nep-pub New Economics Papers
on Public Finance
Issue of 2008‒05‒10
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Tax Policy in Developing Countries: Looking Back and Forward By Roy W. Bahl; Richard M. Bird
  2. Aging, Inequality and Social Security By Ryo Arawatari; Tetsuo Ono
  3. Japan's Corporate Income Tax - Overview and Challenges By Thomas Dalsgaard
  4. Corporate Income Tax Competition in the Caribbean By Koffie Nassar
  5. Political Economy of Multi - Level Tax Assignments in Latin American Countries:Earmarked Revenue Versus Tax Autonomy By Giorgio Brosio; Ehtisham Ahmad

  1. By: Roy W. Bahl (Georgia State University); Richard M. Bird (Rotman School of Management)
    Abstract: We review the changing nature of tax policy in developing countries over the last 30 years and consider what factors determining the level and structure of tax revenues in such countries may have changed recently and how such changes may affect future developments.
    Date: 2008–05
  2. By: Ryo Arawatari (Graduate School of Economics, Osaka University); Tetsuo Ono (Graduate School of Economics, Osaka University)
    Abstract: This paper develops an overlapping-generations model including wage inequality within a generation and intra- and intergenerational resource reallocation via social security. Based on the concept of a stationary Markov perfect equilibrium, the paper focuses on the feedback mechanism between current individualsf decisions on saving and future voting on social security. The paper demonstrates the determination of social security via probabilistic voting and its consequence for consumption inequality within a generation. It is shown that when the elderly are politically powerful, (i) the economy attains an oscillatory path of inequality and social security, and (ii) aging may reduce consumption inequality.
    Keywords: Aging; Inequality; Social security; Political Economy; Stationary Markov Perfect Equilibrium
    JEL: D72 H55 J10
    Date: 2008–04
  3. By: Thomas Dalsgaard
    Abstract: The structure of Japan's corporate income tax system is broadly in line with those of other G7 countries. However, relatively high marginal and average effective tax rates prompt the question of whether adjustments should be considered to meet the objectives of promoting growth, investment and competitiveness in a revenue neutral manner. This paper discusses key issues and trade-off's related to changes in the corporate income tax system. It does not provide recommendations, but raises issues that could hopefully serve as useful inputs to the ongoing discussion and tax debate in Japan.
    Keywords: Corporate taxes , Japan , Tax rates , Income taxes ,
    Date: 2008–03–24
  4. By: Koffie Nassar
    Abstract: Motivated by the concern that corporate income tax (CIT) competition may have eroded the tax base, this paper calculates average effective tax rates to measure the impact of CIT competition, including the widespread use of tax holidays, on the tax base for 15 countries in the Caribbean. The results not only confirm erosion of the tax base, but also show that CIT holidays must be removed for recent tax policy initiatives (such as accelerated depreciation, loss carry forward provisions, and tax harmonization) to be effective. These findings suggest that the authorities should either avoid granting CIT holidays or rely more on other taxes (including consumption taxes such as the value-added tax) in order to broaden the tax base.
    Keywords: Income taxes , Caribbean , Tax incentives , Tax rates , Investment ,
    Date: 2008–03–28
  5. By: Giorgio Brosio; Ehtisham Ahmad
    Abstract: A weakness of decentralization and overall tax reforms in Latin America is the lack of attention to adequate taxation at the subnational government. A reliance on shared taxes with extensive earmarking leads to weak subnational accountability and soft budget constraints. The paper explores the options for expanding subnational taxation in Latin America. A range of subnational tax instruments might be considered, but interactions between new tax assignments and the system of transfers is important from a political economy perspective.
    Keywords: Intergovernmental fiscal relations , Latin America , Tax reforms ,
    Date: 2008–03–25

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