, Détérminant |
| Date: | 2025–08–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05224913 |
| By: | Mikayel Sukiasyan |
| Abstract: | What is the best macroprudential regulation when households differ in their exposure to profits from the financial sector? To answer the question, I study a real business cycle model with household heterogeneity and market incompleteness. In the model, shocks are amplified in states with high leverage, leading to lower investment. I consider the problem of a Ramsey planner who can finance transfers with a distortive tax on labor and levy taxes on the balance sheet components of experts. I show that the optimal tax on capital purchases is zero and the optimal policy relies mostly on a tax on deposit issuance. The latter redistributes between agents by affecting the equilibrium rate on deposits. The welfare gains from optimal policy are due to both redistribution and insurance and are larger the more unequal the initial distribution is. A simple tax rule that targets a level of leverage can achieve most of the welfare gains from optimal policy. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.10933 |
| By: | Harouna Kinda (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne) |
| Abstract: | Resource-rich developing nations continue to grapple with the paradox of abundant natural wealth failing to translate into sustainable growth—a phenomenon often dubbed the ‘resource curse.' As global initiatives strive to harness natural resources for development, this paper evaluates the ‘treatment effect' of Extractive Industries Transparency Initiative (EITI) membership on tax revenue mobilization in resource-rich developing countries. We hypothesize that EITI implementation enhances governance quality in these nations, thereby improving tax revenue mobilization. Analyzing a sample of 83 resource-rich developing countries from 2001–2017 and employing propensity score matching (PSM) and difference-in-differences (DID) with multiple treatment groups and periods, our findings reveal that EITI membership significantly boosts tax revenue mobilization compared to non-EITI countries, with a dynamic causal impact since the commitment year. Additionally, EITI compliance generates a substantial surplus in tax revenues. Our results remain robust when examining disaggregated tax revenues, such as corporate income tax non-resource tax and resource tax revenues. While the EITI is not a panacea, its rigorous implementation, driven by enhanced governance, appears to significantly bolster tax revenue mobilization. |
| Keywords: | EITI, tax revenue mobilization, Governance, Extractive industries, Natural resources |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-03208955 |
| By: | Muellbauer, John |
| Abstract: | This note complements the 'Q and A' dealing with common questions on the property tax proposal initially explained in a brief article in August 2025 in the Financial Times (see my longer article for more detail on the proposal). This note examines the expected tax revenues from implementing my property tax proposal, using a range of possible assumptions. These revenue estimates are compared with estimates of current council tax revenues from band G and H properties. My complementary policy suggestion of cutting stamp duty to a maximum rate of 5%, but retaining current allowances, is discussed in Question 14 in the accompanying Q & A document (also summarised in the conclusions). |
| Keywords: | council tax, housing, macroeconomics, property tax |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2025-18-a |
| By: | Muellbauer, John |
| Abstract: | Since the FT piece appeared on 1 September 2025, see expanded version, many questions have been raised. It is inevitable that a column restricted to under 650 words leaves out helpful explanation. This Q & A aims to clarify the policy - which proposes to reform Council Tax for the top two valuation bands - and address any questions or misunderstandings found in the commentary to the FT piece. |
| Keywords: | council tax, housing, macroeconomics, property tax |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2025-18-b |
| By: | Anastasiia Antonova; Gernot Müller |
| Abstract: | When confronted with sectoral shocks, policymakers often resort to targeted, sector-specific taxes in an \emph{ad hoc} fashion. Based on the New Keynesian Network model, we characterize the optimal tax response to sectoral shocks: it features twice as many tax instruments as there are sectors, is budget-neutral, and not confined to the sector where the shock originates. We show that the optimal policy can be approximated by a simple rule that responds to inflation in the shocked sector and adjusts tax instruments in other sectors according to input-output linkages. We study its quantitative performance in a calibrated version of the model. |
