nep-pub New Economics Papers
on Public Finance
Issue of 2012‒03‒28
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The Costs of VAT: A Review of the Literature By Luca Barbone; Richard Bird; Jaime Vázquez Caro
  2. Tax Structure and Entrepreneurship By Mina Baliamoune-Lutz; Pierre Garello
  3. Inequality, tax avoidance and financial instability By Landier, Augustin; Plantin, Guillaume
  4. Financial Transaction Tax Contributes to More Sustainability in Financial Markets By Dorothea Schäfer

  1. By: Luca Barbone; Richard Bird; Jaime Vázquez Caro
    Abstract: This paper reviews the published literature on the definition and measurement of the administrative and compliance costs of taxation, with special reference to VAT (including evasion and fraud) in the European Union.
    Keywords: Taxation, Subsidies, Revenue
    JEL: H20 H21 H25 H26 M48
    Date: 2012
  2. By: Mina Baliamoune-Lutz (Department of Economics, University of North Florida); Pierre Garello (CERGAM-CAE, Aix-Marseille Université)
    Abstract: Using macro-level panel data, we examine the effects of taxation and tax progressivity on entrepreneurship in a large group of European countries. We address two main objectives. First, we try to explore whether tax increases discourage entrepreneurial activity, distinguishing between the effects on existing self-employment and new self-employment (nascent entrepreneurship). Second, we investigate the impact of tax progressivity on entrepreneurship, focusing in particular on the impact on new self-employment. We find that tax progressivity at higher-than-average incomes has a robust negative effect on nascent entrepreneurship. We discuss on the policy implications of our results.
    Date: 2011–07
  3. By: Landier, Augustin; Plantin, Guillaume
    Abstract: We model the link between inequality, lack of political commitment, and ex-cessive risk taking. If politicians cannot commit to a long-term tax schedule, increasing returns to tax avoidance induce the middle class to take on non rewarded ?nancial risk despite risk aversion. Electoral pressure may lead an incumbent politician to endorse this excessive risk taking if income inequal-ities are large. By increasing the scope for tax avoidance, globalization of capital and human capital markets might have increased ?nancial fragility.
    Date: 2011–10
  4. By: Dorothea Schäfer
    Abstract: We argue that a financial transaction tax complements financial market regulation. With the tax, governments have an additional instrument at hand to influence trading activity. FTT aims to reduce regulatory arbitrage, flash trading, overactive portfolio management, excessive leverage and speculative transactions of financial institutions. The focus clearly addresses these classes of activities that have contributed to the financial crisis. However, if contrary to expectations harmful transactions will not be curbed, FFT generates at least large tax revenues that can contribute to cover the costs of the financial crisis. The trend towards centralized clearing and depositaries makes tax evasion more difficult than it was in the past. Tax avoidance is, of course, never completely avoidable. Therefore the effect of the tax should be monitored closely so that governments can react quickly if tax loopholes and taxinduced geographical relocation plans of financial institutions come to light.
    Keywords: Financial stability, transaction tax, public good, central depository
    JEL: G20 G24 G28
    Date: 2012

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