nep-pub New Economics Papers
on Public Finance
Issue of 2023‒02‒06
six papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The effect of tax price on donations: evidence from Canada By Ross Hickey; Brad Minaker; A. Abigail Payne; Joanne Roberts; Justin Smith
  2. A Statistical Inquiry into Gender-Based Income Inequality in Canada By Ali R. Kaazempur-Mofrad
  3. Revenue Implications of GST on Indian State Finances. By Mukherjee, Sacchidananda
  4. Lebanon: Technical Assistance Report on Putting Tax Policy Back on Track By International Monetary Fund
  5. The New Version of Latvian CGE Model By Konstantīns Beņkovskis; Oļegs Matvejevs
  6. Who Pays for Higher Carbon Prices? Illustration for Lithuania and a Research Agenda By Immervoll, Herwig; Linden, Jules; O'Donoghue, Cathal; Sologon, Denisa Maria

  1. By: Ross Hickey (University of British Columbia Okanagan); Brad Minaker (University of Guelph); A. Abigail Payne (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Joanne Roberts (Yale-NUS College); Justin Smith (Wilfrid Laurier University)
    Abstract: Using a large administrative dataset from Canada we estimate that the tax price elasticity of charitable donations is -1.9. When we allow for heterogeneity of this parameter across the income distribution, we observe a large elasticity at the bottom of the distribution between -3 and -4, and an elasticity closer to -1 at the top. We find evidence that the response to tax price occurs on both the intensive margin of how much to give, and the extensive margin of whether to give or not.
    Keywords: donations, charity, tax price elasticity
    JEL: H31 H24 H40
    Date: 2023–01
  2. By: Ali R. Kaazempur-Mofrad
    Abstract: Income inequality distribution between social groups has been a global challenge. The focus of this study is to investigate the potential impact of female income on family size and purchasing power. Using statistical methods such as simple linear regression, maximum likelihood analysis, and hypothesis testing, I evaluated and investigated the variability of female pre-tax income with respect to family size. The results obtained from this study illustrate that for each additional household member, the average purchasing power decreases. Additionally, the Bayesian analysis indicates that the probability for an individual with a pre-tax income of at least one and two standard deviations above the population mean is female is approximately 1/3 and 1/4, respectively, further highlighting the gender-based income inequality in Canada. This analysis concludes that although female pre-tax income has no statistically significant impact on family size, the female pre-tax income per person has a statistically significant impact on family size.
    Date: 2022–12
  3. By: Mukherjee, Sacchidananda (National Institute of Public Finance and Policy)
    Abstract: Assessing the revenue implications of GST on Indian state finances cannot be contained to compare the revenue stream which is subsumed into GST with State GST collection alone. Since GST subsumes many taxes from state tax bases, comparing the revenue performance of taxes which are outside the GST framework would be equally important. Moreover, in federal system revenue implication of shortfall in tax collection of the federal government is also likely to spill-over to sub-national finance in terms of lower tax devolution. Sustaining revenue streams of state governments is important for sustainable Public Finance Management (PFM) and therefore a comprehensive assessment of state finances before and after GST would be important. This paper attempts to fill the gap in exiting literature by assessing the revenue of 18 major states during pre- and post-GST periods.
    Keywords: Revenue assessment ; Goods and Services Tax (GST) ; State Finances ; Revenue protection ; GST Compensation ; India
    JEL: H20 E62 H26
    Date: 2023–01
  4. By: International Monetary Fund
    Abstract: Lebanon’s tax revenue more than halved between 2019 and 2021, in the face of the deepest economic crisis since the end of the civil war. This report identifies tax policy reform options to stop the drain on Lebanon’s tax revenue in the immediate and near-terms and to move toward a more efficient, effective, and inclusive tax system in the medium-term.
    Keywords: Tax Reform Crisis and Taxation VAT Efficiency Inequality
    Date: 2023–01–13
  5. By: Konstantīns Beņkovskis (Latvijas Banka); Oļegs Matvejevs (Latvijas Banka)
    Abstract: This paper describes the new version of Latvian CGE model, which is now an integral part of the joint CGE-EUROMOD modelling system. Special attention is devoted to the labour market and consumption blocks of CGE that are substantially improved compared with the previous version. We briefly describe the motivation to link Latvian CGE with Latvian EUROMOD and provide major technical details. We also provide an example of the policy simulation by the joint CGE-EUROMOD system, demonstrating how the introduction of the progressive personal income tax rate affected the Latvian economy at macro, industry and micro level.
    Keywords: CGE model, Latvia, labour market, consumption, EUROMOD
    JEL: D58 C68 H2 H6 D9
    Date: 2023–01–18
  6. By: Immervoll, Herwig (OECD); Linden, Jules (LISER (CEPS/INSTEAD)); O'Donoghue, Cathal (National University of Ireland, Galway); Sologon, Denisa Maria (LISER (CEPS/INSTEAD))
    Abstract: This paper lays out an approach, and a research agenda, for assessing the impact of carbon pricing on household budgets, and of possible compensatory government transfers that can be financed through carbon-tax revenues. It relies on a rich set of available data and policy models and combines them in a way that is informative for mapping the gains and losses at the household level in the short term as countries transition to a low-carbon economy. A particular focus is on linking information on carbon emissions and consumption patterns (which is needed for quantifying carbon-tax burdens), with income data and tax-transfer policy models (needed for assessing government policies that aim to cushion or offset carbon-tax burdens). The approach is illustrated for a carbon-tax scenario based on a recent proposal in Lithuania. Results confirm that direct burdens from higher fuel prices fall disproportionately on lower-income households. But indirect effects, from higher prices of goods other than fuel, are sizeable and broadly "flat" across the income distribution, which dampens regressivity. Low-income households are also found to respond more strongly to rising prices, reducing their burdens and, hence, regressivity. The total effect is only mildly regressive. Recycling carbon-tax revenues back to households allows considerable scope for avoiding or cushioning losses for large parts of the population, and existing policy models can be used to design compensation measures that facilitate majority support for carbon tax packages.
    Keywords: carbon tax, climate change, inequality, revenue recycling
    JEL: C8 D12 D31 H23 Q52
    Date: 2023–01

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