nep-pub New Economics Papers
on Public Finance
Issue of 2022‒05‒02
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Winners and Losers of the COVID-19 Pandemic: An Excess Profits Tax Proposal By Céline Azémar; Rodolphe Desbordes; Paolo Melindi-Ghidi; Jean-Philippe Nicolaï
  2. The Rate of Tax Avoidance in Manufacturing Companies during a Pandemic By Andalia
  3. Measuring and taxing top incomes and wealth By Advani, Arun; Summers, Andy
  4. Payroll Tax, Employment and Labor Market Concentration By Erick Baumgartner; Raphael Corbi, Renata Narita
  5. Tracking and Taxing the Super-Rich: Insights from Swiss Rich Lists By Enea Baselgia; Isabel Z. Martinez
  6. Firms behavior around tax thresholds in Albania during the 2015 anti-informality campaign - Bunching features, persistence and growth implications By Rrumbullaku, Oltion

  1. By: Céline Azémar; Rodolphe Desbordes; Paolo Melindi-Ghidi; Jean-Philippe Nicolaï
    Abstract: In this paper, we study the gains and losses incurred during the COVID-19 pandemic. We distinguish between the effects of the pandemic and those of the health measures implemented to reduce the death toll, notably ‘the lockdown’. Our theoretical model is focused on within-sector firm heterogeneity and involves imperfect competition in a partial equilibrium setting. A comparison between the gains and losses triggered by both the pandemic and the lockdown indicates that an excess profits tax imposed on the ‘winners’ could partly compensate the ‘losers’ of the same sector.
    Keywords: Excess profits, COVID-19, Lockdown, Imperfect competition, Transfers.
    JEL: L13 H12 H25 H81
    Date: 2022
  2. By: Andalia (Maros Muslim University, Indonesia Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: " Objective - This study aims to compare the level of tax avoidance in manufacturing companies before and during the COVID-19 pandemic. This study uses a descriptive quantitative approach. Methodology/Technique - The objects studied are manufacturing companies listed on the Indonesia Stock Exchange in 2019 and 2020. The sample selection uses the purposive sampling method. Findings - The results of the study were seen based on a table analysis containing the ETR value of each sample company. The results showed there was a significant increase from 2019 to 2020. The practice of tax avoidance by manufacturing companies in the food and beverage sub-sector, as well as the industrial sub-sector showed an increase from 2019 as much as 24% to 53% in 2020. Novelty - This is because several companies with ETR values above 25% in 2019 will actually be below 25% in 2020. There are several reasons that underlie this tax avoidance, such as the declining financial stability of each company in 2020, significantly reduced profits in 2020, and less global economic stability. Type of Paper - Empirical."
    Keywords: Tax Avoidance, Covid-19, economic stability
    JEL: M41 M49
    Date: 2022–03–31
  3. By: Advani, Arun (University of Warwick and IFS); Summers, Andy (LSE and IFS)
    Abstract: Few topics attract such intense political debate as top tax rates : in the UK, this has led to two top income tax rate reforms since the financial crisis. Recently, the measurement of top incomes and wealth has also proved controversial, in both the UK and the US. The chapter by Delestre et al. (2022) examines both of these issues. It first studies the distribution of income in the UK, focusing on the income sources and demographics of those at the top, as well as non-taxable sources of income. It then describes the current taxation of top incomes, and suggests some directions for reform. Mirroring this structure, in this commentary we discuss first the measurement of financial inequalities, focusing on top income and wealth shares, and then the scope for policy reforms to tackle some of the issues raised, also focusing on the UK.
    Date: 2022
  4. By: Erick Baumgartner; Raphael Corbi, Renata Narita
    Abstract: How much employment can be generated by decreasing payroll taxes? We examine this question by exploring the staggered rollout of a large payroll tax reform in Brazil. Using administrative matched employer-employee data, we find an increase of 5 percent on employment due to both firm growth and firm entry, no impact on wages and an increase of 59 percent in profits. Moreover, employment effects are driven by less concentrated labor markets, consistent with predictions from an oligopsony model.
    Keywords: Payroll Tax; Employment; Wages; Profits; Oligopsony
    JEL: H25 H32 J31 J6 J42
    Date: 2022–03–24
  5. By: Enea Baselgia (University of St.Gallen, SIAW Institute); Isabel Z. Martinez (ETH Zurich, Switzerland)
    Abstract: We collect, digitize, and supplement the Swiss rich list for the years 1989–2020 published in the “BILANZ†business magazine to gain new insights on the structure and dynamics of top wealth in Switzerland. Using this data allows us study the the super-rich in Switzerland in ways that were not possible in previous research based largely on tax data. In addition to making this valuable data source accessible for future research, and also discussing its limitations, we make three distinctive contributions to the literature. First, we present a number of new facts on the wealth elite in Switzerland. We show that about 60% of the super-rich are heirs–a much larger fraction than in the United States where many of the super-rich are self-made–and that five in ten super-rich residing in Switzerland are foreignborn. Second, we estimate the sensitivity of the location-decision of super-rich foreigners to a preferential tax scheme that offers wealthy foreigners to be taxed on their expenses rather than on their true income and wealth. We are the first to evaluate this policy–similar to “non-dom†taxation that exists in other countries like the UK or Italy–and show that when some of the Swiss cantons abolished this practice, they lost about 30% of their stock of super-rich taxpayers. Third, we use the wealth series compiled in our BILANZ dataset to estimate the wealth shares of the top 0.01% in Switzerland and show how they compare to earlier estimates by Föllmi and Martínez (2017) based on wealth tax data. We find that top wealth concentration is higher than previously assumed, an conclude that top wealth shares based on tax data constitute a lower bound, while the estimates based on our BILANZ data are upper bounds.
    Keywords: super-rich; wealth inequality; wealth distribution; wealth mobility; top wealth shares
    JEL: D31 H24 C81
    Date: 2022–02
  6. By: Rrumbullaku, Oltion
    Abstract: This article studies the effects of tax thresholds on the behavior of small firms using the tax administration data of the universe of the Albanian firms during and after the anti-informality campaign of the year 2015. The main comparisons are between the year 2014, 2015 and 2016. The features of the firms that did bunch in 2015 were evaluated through a Probit regression. The bunching did persist through the three years in discussion, so it is not a temporary behavior. At the end, the tax threshold does influence in the growth of the firms, especially those firms that have a turnover just under the first threshold.
    Keywords: VAT threshold, Value-added tax, bunching, small firms
    JEL: H21 H25 H26 H32
    Date: 2021–05–01

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