nep-pub New Economics Papers
on Public Finance
Issue of 2021‒05‒24
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The Role of Conduit Countries and Tax Havens in Corporate Tax Avoidance By Lejour, Arjan
  2. The Commitment Benefit of Consols in Government Debt Management By Davide Debortoli; Ricardo Nunes; Pierre Yared
  3. Recycling carbon tax revenues in Spain. Environmental and economic assessment of selected green reforms By Ángel Estrada; Daniel Santabárbara
  4. Taxpayer responsiveness to taxation: Evidence from bunching at kink points of the South African income tax schedule By Neryvia Pillay

  1. By: Lejour, Arjan (Tilburg University, Center For Economic Research)
    Keywords: international tax avoidance; corporate income tax; withholding taxes; conduit countries; tax havens; treaty shopping
    Date: 2021
  2. By: Davide Debortoli; Ricardo Nunes; Pierre Yared
    Abstract: We consider optimal government debt maturity in a deterministic economy in which the government can issue any arbitrary debt maturity structure and in which bond prices are a function of the government's current and future primary surpluses. The government sequentially chooses policy, taking into account how current choices -which impacts future policy- feed back into current bond prices. We show that issuing consols constitutes the unique stationary optimal debt portfolio, as it boosts government credibility to future policy and reduces the debt financing costs.
    Keywords: public debt, optimal taxation, fiscal policy
    JEL: H63 H21 E62
    Date: 2021–05
  3. By: Ángel Estrada (Banco de España); Daniel Santabárbara (Banco de España)
    Abstract: The design of the key elements of a public budget-neutral environmental fiscal reform could have very different implications in terms of its environmental and macroeconomic impact. Our proposals rely on a carbon tax on fossil fuels covering all economic sectors. It would be a powerful and efficient instrument for reducing emissions, as it gives economic agents an incentive to find ways to save energy and switch to greener energy sources while generating significant tax revenues whose judicious use may have positive macroeconomic effects. In addition, a carbon tax is easy to administer since it can be integrated into existing fuel excise duties. We build a novel model to assess the environmental and economic impact of a set of environmental fiscal reforms in Spain which are defined by different levels of the carbon tax, the possibility of a border carbon adjustment and alternative uses of the tax revenues generated. In this framework, we incorporate technological innovation, which will allow firms to produce with non-polluting inputs and, specifically, the electricity sector, to increase the role of renewables in its generation mix. The results indicate that carbon tax designs with border carbon adjustment tend to be more effective in lowering emissions in Spain. They also suggest that an appropriately designed environmental fiscal reform may even boost economic activity in the medium term if the revenues are used to reduce other, more distorting taxes.
    Keywords: carbon tax, environmental policy, modelling, green tax reform
    JEL: C6 H2 Q5
    Date: 2021–05
  4. By: Neryvia Pillay
    Abstract: I apply the bunching methodology to South African administrative tax data over the period from 2011 to 2017 to investigate the responsiveness of individual taxpayers to changes in marginal personal income tax rates. I ï¬ nd signiï¬ cant evidence of bunching among the self-employed but no evidence of bunching among wage earners. Among the self-employed, bunching is greatest at the highest kink in the income tax schedule and smallest at the lowest kink. Female self-employed exhibit greater bunching behaviour than male self-employed, and responsiveness appears to decrease with age. The responsiveness of the self-employed appears to be due to tax avoidance by shifting income into future periods through retirement fund deductions, as well as a real labour supply response. Despite the signiï¬ cant excess bunching observed, the implied elasticities of taxable income–under the assumption of a uniform heterogeneity distribution around the kink–are not very large.
    Keywords: taxpayer responsiveness, taxation, bunching, South Africa
    JEL: H24 H31 O12
    Date: 2021–02

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