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on Public Finance |
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Issue of 2016‒05‒28
seven papers chosen by |
| By: | DAS-GUPTA Arindam (Goa Institute of Management); B. ESTRADA Gemma (Asian Development Bank); PARK Donghyun (Asian Development Bank) |
| Abstract: | This paper proposes a method for constructing a tax administration measure of effectiveness or TAME, and describes its desirable properties. TAME was empirically constructed using data from external audits of value-added tax administrations of India’s state governments. TAME was used to quantitatively assess the impact of tax administration effectiveness on tax revenues. The impact was found to be both statistically significant and large. The causes of tax administration effectiveness in the poorly performing states were then identified. Finally, this paper suggests guidelines for constructing TAMEs for other jurisdictions and time periods. |
| Keywords: | effectiveness, India, tame, tax administration, tax revenues, value-added tax |
| JEL: | H21 H25 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2016-17&r=pub |
| By: | Merriman, David (University of Illinois at Chicago) |
| Abstract: | Conventional economic theory intuitively holds that local business property taxes, which account for over one-third of the state and local taxes that firms pay, should be efficiently structured in order to recover the exact cost of providing public services to these firms. However, this conceptual thinking does not accord with observed geographic and over-time variation in business taxation. To better explain these discrepancies, the author develops an alternative theoretical model with heterogeneous firms, some of which are more profitable than others in certain locations. This model more precisely captures observed business tax revenues and its implications are empirically tested using a nationally-representative database of effective tax rates for commercial property and owner-occupied housing. The alternative model better reflects the political and policy tradeoffs that local government officials face between balancing the need for government revenue while maintaining an attractive profit-making environment for businesses and attracting firms that will supply jobs for their constituents. |
| JEL: | H25 H7 R38 |
| Date: | 2016–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:16-2&r=pub |
| By: | Debortoli, Davide (Universitat Pompeu Fabra); Nunes, Ricardo (Federal Reserve Bank of Boston); Yared, Pierre (Columbia University) |
| Abstract: | The current literature on a government's optimal debt maturity structure contends that by purchasing short-term assets and selling long-term debt, it is possible to fully insulate the economy against fiscal shocks. The required short and long positions are large relative to GDP and constant. The market value of debt adjusts automatically and the constant debt positions and fluctuating bond prices insulate against potential shocks. However, achieving the goal of averting future shocks depends on the government perfectly committing to the future fiscal policy, for without this sustained commitment, the large debt positions required to insure against future spending shocks are extremely expensive to service; moreover, the government faces a tradeoff between using the debt maturity structure to service its debt obligations and using it to protect against economic shocks. As the authors point out, in practice a government chooses tax, spending, and debt levels sequentially in each period, taking into account its outstanding debt portfolio and anticipating the behavior of future governments. The paper develops an alternative model of optimal debt maturity that solves the problem of a government's lack of commitment. |
| Keywords: | public debt; optimal taxation; fiscal policy |
| JEL: | E62 H21 H63 |
| Date: | 2016–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:16-4&r=pub |
| By: | Arindam Das-Gupta (Goa Institute of Management, Goa, India); Gemma B. Estrada (Asian Development Bank, Manila, Philippines); Donghyun Park (Asian Development Bank, Manila, Philippines) |
| Abstract: | We propose a method for constructing a tax administration measure of effectiveness or TAME, and describe its desirable properties. We then empirically construct a TAME using data from external audits of VAT administrations of Indian state governments. We then use the TAME to quantitatively assess the impact of tax administration effectiveness on tax revenues. The impact is found to be both statistically significant and large. We then identify causes of tax administration effectiveness in the poorly performing states. We then suggest guidelines for constructing our TAMEs for other jurisdictions and time periods. |
| Keywords: | tax administration, tax revenues, value-added tax |
| JEL: | H21 H25 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:1601&r=pub |
| By: | Congressional Budget Office |
| Abstract: | In 2016, low- and moderate-income workers will face an effective marginal tax rate of 31 percent, on average. Federal individual income and payroll taxes will be the main contributors. |
| JEL: | H20 H24 I38 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:509230&r=pub |
| By: | John Brondolo; Zhiyong Zhang |
| Abstract: | Tax administration improvements have contributed significantly to a doubling of China’s tax-to-GDP ratio and the substantial reduction in taxpayers’ compliance costs since the mid-1990s. This paper describes the key features of China’s tax administration and their evolution over the last 20 years. It also identifes emerging challenges to the tax system and areas where further tax administration improvements are needed to sustain tax revenue and reduce taxpayers’ compliance costs in the future. |
| Keywords: | Tax administration;China;Tax reforms;Risk management;Tax system reviews;Tax Administration, Tax Administration Reform, China Tax Administration |
| Date: | 2016–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:16/68&r=pub |
| By: | Djedje Hermann YOHOU; Michaël GOUJON (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Bertrand LAPORTE (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Samuel GUERINEAU (Centre d'Etudes et de Recherches sur le Développement International(CERDI)) |
| Abstract: | We explore the heterogeneous effects together with the transmission channels of aid on tax revenues in 47 African countries over 1990-2011 using a panel smooth threshold regression model and two alternative tax datasets from IMF and ICTD. We find that aid enhances tax revenues with decreasing returns for a threshold of 6.3% and 23% of GNI for total taxes and non-resource taxes respectively. Aid effect varies across countries and over time, but, on average, is positive. Moreover, we evidence that aid conditions the impact of the level of development, trade, institutions and resource wealth on tax. |
| Keywords: | Africa, Tax data, Revenues, nonlinearities, taxation, foreign aid |
| JEL: | O55 C23 H20 F35 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1811&r=pub |