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on Public Finance |
| By: | TRUYTS, Tom (Katholieke Universiteit Leuven, CES, B-3000 Leuven, Belgium; UniversitŽ catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium) |
| Abstract: | Commodities communicate. Consumers choose a consumption bundle both for its intrinsic characteristics and for what this bundle communicates about their qualities (or 'identity') to spectators. We investigate optimal indirect taxation when consumption choices are motivated by two sorts of concerns: intrinsic consumption and costly signaling. Optimal indirect taxes are introduced into a monotonic signaling game with a finite typespace of consumers. We provide sufficient conditions for the uniqueness of the D1 sequential equilibrium in terms of strategies. In the case of pure costly signaling, signaling goods can in equilibrium be taxed without burden and the optimal quantity taxes on these goods are infinite. When commodities serve both intrinsic consumption and signaling, optimal taxes can be characterized by a generalization of the Ramsey rule, which also deals with the distortions resulting from signaling. |
| Keywords: | optimal taxation, indirect taxation, costly signaling, identity |
| JEL: | C72 H21 |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2010013&r=pub |
| By: | David E.Wildasin (University of Kentucky) |
| Abstract: | Acting in the interest of their residents, within limits imposed by Federal statute and by the Constitution, states have incentives to impose taxes on the profits of corporations owned by nonresidents. This paper presents a model within which a state, using an apportionment formula that includes a sales factor, would choose to tax the income of out-of-state corporations that derive revenues from the sale or licensing of intangible assets to in-state customers, provided that such corporations have sufficient nexus to be taxable. Although such policies enable states to capture rents from nonresidents, they also introduce tax distortions by imposing implicit tariffs on sales by out-of-state firms. |
| Keywords: | Corporate Taxation, Nexus |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:1011&r=pub |
| By: | Genschel, Philipp; Jachtenfuchs, Markus |
| Abstract: | The paper analyzes the common assumption that the EU has little power over taxation. We find that the EU's own taxing power is indeed narrowly circumscribed: its revenues have evolved from rather supranational beginnings in the 1950s towards an increasingly intergovernmental system. Based on a comprehensive analysis of EU tax legislation and ECJ tax jurisprudence from 1958 to 2007, we show that at the same time, the EU exerts considerable regulatory control over the member states' taxing power and imposes tighter constraints on member state taxes than the US federal government imposes on state taxation. These findings contradict the standard account of the EU as a regulatory polity which specializes in apolitical issues of market creation and leaves political issues to the member states: despite strong safeguards, the EU massively regulates the highly salient issue of member state taxation. -- |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:114&r=pub |
| By: | Sanandaji, Tino (Research Institute of Industrial Economics (IFN)); Wallace, Björn (Stockholm School of Economics) |
| Abstract: | In this paper we present survey evidence suggesting that there exists a sizeable fiscal illusion amongst the general public in Sweden. Respondents in a nation-wide and representative survey systematically underestimate the share of an ordinary worker’s income that is transferred to the public sector. Furthermore, we make a theoretical distinction between tax illusion and fiscal obfuscation, a proposed novel type of fiscal illusion. It has previously been assumed that fiscal illusion derives from a fragmentized tax system with many small, and largely invisible, taxes which tend to be ignored or underestimated by the tax payers. We hypothesize that this systematic bias could in addition emanate from misapprehensions of the real incidence of a tax. Evidence is presented that this could apply even when taxes are few and large, contrary to the tax complexity hypothesis. When this misperception derives from seemingly deliberate tax design and tax labeling, as appears to be the case with the payroll taxes in Sweden, we call it fiscal obfuscation. |
| Keywords: | Fiscal Illusion; Fiscal Obfuscation; Tax Illusion; Tax Labeling; Tax Structure; Personal Income Taxation |
| JEL: | H11 H22 H24 H30 |
| Date: | 2010–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0837&r=pub |
| By: | Francesco Flaviano Russo (University of Napoli Federico II and CSEF) |
| Abstract: | I propose an analysis of tax evasion in Italy using the data collected by the website evasori.info. This site collects reports by random internet users of the transactions in which they were involved that, lacking any legal receipt, were hidden from the tax authority. I interpret this experiment as a test of the attitude towards tax evasion by the community in which the tax offender operates: less reported episodes are an indication of a more lenient attitude. Since a more lenient attitude of the community is a lower cost of evading taxes, a smaller number of reports must be associated to less tax evasion. I show that the data confirm this claim. I also show that the presence of younger, less educated individuals and the size of the irregular labor force are associated to a more lenient attitude towards tax evasion. |
| Keywords: | Tax Morale, Tax Evasion Reports |
| JEL: | K34 |
| Date: | 2010–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:254&r=pub |