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on Public Finance |
| By: | Michael Kuklik (Long Island University); Nikita Céspedes (Central Bank of Peru) |
| Abstract: | The optimal capital income tax rate is 36 percent as reported by Conesa, Kitao, and Krueger (2009). This result is mainly driven by the market incompleteness as well as the endogenous labor supply in a life-cycle framework. We show that this model fails to account for the basic life-cycle features of the labor supply observed in the U.S. data. In this paper, we introduce into this model non-linear wages and inter-vivos transfers into this model in order to account for the life-cycle features of labor supply. The former makes hours of work highly persistent and helps to account for labor choices at the extensive margin over the life cycle. The latter allows us to account for labor choices early in life. The suggested model delivers an optimal capital income tax rate of 7.4 percent, which is significantly lower than what Conesa, Kitao, and Krueger (2009) found. |
| Keywords: | Labor supply, optimal taxation, capital taxation, non-linear wage, inter-vivos transfer |
| JEL: | E13 H21 H24 H25 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2014-008&r=pub |
| By: | Patricia Apps; Ray Rees |
| Abstract: | This paper presents the properties of optimal piecewise linear tax systems for two-earner households, based on joint and individual incomes respectively. A key contribution is the analysis of the interaction between second earner wage differences, variation in the price of child care and domestic productivity differences as determinants of across-household heterogeneity in second earner labour supply, and of the resulting relationship between household income and the wellbeing of household members. A central result is that taking account of a richer and more realistic specification of household time use widens the set of cases in which individual taxation is welfare-superior. |
| Keywords: | optimal taxation, labour supply, time use, child care, household production, inequality |
| JEL: | H21 J22 H31 H24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4578&r=pub |
| By: | Till Olaf Weber (The University of Nottingham); Jonas Fooken (Joint Research Centre); Benedikt Herrmann (Joint Research Centre) |
| Abstract: | Most traditional tax policies have been based on classical economic models of tax payers as decision makers.As in many fields where humans make decision, however, more integrated behavioural economic models, that is, models that take into account both psychological and purely economic factors can provide further insights.Therefore, a large literature in the field on the behavioural economics of taxation exists. This report summarizes central parts of this literature, reviewing mainly experimental and observational studies in the academic literature to be informative for policy-makers. It also provides a potential agenda for future research and application of behavioural economic policies with regard to tax compliance. |
| Keywords: | Tax compliance, behavioural economics, economic experiments, survey |
| JEL: | D03 H26 H41 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0041&r=pub |
| By: | Erlend E. Bø; Joel Slemrod; Thor O. Thoresen (Statistics Norway) |
| Abstract: | Supporters of public disclosure of personal tax information point to its deterrent effect on tax evasion, but this effect has not been empirically explored. Although Norway has a long tradition of public disclosure of tax filings, it took a new direction in 2001 when anyone with access to the Internet could obtain individual information on income, wealth, and income and wealth taxes paid. We exploit this change in the degree of exposure to identify the effects of public disclosure on income reporting. Identification of the deterrence effects of public disclosure is facilitated by the fact that, prior to the shift to the Internet in 2001, some municipalities had exposure which was close to the Internet type of public disclosure, as tax information was distributed widely through paper catalogues that were locally disseminated. We observe income changes that are consistent with public disclosure deterring tax evasion: an approximately 3 percent higher average increase in reported income is found among business owners living in areas where the switch to Internet disclosure represented a large change in access. |
| Keywords: | Tax Evasion; Income reporting; Quasi-experiments |
| JEL: | H24 H26 H30 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:770&r=pub |
| By: | Robin Boadway; Michael Keen |
| Abstract: | A fundamental issues in designing any fiscal regime for non-renewable resources is the balance between rent taxes and royalties. This paper reviews the core issues that arise, in terms of both efficient rent extraction and correcting various market failures. Issues of asymmetric information, for instance, can rationalize using both instruments. The paper also shows that, even though they effectively involve the choice of distinct parameters at several dates, rent taxes are not subject to the time consistency problem that is central to the extractive industries, but royalties are (although time consistent royalty policy is efficient conditional on initial resource stocks). |
