|
on Public Finance |
| By: | David Gstrein; Florian Neumeier; Andreas Peichl; Pascal Zamorski |
| Abstract: | Key MessagesThe corporate tax burden falls mainly on firms and property owners, while workers are less affected than earlier studies suggestCommercial property owners bear a substantial share of the burden as higher taxes reduce property valuesThe lower tax burden on workers suggests that corporate taxation is likely more progressive than often assumedBecause land is immobile, corporate tax distorts economic decisions less than expectedCorporate tax debates should go beyond firms and workers to include property markets, with implications for fairness, efficiency, and local tax policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_77 |
| By: | Sugata Marjit; Koushik Hati; Lei Yang |
| Abstract: | This paper explores whether tax compliance would be affected if the tax payers are “status” seekers. If relative income is a symbol of relative status in a society, status concerned individuals would evade paying taxes more relative to the case where status is not a concern. However, such an outcome would not hold if the symbol of relative status is relative consumption of the “status” good and not relative income. We generalize the scenario by introducing a measure of relative status which depends on both relative income and consumption of the status good. |
| Keywords: | status-seeking behavior, tax evasion, relative income, conspicuous consumption, Inequality |
| JEL: | H26 D31 D91 O15 H21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12193 |
| By: | Ed Cornforth |
| Abstract: | With tax rises likely in the upcoming Autumn Budget, this policy brief argues that the most realistic option is to look at one of the four main taxes: corporation tax, income tax, employee National Insurance Contributions (NICs) or Value Added Tax (VAT). This being the case, the rest of the brief explores the effects on the economy of raising these taxes. Using our Global Macroeconometric Model (NiGEM) this scenario compares different tax options available to the Chancellor at the forthcoming Autumn Budget. We assume that the government aims to raise total net annual revenue by £30 billion by 2029–30, in line with external forecasts of how much the Chancellor needs to raise to meet her current budget fiscal rule (the "stability rule"). The analysis suggests that a rise in the rate of income tax would appear to be the least economically damaging option available to the Chancellor at this time. Although there are risks around raising income tax rates such as a negative effect on labour supply or a larger than expected reduction in aggregate consumption, it is unlikely that, even if these risks came to pass, any other option would be better. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nsr:niesrp:47 |
| By: | Anna D’Annunzio (Tor Vergata University of Rome, CSEF and Toulouse School of Economics.); Antonio Russo (Institut Mines-Telecom Business School.) |
| Abstract: | We study the effects of taxes and fees in markets where sellers practice second-degree price discrimination, offering multiple versions of their product. Sellers distort the quantity (or quality) intended for all types of consumers, except for those with the highest marginal willingness to pay. We show that ad valorem taxes/fees can alleviate this distortion, thereby generating revenue while increasing consumer surplus and welfare, provided the tax rate increases with the size or quality of the version it applies to. We explore the implications of this result for important issues in fiscal policy (taxation of sin goods and of goods affecting labor supply). We also consider applications to the analysis of vertical relations between firms, as well as the strategy of platforms when setting prices for access and when competing with sellers. |
| Keywords: | Commodity taxation, tax incidence, price discrimination, sin goods. |
| JEL: | D4 H21 H22 L1 |
| Date: | 2025–09–26 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:761 |
| By: | António Afonso; M. Carmen Blanco-Arana; Ana J. Cisneros-Ruiz |
| Abstract: | The main aim of this paper is to empirically assess the impact of education and tax revenue on fostering new business creation in the OECD countries. To this end, we employ fixed effects and random effects models using panel data from 2006 to 2022, incorporating alternative conditions. Results confirm that while education and the economic situation are key pillars in fostering new business creation, the role of tax revenue in supporting economic development – and, by extension, new business formation – is fundamental, even if non-linear, with a threshold of 30% of GDP. Tax revenue collected by governments provides essential funding for public goods and services such as infrastructure, education, and innovation support programs, all of which contribute to creating an environment where new businesses can emerge and thrive. Our findings remain robust under the GMM estimation. |
