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on Public Finance |
| By: | Laszlo Goerke (University of Tübingen, CESifo and IZA Bonn) |
| Abstract: | Decisions by firms and individuals on the extent of their tax payments have generally been treated as separate choices. Empirically, a positive relationship between corporate and personal income tax evasion can be observed. The theoretical analysis in this paper shows that a manager's decision on the firm's behaviour will be independent of his personal preferences if the gain from reducing corporate tax payments is certain, as in the case of tax avoidance. If, however, the firm evades taxes so that the manager's income depends on whether the firm's activities are detected or not, corporate and personal income tax evasion choices cannot be separated. |
| Keywords: | firms, individuals, tax evasion, uncertainty |
| JEL: | H24 H25 H26 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2239&r=pub |
| By: | Sybren Cnossen |
| Abstract: | Later this year, the European Commission has to submit a report to the Council of Ministers and the European Parliament with its views on tobacco tax policy in the EU. A 2004 publication issued by the Commission expressed the beliefs that tobacco consumption should be controlled by increasing tobacco excises and that harmonisation should proceed on the basis of specific rates. This paper reviews and evaluates EU tobacco tax policies. It supports the move towards specific taxation, but notes that there are conceptual and empirical limits to excessively high tobacco taxes. Smokers appear to pay their way and cigarette smuggling is a growing menace to health and revenue objectives. |
| Keywords: | tobacco taxation; European Union |
| JEL: | H2 H8 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:67&r=pub |
| By: | Joseph J. Doyle, Jr.; Krislert Samphantharak |
| Abstract: | Despite the considerable attention paid to the theory of tax incidence, there are surprisingly few estimates of the pass-through rate of sales taxes on retail prices. This paper estimates the effect of a suspension and subsequent reinstatement of the gasoline sales tax in Illinois and Indiana on retail prices. Earlier laws set the timing of the reinstatements, providing plausibly exogenous changes in the tax rates. Using a unique dataset of daily gasoline prices at the station level, retail gas prices are found to drop by 3% following the elimination of the 5% sales tax, and increase by 4% following the reinstatements, compared to neighboring states. Some evidence also suggests that the tax reinstatements are associated with higher prices up to an hour into neighboring states, which provides some evidence on the size of the geographic market for gasoline. Effects across different competitive environments are considered as well. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0517&r=pub |
| By: | Hasret Benar (Eastern Mediterranean University); Glenn Jenkins (Queen's University) |
| Abstract: | This paper considers alternative forms of regulation and taxation of the casino sector. The model considers the situation of a typical tourist destination country that is using casinos to attract and entertain foreign tourists. The objective is to invest in the sector efficiently while maximizing the amount of government revenue or profits accruing to the country. The regulator must determine how the price of gambling will be set, how many casinos will be allowed to enter the industry and the form and rates of taxation. Four alternative forms of regulation are considered: price regulation, state-owned monopoly, private monopoly and casino association regulation. Turnover taxes on the amount of funds gambled and also annual taxation of the fixed costs of the casinos are evaluated. Applications of the models are carried out for North Cyprus. The conclusion is that the economic efficiency costs and the revenue losses from the absence of effective regulation in these tourist destinations can be very substantial with welfare costs equal to the approximately 75 percent of the tax revenue generated by this sector. Furthermore it shows that while a tax on turnover can be efficient in the case of a competitive industry or a cartel association form of regulation, it will be distortionary if a multi-plant private monopoly is controlling the sector. In contrast a tax on fixed costs will lead to an efficient result in the case of a competitive industry, but it will lead to economic inefficiencies if the sector is regulated by a casino association that controls the number of casino entering the sector. |
| Keywords: | Casino regulation, taxation, state-monopoly, welfare cost |
| JEL: | H21 H32 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1088&r=pub |