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on Public Finance |
| By: | Dyck, Daniel |
| Abstract: | This study investigates how strategic interactions between corporate tax planning and tax enforcement are affected by two policy instruments: strengthening tax enforcement by increasing the number of specialized enforcement staff and improving tax audit technologies. I employ an economic model with a board of director's investment in a Tax Control Framework (TCF) and a tax manager's tax planning effort jointly shaping corporate tax planning and a tax auditor's technology-based audit decision. I show that the board only invests in the TCF when the enforcement environment is sufficiently strict, because it trades-off the costs and benefits of tax planning. Since strengthening tax enforcement decreases tax planning effort, the result can be less investment in a TCF in a strict enforcement environment, implying that TCF investment and enforcement can be strategic substitutes. Strikingly, I identify conditions under which improvements in tax audit technology increase corporate tax planning and impair tax audit efficiency, due to a crowding out of audit incentives. This result contradicts the view that improving audit technologies is universally effective, particularly in tax authorities with adequate staffing. |
| Keywords: | tax control framework, tax planning, tax risk management, tax audit technology, tax enforcement |
| JEL: | H26 H32 M42 M48 C70 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:arqudp:314430 |
| By: | Congressional Budget Office |
| Abstract: | Extending the 10-year budget projections it published on January 17, 2025, CBO projects that federal debt held by the public, boosted by sustained deficits, will grow far beyond any previously recorded level over the next 30 years. |
| JEL: | E20 E60 E61 E62 E66 H50 H51 H53 H55 H60 H61 H62 H63 H68 |
| Date: | 2025–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:cbo:report:61187 |
| By: | Rod Tyers (University of Western Australia Business School, Perth, Australia) |
| Abstract: | Motivation is offered for the scenario in which a large country imposing a general tariff, notwithstanding gains toward fiscal balance, suffers a contraction in output and employment, with output and net welfare effects that depend on monetary policy and are generally larger than the associated undergraduate dead-weight efficiency losses. A global model is then used to simulate the effects of such a tariff, demonstrating that, while trading partners would be hurt by the tariff, the US economy would also suffer a contraction. The size of the net welfare effects is shown to depend importantly on targets of monetary policy and their associated inflation rates. Nonetheless, the tariff effects are also shown to be dwarfed by those of a proposed business tax break, which redirects investment to the US and would yield larger domestic gains and foreign punitive losses. |
| Keywords: | tariffs, tax breaks, monetary policy |
| JEL: | F3 E5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:uwa:wpaper:25-02 |
| By: | Muhammad Khudadad Chattha; Jürgen René Blum; Roy Kelly |
| Keywords: | Macroeconomics and Economic Growth-Taxation & Subsidies |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:39554 |