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on Public Finance |
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Issue of 2018‒11‒26
eight papers chosen by |
| By: | Cerqua, Augusto; , |
| Abstract: | This paper exploits a sudden income tax rate increase in a large Italian region to examine whether this induced taxpayers to change their tax-related behavior. By using a spatial regression discontinuity design and a detailed dataset at the municipality level, we find a sizable and persistent decrease in declared income only for the self-employed and entrepreneurs. |
| Keywords: | Income tax; tax evasion; spatial regression discontinuity design |
| JEL: | C21 H26 J21 |
| Date: | 2018–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89857&r=pub |
| By: | Cremer, Helmuth; Roeder, Kerstin |
| Abstract: | We study the taxation of couples when female wages do not reflect their true productivity. We show that the expression for the marginal tax rates of the male spouses is the same as in a Mirrleesian world where wages reflect true productivities. Marginal taxes for the female spouses are reduced because of a Pigouvian correction. Consequently, the wage discrimination pleads for a lower marginal tax on the female spouse. Furthermore, the distortion of a couples' tradeoff between male and female labor supply is the same as in a Mirrleesian world without a gender wage gap. It only depends on true productivities and not on wages. In other words, the tax system completely neutralizes the extra distortion introduced by the wedge between the female spouse's wage and her true productivity. |
| Keywords: | Couples' income taxation; gender wage gap; Household Labor Supply; optimal income taxation |
| JEL: | D10 H21 H31 J16 J22 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13159&r=pub |
| By: | Elliott Isaac (Tulane University) |
| Abstract: | Joint taxation can exacerbate the deadweight loss of taxation due to labor supply responses, but evidence is scarce. I estimate the efficiency costs and labor supply effects of joint taxation in the United States by leveraging tax variation created by federal same-sex marriage recognition following the 2013 United States v. Windsor Supreme Court ruling. I find moderate hours responses among primary earners and larger labor force participation responses among secondary earners. My findings suggest that joint taxation is less efficient and generates less tax revenue than individual taxation, and that lowering tax rates for secondary earners could improve efficiency. |
| Keywords: | taxation, labor supply, same-sex marriage, sufficient statistics |
| JEL: | J22 H24 H21 D10 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:1809&r=pub |
| By: | Nikos Tsakiris; Panos Hatzipanayotou; Michael S. Michael |
| Abstract: | We develop a model of a small open economy, where pollution per unit of consumption between domestically produced and imported quantities of the same good differs. We show that the first-best policy combination calls for consumption taxes on all polluting goods, and Border Tax Adjustment (BTA) measures, i.e., tariffs or import subsidies. We identify conditions under which well known tariff-tax reform policies for developing economies, such as a consumer-price-neutral piecemeal reform of a trade and a consumption tax, and a consumer-price-neutral reform of all trade and consumption taxes improve welfare. We also evaluate whether a consumer-price-neutral reform of a tariff and a consumption tax is superior to a reform of a tariff alone. |
| Keywords: | Consumption generated Pollution; Optimal Taxation; Border Tax Adjustments; Trade and Consumption Tax Reforms |
| JEL: | F13 F18 H20 H21 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:17-2018&r=pub |
| By: | Akcigit, Ufuk; Grigsby, John; Nicholas, Tom; Stantcheva, Stefanie |
| Abstract: | This paper studies the effect of corporate and personal taxes on innovation in the United States over the twentieth century. We use three new datasets: a panel of the universe of inventors who patent since 1920; a dataset of the employment, location and patents of firms active in R&D since 1921; and a historical state-level corporate tax database since 1900, which we link to an existing database on state-level personal income taxes. Our analysis focuses on the impact of taxes on individual inventors and firms (the micro level) and on states over time (the macro level). We propose several identification strategies, all of which yield consistent results: i) OLS with fixed effects, including inventor and state-times-year fixed effects, which make use of differences between tax brackets within a state-year cell and which absorb heterogeneity and contemporaneous changes in economic conditions; ii) an instrumental variable approach, which predicts changes in an individual or firm's total tax rate with changes in the federal tax rate only; iii) event studies, synthetic cohort case studies, and a border county strategy, which exploits tax variation across neighboring counties in different states. We find that taxes matter for innovation: higher personal and corporate income taxes negatively affect the quantity and quality of inventive activity and shift its location at the macro and micro levels. At the macro level, cross-state spillovers or business-stealing from one state to another are important, but do not account for all of the effect. Agglomeration effects from local innovation clusters tend to weaken responsiveness to taxation. Corporate inventors respond more strongly to taxes than their non-corporate counterparts. |
| Keywords: | business taxation; Corporate taxation; firms; Income taxes; Innovation; inventors; R&D tax credits; state taxation |
| JEL: | H24 H25 H31 J61 O31 O32 O33 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13167&r=pub |
| By: | Zouhair Aït Benhamou |
| Abstract: | In comparing the tax burden between developed and developing economies, we argue that the Laffer curve is sensitive to two factors, namely the size of underground economic activities and tax collection costs. The baseline model exhibits counter-intuitive results for developing and emerging economies. Insofar as we find that they are able to extract higher tax rates and revenues in comparison with developed countries. The differences are due to the values computed for structural parameters and steady-state variables. However, when the share of underground activities is taken into account, the Laffer curve is pushed downward, while tax collection costs shift the peak rate to the left. |
| Keywords: | Laffer curve, Taxes, Tax burden, Underground economy, tax collection cost, calibration, estimation, GMM, SMM |
| JEL: | H21 H26 H30 E32 E37 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2018-44&r=pub |
| By: | Nikos Tsakiris; Panos Hatzipanayotou (Athens University of Economics and Business); Michael S. Michael |
| Abstract: | We develop a model of a small open economy, where pollution per unit of consumption between domestically produced and imported quantities of the same good differs. We show that the first-best policy combination calls for consumption taxes on all polluting goods, and Border Tax Adjustment (BTA) measures, i.e., tariffs or import subsidies. We identify conditions under which well known tariff-tax reform policies for developing economies, such as a consumer-price-neutral piecemeal reform of a trade and a consumption tax, and a consumer-price-neutral reform of all trade and consumption taxes improve welfare. We also evaluate whether a consumer-price-neutral reform of a tariff and a consumption tax is superior to a reform of a tariff alone. |
| Keywords: | Consumption generated Pollution, Optimal Taxation, Border Tax Adjustments, Trade and Consumption Tax Reforms |
| JEL: | F13 F18 H20 H21 |
| Date: | 2018–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1811&r=pub |
| By: | Bernardin Akitoby; Anja Baum; Clay Hackney; Olamide Harrison; Keyra Primus; Veronique Salins |
| Abstract: | How do countries mobilize large tax revenue—defined as an average increase in the tax-to-GDP ratio of 0.5 percent per year over three years or more? To answer this question, we build a novel dataset covering 55 episodes of large tax revenue mobilization in low-income countries and emerging markets. We find that: (i) reforms of indirect taxes and exemptions are the most common tax policy measures; (ii) multi-pronged tax administration reforms often go hand in hand with tax policy measures or are stand alone; and (iii) sustainability of the episodes hinges on tax administration reforms in the key compliance areas (risk-based audits, registration, filing, payment, and reporting). |
| Date: | 2018–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/234&r=pub |