nep-pub New Economics Papers
on Public Finance
Issue of 2009‒05‒16
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  2. Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT vs. Direct Taxation By Rita de la Feria
  3. Taxation trends in the European Union: 2008 edition By Florian Woehlbier; Marco Fantini; Beata Heimann; Gaetan Nicodeme; Katri Kosonen; Werner Vanborren; Milan Pein; Stefanie Knoth; Federico Martire; Alessandro Lupi; Monika Wozowczyk; John Verrinder; Anne Paternoster

  1. By: Daniele Nosenzo (University of Nottingham); Martin Sefton (University of Nottingham)
    Abstract: In this paper we examine voluntary contributions to a public good when the timing of contributions is endogenously determined by contributors, focusing on the simple quasi-linear setting with two players (Varian, 1994). We show that the move order that is predicted to emerge is sensitive to how commitment opportunities are modeled. We show that a favorable move order is predicted to emerge in Hamilton and Slutsky's (1990) "observable delay" extended game, but a detrimental move order is predicted to emerge in their "action commitment" extended game. We then report a laboratory experiment designed to examine whether the predicted move ordering emerges, and how this impacts overall contributions, in these extended games. The results are similar in both extended games. We find that when the detrimental move order is observed, contributions are indeed lower, as predicted. However, this detrimental move order is seldom observed. Instead of committing to low contributions, players tend to avoid making a commitment. These experimental results on timing decisions suggest that commitment opportunities may be less damaging to public good provision than previously thought.
    Keywords: Public Goods, Voluntary Contributions, Sequential Contributions, Endogenous Timing, Action Commitment, Observable Delay, Experiment
    JEL: H41 C72 C92
    Date: 2009–04
  2. By: Rita de la Feria (University of Oxford Centre for Business Taxation)
    Abstract: The aim of this paper is to establish whether VAT place of supply rules are more effective allocation rules than international tax rules currently governing income taxation. This is done through the analysis of the “place where the activity is effectively carried out” (PWAECO) and the “place where the supply is effectively carried out” (PWSECO) as allocation rules. The paper discusses allocation rules applicable to (corporate) income under international taxation provisions, analysing its limitations and weaknesses, as well as some of the proposed solutions. The attention then shifts to VAT. The place of supply rules under European VAT will be assessed, in particular the role of the PWSECO rule therein; similarly to the approach taken income international tax rules, an analysis of the limitations and weaknesses of the place of supply system within European VAT will then be undertaken. The paper concludes with considerations on whether VAT rules for allocation of taxing rights are more effective than direct taxation’s allocation rules, or whether VAT offers a false promise, further highlighting that in tax – as in life – the grass always seems greener on the other side.
    Date: 2009
  3. By: Florian Woehlbier; Marco Fantini (European Commission; European Commission); Beata Heimann (European Commission); Gaetan Nicodeme (European Commission); Katri Kosonen (European Commission); Werner Vanborren (European Commission); Milan Pein (European Commission); Stefanie Knoth; Federico Martire; Alessandro Lupi (European Commission); Monika Wozowczyk (European Commission); John Verrinder (European Commission); Anne Paternoster (European Commission)
    Abstract: Taxation trends in the European Union: 2008 covers the development of taxation in all 27 Members of the European Union and Norway in a comparable format since 1995. The report is organised as follows: Part I offers an overview of taxation in Europe, describing the trends in the total tax ratio, the structure of revenues by tax type, the distribution of revenues amongst government levels, and the main developments in the rates of the personal and corporate income tax. Part II focuses on taxation of consumption, labour, and capital, as well as on environmental taxation. Part III consists of 28 Country Chapters illustrating, for each Member State (and Norway), the revenue trends and supplying a summary description of the tax system. This chapter outlines the main results from Parts I and II.
    Keywords: European Union, taxation
    JEL: H23 H24 H25 H27 H71
    Date: 2008–04

This nep-pub issue is ©2009 by Kwang Soo Cheong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.