nep-pub New Economics Papers
on Public Finance
Issue of 2018‒07‒09
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Tax Progressivity and Self-Employment Dynamics By Arulampalam. Wiji; Papini, Andrea
  2. International tax cooperation and sovereign debt crisis resolution: reforming global governance to ensure no one is left behind By José Antonio Alonso
  3. Taxes and the Location of Targets By Arulampalam. Wiji; Devereux, Michael P; Liberini, Federica
  4. Effects of Institutional History and Leniency on Collusive Corruption and Tax Evasion By Johannes Buckenmaier; Eugen Dimant; Luigi Mittone

  1. By: Arulampalam. Wiji; Papini, Andrea
    Abstract: Analysis of the relationship between taxes and self-employment should account for the interplay between responses in self-employment and wage employment. To this end, we estimate a two-state multi-spell duration model which accounts for both observed and unobserved heterogeneity using a large longitudinal administrative dataset for Norway for 1993-2011. Our findings confirm theoretical predictions, and are robust to various changes to de nitions and sample selections. A policy experiment simulating a fl atter tax schedule in the year 2000, is found to encourage both entry into and exit from self-employment, with an increase of about 11.5 percent innet in flow into self-employment.
    Keywords: Tax progressivity ; Income tax ; Self-employment
    JEL: H24 H25 J24 C41
  2. By: José Antonio Alonso
    Abstract: The paper focuses on two crucial issues that hinder the fiscal sovereignty of developing countries: the reduced level of international tax cooperation, and the lack of appropriate procedures for sovereign debt crisis resolution. The low level of international tax cooperation enables a ‘race to the bottom’ in tax rates among countries, tax avoidance through profit-shifting activities by companies and tax evasion by individuals and companies, based on the existence of non-cooperative jurisdictions. In the last five years, the international community has made some improvements in this field, but the situation remains far from satisfactory. On the other hand, the current procedure for sovereign debt resolution, through negotiations at the Paris Club with the support of the IMF, is not only unfair, but also inefficient. The paper explores alternatives in both fields. Appropriate responses to these international problems would have to show benefits in terms of efficiency and welfare at the global level, and establish fundamentals for countries to take full advantage of their resources, which is a necessary condition for funding policies that will not leave (or push) any nation or social sector behind.
    Keywords: tax system, international tax cooperation, tax avoidance, tax evasion, tax havens, external debt, restructuring debt, sovereign debt resolution
    JEL: E62 F34 F55 H63
    Date: 2018–05
  3. By: Arulampalam. Wiji (Department of Economics,University of Warwick); Devereux, Michael P (Said Business School,Oxford University); Liberini, Federica (ETH Zurich)
    Abstract: We use firm-level data to investigate the impact of taxes on the international location of targets in M & A, allowing for heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise ; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system.
    Keywords: Multinational enterprises ; cross-border expansion ; target choice ; corporation income tax ; mixed logit
    JEL: G34 H25 H32 C25
    Date: 2018
  4. By: Johannes Buckenmaier (Department of Economics, University of Zurich); Eugen Dimant (University of Pennsylvania and Centre for Decision Research and Experimental Economics (CeDEx), University of Nottingham); Luigi Mittone (Cognitive and Experimental Economics Laboratory, University of Trento, Department of Economics)
    Abstract: We investigate the effects of an institutional mechanism that incentivizes taxpayers to blow the whistle on collusive corruption and tax compliance. We explore this through a formal leniency program. In our experiment, we nest collusive corruption within a tax evasion framework. We not only study the effect of the presence of such a mechanism on behavior, but also the dynamic effect caused by the introduction and the removal of leniency. We find that in the presence of a leniency mechanism, subjects collude and accept bribes less often while paying more taxes, but there is no increase in bribe offers. Our results show that the introduction of the opportunity to blow the whistle decreases the collusion and bribe acceptance rate, and increases the collected tax yield. It also does not encourage bribe offers. In contrast, the removal of the institutional mechanism does not induce negative effects, suggesting a positive spillover effect of leniency that persists even after the mechanism has been removed.
    Keywords: Collusive bribery, Institutions, Tax compliance, Leniency, Spillover
    Date: 2018–05

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