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on Public Finance |
| By: | Kastoryano, Stephen (University of Reading) |
| Abstract: | This paper reveals how tax complexity, in the form of loopholes and assets overlapping different sections of tax returns, contributes to tax avoidance and evasion. Using administrative data from the Netherlands, it shows how an auditing announcement in 2005 triggered large increases in declared assets and properties, predominantly held by the wealthiest segments of society, in unexpected sections of the tax returns. It further takes advantage of a one-year reduction in the dividend tax rate, which coincided with another auditing announcement in 2007, to more specifically assess strategic spontaneous declarations and shifting among shareholders, particularly those with substantial company holdings. The results highlight taxpayer contingency plans and opportunistic behaviour when declaring previously hidden wealth. They also emphasize how the ambiguity of certain assets' classifications can be coopted to strategically shift wealth in response to new tax policies. |
| Keywords: | tax complexity, tax evasion, tax avoidance, auditing announcements |
| JEL: | H26 H83 K34 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17722 |
| By: | Cristiano Cantore; Giovanni Di Bartolomeo; Francesco Saverio Gaudio |
| Abstract: | This paper studies how household heterogeneity affects the level and cyclical behavior of the optimal carbon tax in a real economy. We demonstrate that an equity-efficiency trade-off arises due to income inequality and heterogeneity in the marginal disutility of pollution. Two scenarios are analyzed: one with unrestricted income redistribution to mitigate inequality and another where redistribution is constrained to carbon tax revenues. Our findings reveal that household heterogeneity and redistribution policies significantly shape the level and cyclical behavior of the optimal carbon tax, decoupling it from the social cost of carbon. When the planner prioritizes redistribution towards poorer households, the optimal tax rate is lower than in the unconstrained scenario, and its fluctuations are amplified by countercyclical inequality. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2503.00142 |
| By: | Collin, Matthew Edward |
| Abstract: | This paper estimates the policy and economic impacts of a European Union–led effort to review and “blacklist” jurisdictions based on their compliance with international standards designed to curb corporate profit shifting and private tax evasion. Using a combination of regression discontinuity and difference-and-difference methods, there is evidence of only limited improvements in tax governance four years after the inception of the list. There is also no clear evidence that the listing exercise had any impact on offshore wealth or shifted profits, largely because the bulk of jurisdictions that host both of these were not targeted by the European Union. The results suggest that “coercive” efforts to reduce global tax evasion and avoidance will struggle without better targeting and enforcement. |
| Date: | 2023–05–04 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10435 |
| By: | Stark, Oded (University of Bonn) |
| Abstract: | Following Sen's (1973) characterization of the Gini coefficient as a ratio between a measure of aggregate income-based stress ("depression" in Sen's terminology) and aggregate income, we transform the Gini coefficient into a social welfare function rather than having the Gini coefficient feature as an input in a social welfare function as in Sen (1973 and 1997), Sen (1976), and Sen (1982). The "Gini social welfare function" assigns weights that reflect preferences to aggregate income and to aggregate income-based stress (income inequality), a desirable property that a social welfare function in which the Gini coefficient features as an input does not have. The transformation bears on the formation of public policy and on the welfare analysis of policy interventions. |
| Keywords: | Gini coefficient, aggregate income-based stress, aggregate income, transformation of the Gini coefficient into a social welfare function |
| JEL: | C43 D01 D31 D63 H53 I31 I38 P46 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17716 |
| By: | Stanley, L. Winter; Stanley L. Winer |
| Abstract: | Although reassignment of policy instruments among governments in many federations is a recurring event, there is no widely accepted, positive model of the phenomenon. This stands in contrast to the well established body of work on the normative theory of the efficient federal assignment. In this paper, I study reassignment of the power to tax in the Canadian federation by considering three elements that are likely to be part of any complete, positive analysis. These are: the facts that characterize the fiscal history of reassignment in the Canadian federation; the logic behind the demand for tax and other instruments by provincial and national governments; and the analysis of intergovernmental trade in governing instruments, which adds the supply of instruments and closes the model. While the story I tell is constructed to deal with the Canadian case, I hope that some of the ideas and issues I raise will generalize. |
| Keywords: | federal constitution, reassignment, demand and supply of governing instruments, power to tax, political competition, fiscal history, Canadian fiscal federalism |
| JEL: | H10 H77 D72 D78 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11678 |
| By: | Raluca Pavel; Bernur Acikgoz (IKCU - Izmir Katip Celebi University); Jean‐christophe Poudou (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | We investigate the effects of retroactive audits and varying statutes of limitations on tax compliance through a laboratory experiment. First, we solve a dynamic model using Bellman's solution to show that longer limitation periods promote compliance by raising expected penalties, as each past period carries a higher probability of inspection. Second, in our experiment, we manipulate the statute of limitations (0, 1, 3, and 6 periods), providing data that support the model's predictions. Our data also suggest that a 3-year statute of limitation optimally balances compliance benefits with administrative efficiency.This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. |
| Keywords: | laboratory experiment, retroactive audits, statute of limitations |
| Date: | 2025–02–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04937321 |