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on Public Finance |
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Issue of 2024‒02‒19
three papers chosen by |
| By: | de Boer, Henk-Wim (Independent Researcher); Jongen, Egbert L. W. (Leiden University); Koot, Patrick (Dutch Tax and Customs Administration) |
| Abstract: | Following major tax-benet reforms over the past decades, the Netherlands is the international front-runner in stimulating dual-earner couples via the tax system. In this paper we consider whether or not it has perhaps gone too far, using the inverse-optimal method of optimal taxation to recover the implicit social welfare weights for single- and dual-earner couples over time. Our results indicate that the reforms may have gone too far, leading to social welfare weights that are no longer monotonically declining in household income and even negative for some groups (suggesting Pareto-improving reforms are possible). We also consider optimal tax systems for dierent social preferences. |
| Keywords: | optimal taxation, revealed social preferences, dual earners |
| JEL: | C63 H21 H31 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16702&r=pub |
| By: | Sebastien Bradley; Federico Carril-Caccia; Yoto V. Yotov |
| Abstract: | We study the relationship between corporate income taxes and mergers and acquisitions (M&As). To this end, we compile and deploy a dataset consisting of all cross-border and domestic M&A deals for 118 source (acquirer) and 122 destination (target) countries and 84 sectors over the period 1995-2019. From a methodological perspective, we implement leading methods from the empirical gravity literature on trade, foreign direct investment, and migration, and we demonstrate their importance for estimating the impact of corporate income taxes on cross-border versus domestic M&A activity. Our main finding is that a one percentage point increase in target country corporate income tax rates decreases the number of cross-border acquisitions by about 0.8 percent relative to domestic M&As. This result is robust to various sensitivity checks and is comparable to previously published estimates. Nevertheless, our stepwise estimation strategy exemplifies the importance of individual empirical refinements. These should serve as the basis for future work investigating the effects of taxation on bilateral flows. |
| Keywords: | corporate income taxes, mergers and acquisitions, gravity methods |
| JEL: | F10 F14 F21 F23 H25 H87 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10863&r=pub |
| By: | Emilio Congregado (Universidad de Huelva, Spain); Vicente Esteve (Universidad de Valencia and Universidad de Alcalá, Spain); Juan A. María A. Prats (Universidad de Murcia, Spain and European Institute, London School of Economics and Political Science, UK) |
| Abstract: | In this paper, we provide a formal test of Barro’s tax-smoothing model, using Spanish data covering the period 1850-2022. First, we found that the tax-tilting component has been very important for the Spanish government and is a symptom of the existence of a public deficit bias that has existed in Spanish public finances over the sample period. Second, our empirical findings do also support the existence of tax-smoothing in Spanish fiscal policy throughout the sample period. Consequently, there is some evidence that the Spanish economy has engaged in tax-smoothing behavior over the period analyzed, as the Spanish governments responded to expected future changes in government spending by running budget imbalances, rather than altering contemporaneous government revenues. |
| Keywords: | Optimal taxation; Public debt management; Tax-smoothing; Tax-tilting, Spain |
| JEL: | E62 H21 H62 O52 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2401&r=pub |