| Keywords: | rent tax, royalties, resource taxation |
| JEL: | H21 H25 Q30 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4568&r=pub |
| By: | The Consortium consisting of Ramboll Management Consulting, The Evaluation Partnership and Europe Economic Research |
| Abstract: | This study reviews, assesses and compares twelve methodologies which can be used for measuring compliance costs of taxation. These methodologies are: the Standard Cost Model (SCM), Paying Taxes, the Taxpayer/Business Burden Model, the Total Cost of Regulation to Business (TCR), the Scanning Instrument Regulations of Other Compliance Costs (SIROCCO), the Regulatory Check-up Model (RCM), Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government (GIPCC), the Cost-Driven Approach to Regulatory Burden (CAR), the Complexity Index of the UK Office of Tax Simplification, the Total Cost to Serve (TCS), the Tax Information and Impact Note (TIIN), and the Bureaucracy Cost Index (BKI). |
| Keywords: | European Union, taxation, tax compliance costs |
| JEL: | H20 H29 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0040&r=pub |
| By: | Andreas Bernecker |
| Abstract: | Divided government is often thought of as causing legislative deadlock. I investigate the link between divided government and economic reforms using a novel data set on welfare reforms in US states between 1978 and 2010. Panel data regressions show that under divided government a US state is around 25% more likely to adopt a welfare reform than under unified government. An analysis of close elections providing quasi-random variation in the form of government and other robustness checks confirm this counter-intuitive finding. The empirical evidence is consistent with an explanation based on policy competition between governor, senate, and house. |
| Keywords: | divided government, legislative deadlock, policy innovation, US welfare reform, policy competition |
| JEL: | D72 D78 H11 H75 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4564&r=pub |
| By: | Miranda Sarmento, J.; Renneboog, L.D.R. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: This paper presents the main reasons why public-private partnerships (PPPs) are adopted as well as the possible disadvantages for the public and private sectors. By means of two case studies on bridge construction and railway infrastructure (Fertagus and Lusoponte), we elucidate how a PPP is structured and financed. Furthermore, the two case studies illustrate how the renegotiation processes are conducted when the public-private contracts have to be altered and what determines (un)successful renegotiations. |
| Keywords: | Public–Private Partnerships;Concessions;Renegotiations;Public Procurement;Project Risk |
| JEL: | G32 H54 L91 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2014017&r=pub |
| By: | Maxime Demarais-Tremblay (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, Centre Walras Pareto - Université de Lausanne) |
| Abstract: | This paper provides an explanation of the emergence of the standars textbook definition of public goods in the middle of the 20th century. It focuses on Richard Musgrave's contribution in defining public goods as non-rival and non-excludable - from 1939 to 1969. Although Samuelson's mathematical definition is generally used in models of public goods, the qualitative understanding of the specificity of pure public goods owes more to Musgrave's emphasis on the impossibility of exclusion. This paper also highlights the importance of the size of the group to which benefits of a public good accrue. This analysis allow for a reassessment of the Summary table of goods which first appeared in Musgrave and Musgrave (1973) textbook. |
| Keywords: | Richard A. Musgrave; social goods; public goods; non-rivalry; non-exclusion |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00951577&r=pub |
| By: | Kirill Borissov; Joseph Hanna (Laboratoire IDP, Universite de Valenciennes et du Hainaut-Cambresis); Stephane Lambrecht |
| Abstract: | We study a parametric politico-economic model of economic growth with productive public goods and public consumption goods. The provision of public goods is funded by a proportional tax on consumers' income. Agents are heterogeneous in their initial capital endowments, discount factors and the relative weights of public consumption in overall private utility. They vote on the shares of public goods in GDP. We propose a definition of voting equilibrium, prove the existence and provide a characterization of voting equilibria, and obtain a closed-form solution for the voting outcomes. |
| Keywords: | : intertemporal choice, growth, public goods, voting |
| JEL: | D91 O41 H41 D72 |
| Date: | 2014–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:eus:wpaper:ec0114&r=pub |