|
on Public Finance |
| By: | Daniel Riera-Crichton; Carlos A. Vegh; Guillermo Vuletin |
| Abstract: | We contribute to the literature on tax multipliers by analyzing the pitfalls in identification and measurement of tax shocks. Our main focus is on disentangling the discussion regarding the identification of exogenous tax policy shocks (i.e., changes in tax policy that are not the result of policymakers responding to output fluctuations) from the discussion related to the measurement of tax policy (i.e., finding a tax policy variable under the direct control of the policymaker). For this purpose, we build a novel value-added tax rate dataset and the corresponding cyclically-adjusted revenue measure at a quarterly frequency for 14 industrial countries for the period 1980-2009. We also provide complementary evidence using Romer and Romer (2010) and Barro and Redlick (2011) data for the United States. On the identification front, our findings favor the use of narratives à la Romer and Romer (2010) to identify exogenous fiscal shocks as opposed to the identification via SVAR. On the (much less explored) measurement front, our results strongly support the use of tax rates as a true measure of the tax policy instrument as opposed to widely-used, revenue-based measures, such as cyclically-adjusted revenues. |
| JEL: | E32 E62 F3 H20 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18497&r=pub |
| By: | Giancarlo Gandolfo |
| Abstract: | Starting from a new continuous-time non-linear dynamic model of the exchange rate, we formally show that the introduction of a Tobin tax reduces speculators’ prot and inuences the dynamics of the system making it more stable and less prone to chaotic motion. |
| Keywords: | Tobin tax, exchange rate, chaos, continuous-time non-linear dynamics |
| JEL: | F31 F37 C49 C61 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpas:1221&r=pub |
| By: | Liu, Antung Anthony (Resources for the Future) |
| Abstract: | This paper introduces a new argument to the debate about the role of environmental taxes in modern tax systems. Some environmental taxes, particularly taxes on gasoline or electricity, are more difficult to evade than taxes on labor or income. When the tax base is shifted in a revenue-neutral manner toward these environmental taxes, the result is a net reduction in the amount of tax evasion. Using a carbon tax as a motivating example, the "tax evasion effect" is shown to sharply reduce the welfare cost of controlling emissions. A simple computable general equilibrium model suggests that the impact of considering tax evasion can be large: costs are lowered by 28 percent in the United States, by 89 percent in China, and by 97 percent in India. In countries with high levels of pre-existing tax evasion, a carbon tax will pay for itself through improvements in the efficiency of the tax system. |
| Keywords: | environmental regulation, Pigouvian tax, tax evasion, green tax swap, tax interactions |
| JEL: | H21 H26 Q53 Q54 |
| Date: | 2012–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-37&r=pub |
| By: | Claudio Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez) |
| Abstract: | Diesel in Chile receives a different tax treatment depending on its use. If diesel is used in industrial activities the diesel taxes paid can be fully used as a credit against VAT, but if it is used in freight or public transportation (basically trucks and buses) only a fraction of diesel taxes paid can be used as a credit against VAT. As a result of this different tax treatment firms have incentives to use “tax exempted” diesel in activities requiring “non tax exempted” diesel. This tax wedge therefore generates and opportunity for tax evasion. In this paper we analyze the impact of a tax enforcement program implemented by the Chilean IRS, where letters requiring information about diesel tax credits were sent to around 200 firms in 2003. Using different empirical strategies to consider the non-randomness of the selection of firms, we find that firms receiving a letter decreased their diesel tax credits by around 11%. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:uai:wpaper:inv001&r=pub |
| By: | Le, Tuan Minh; Moreno-Dodson, Blanca; Bayraktar, Nihal |
| Abstract: | One of the important factors for economic development is the existence of an effective tax system. This paper deals with the concept and empirical estimation of countries'taxable capacity and tax effort. It employs a cross-country study from a sample of 110 developing and developed countries during 1994-2009. Taxable capacity refers to the predicted tax-to-gross domestic product ratio that can be estimated empirically, taking into account a country's specific macroeconomic, demographic, and institutional features, which all change through time. Tax effort is defined as an index of the ratio between the share of the actual tax collection in gross domestic product and taxable capacity. The use of tax effort and actual tax collection benchmarks allows the ranking of countries into four different groups: low tax collection, low tax effort; high tax collection, high tax effort; low tax collection, high tax effort; and high tax collection, low tax effort. The analysis provides broad guidance for tax reforms in countries with various levels of taxable capacity and revenue intake. |
| Keywords: | Taxation&Subsidies,Subnational Economic Development,Debt Markets,Emerging Markets,Economic Theory&Research |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6252&r=pub |
| By: | Kambale Mirembe, Omer |
| Keywords: | Taxation, DRC, Congo |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iob:wpaper:2012006&r=pub |
| By: | Sedmihradská, Lucie; Haas, Jakub |
| Abstract: | Existing published research of the relationship between budget transparency and fiscal performance confirms the expectations that higher budget transparency is associated with smaller budget deficits and lower public debt. However, our previous research did not bring such clear results and raised a fundamental question: Why should greater transparency improve fiscal performance? The objective of the proposed paper is to evaluate the relationship between budget transparency and fiscal performance. Based on the literature review we have identified three channels through which increased transparency may limit excessive public expenditures resulting in budget deficit and public debt: (1) reduce fiscal illusion, (2) decrease information asymmetry between politicians and voters which may improve accountability and increase political competition, and (3) strengthen the enforcement of fiscal rules. The results of statistical analysis (conditional means analysis for 2008 and correlation and regression analysis for 2003 to 2009) did not prove any significant negative relationship between budget transparency, measured by the Open Budget Index, and budget deficit or public debt. |
| Keywords: | budget transparency; fiscal performance; Open Budget Index |
| JEL: | J88 H61 |
| Date: | 2012–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42260&r=pub |