| Keywords: | sectoral shocks, sales taxes, production subsides |
| JEL: | E32 E62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12144 |
| By: | Salla Kalin (Labour Institute for Economic Research Labore); Tomi Kyyrä (VATT Institute for Economic Research); Tuomas Matikka (VATT Institute for Economic Research) |
| Abstract: | We use detailed, population-wide data from Finland to provide evidence of the impact of earnings disregard policies on part-time work during unemployment spells.The share of part-time workers among benefit recipients increased sharply from 10% to 18% over a few years after the implementation of earnings disregards in unemployment beneifts and housing allowances, which allowed individuals to earn up to 300 euros per month without reductions in their benefits. Using variation in the impact of the reforms on incentives between individuals eligible for different types of benefits, we estimate a 21–30% increase in participation in part-time work due to the implementation of earnings disregards. On average, we find no economically sizable effects of the earnings disregards on future full-time employment or the likelihood of leaving unemployment benefits, but find moderate positive employment effects among those unemployed individuals who are more attached to the labor market. |
| Keywords: | labor supply; social benefits; part-time work; earnings disregards |
| JEL: | H24 J21 J22 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:36 |
| By: | Silvia Domit; Yomna Gaafar; Duncan MacDonald; Ms. Carolina Osorio-Buitron |
| Abstract: | Despite recent progress, Türkiye’s low labor force participation (LFP) rate is macrocritical and stands out internationally. This paper examines two channels through which fiscal policy can affect LFP. First, we estimate the impact of Türkiye’s 2022 Minimum Living Allowance reform, which removed tax disadvantages faced by secondary earners. Second, we simulate the impact of conditional subsidies on Türkiye’s LFP. The analysis was based on four empirical models estimated for Türkiye using labor force survey micro data. The results confirmed that: (i) Turkish secondary earners increased their labor supply by more than primary earners following the removal of tax disadvantages in the 2022 reform; (ii) conditional childcare subsidies lead to a large increase in LFP at relatively low fiscal costs; (iii) conditional subsidies can achieve better labor market outcomes and further reduce fiscal costs compared to direct transfers. |
| Keywords: | Türkiye; Tax Reform; Labor Force Participation; Childcare Subsidies; Employment; Personal Income Tax; TaxFit |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/187 |
| By: | Bensnes, Simon (Statistics Norway); Hernaes, Øystein (Ragnar Frisch Centre for Economic Research); King, Max-Emil M. (Ragnar Frisch Centre for Economic Research) |
| Abstract: | This study examines the impact of receiving one additional week of paid vacation on labor market attachment among Norwegian workers aged 60+. Employing a triple-differences estimation strategy, we exploit age-based eligibility thresholds before and after a 2009 reform to identify causal effects. Our findings indicate that the extra leave has negligible effects on both employment, sickness absence and disability benefit receipt in the year workers first receive it. If anything, some workers use the additional vacation time to increase earnings from secondary employers. The results imply that policymakers should consider alternative measures to mandated leave to support an aging workforce. |
| Keywords: | triple-differences, labor supply, older workers, paid vacation, public policy |
| JEL: | H8 I12 J22 J26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18121 |
| By: | Hoehn-Velasco, Lauren (Georgia State University); Huang, Yu-Ting (Georgia State University); Yusuff, Olanrewaju (Georgia State University) |
| Abstract: | Public insurance reimbursement policies shape the structure and reach of healthcare markets. In this study, we examine the 1980 federal Medicaid mandate requiring states to reimburse Certified Nurse-Midwives, one of the first reforms targeting non-physician providers. We find the mandate increased midwife-attended deliveries by 1.1 percentage points, an 80% rise, adding about 1, 100 midwife births annually per state by 1985. We also document a geographic expansion of midwife services into unserved areas and increased hospital employment, consistent with supply-side labor market responses. Our findings demonstrate that reimbursement mandates directly alter healthcare delivery by expanding provider use and reshaping the workforce. |
| Keywords: | non-physician provider, public insurance, certified nurse-midwife, maternal health, Medicaid reimbursements, health insurance. |
| JEL: | H51 H75 I18 I11 I13 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18149 |