| Keywords: | New Business; Tax Revenue; Education; Economic Growth; Panel Data. |
| JEL: | C23 H2 I2 M20 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03952025 |
| By: | Emanuele Dicarlo; Laurence J. Kotlikoff; Mauro Marè; Marco Olivari |
| Abstract: | This study uses fiscal gap accounting (FGA) and generational accounting (GA) to compare US and Italian fiscal solvency. FGA and GA incorporate all government outlays and receipts, whether put on or kept off the books. FGA measures, in the form of reduced net outlays, the constant share of each future year’s GDP needed to balance the government’s intertemporal budget. GA calculates the lifetime net tax rate – lifetime taxes divided by lifetime labor earnings -- facing future generations if current generations pay nothing more, on net, than current policy mandates. Deficit accounting suggests that Italy’s 135 percent debt-to-GDP ratio places it in worse fiscal shape than the US with its 123 percent ratio. But on a fiscal-gap basis, Italy appears in far better shape regardless of the discount rate used. Based on the theoretically appropriate rate – the average real return to national wealth, the U.S. fiscal gap is 7.4%. Italy’s is 4.0%. These requisite solvency adjustments are far larger if delayed or if the UN’s more pessimistic demographic projections prevail. Neither country can expect future generations, on their own, to cover their government’s red ink. Doing so requires levying lifetime net tax rates, in each country, that exceed 100%. |
| JEL: | H20 H50 H6 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34340 |
| By: | Phanjarat Daengnimvikul; Kanis Saengchote |
| Abstract: | We evaluate the pricing impact of Thailand’s Thai ESG Fund – a tax-incentivized retail program launched in 2023 Q4 – on the corporate bond market, separating primary-market issuance from secondary-market repricing. Using Thai corporate THB bonds issued from 2018 to 2024, we test two hypotheses. At issuance (H1), we compare ESG coupons with observationally similar non-ESG issues via propensity-score matching. The average pairwise coupon spread (ESG minus matched non-ESG) is -29 bps overall, -23 bps pre-policy, and -92 bps post-policy, yielding a post-pre difference of -69 bps (all statistically significant). In the secondary market (H2), we analyze seasoned bonds issued in or before 2023 Q3 and estimate a difference-in-differences regression with bond and quarter fixed effects, supplemented by an event study. The ESG×Post coefficient ranges from +31 to +42 bps, and event-time estimates show flat pre-trends with the ESG spread turning positive from two quarters and building to 49 bps by the fourth quarter. Together, the policy reduces funding costs for new ESG issues while raising required yields on older ESG bonds, consistent with demand concentrating in newly eligible, on-the-run ESG supply and a higher off-the-run liquidity premium. |
| Keywords: | ESG bonds; Tax-incentivized mutual funds; Greenium; Off-the-run premium; Sustainable finance policy |
| JEL: | G12 G18 H25 G23 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:241 |
| By: | Nóra Kungl (The Vienna Institute for International Economic Studies, wiiw); Hana Ross (The Vienna Institute for International Economic Studies, wiiw); George Stefan |
| Abstract: | In August 2025, as part of a large fiscal package, Romania announced an increase in tobacco and alcohol excise taxes, news welcomed by proponents of public health. However, the announcement turned into a disappointment for the tobacco control community when the final increase in cigarette excise tax amounted to only 2.25%. This policy note outlines the reform and uses a simulation model to demonstrate the missed opportunity to adopt pro-health tobacco tax policy. By not implementing a 10% increase, as for other excises, the newly adopted schedule not only fails to reduce smoking prevalence but also deprives Romania of an opportunity to collect RON 1.657bn (EUR 326.6m) in additional tax revenues in 2025-2027. Moreover, an accelerated tax roadmap aligning Romania with the proposed EU Tobacco Taxation Directive by 2027 would raise an additional RON 4.73bn (EUR 932m), reduce smoking prevalence by 4%, and avert nearly 50, 000 smoking-related premature deaths. |
| Keywords: | Excise, Taxation, Tobacco, Smoking |
| JEL: | H24 I18 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:100 |