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on Public Finance |
| By: | Mounir Atlassi (University Mohamed V, Rabat); Mohamed Karim (University Mohamed V, Rabat); Ilham Dkhissi (BEAR Lab - RBS - UIR - BEAR Lab - Rabat Business School - International University of Rabat) |
| Abstract: | This paper examines the dynamics of tax revenues and fiscal structure in Morocco over the period 2000-2024, with a particular focus on the temporal behavior of major tax components and their adjustment to revenue fluctuations. Building on the literature on fiscal dynamics in emerging economies, the study emphasizes the role of tax composition in shaping revenue stability. The empirical analysis relies on autoregressive integrated moving average (ARIMA) models. Unit root tests are first conducted to determine the stochastic properties of the series, followed by model identification, estimation, and diagnostic validation. The results indicate that all tax series are integrated of order one, suggesting persistent shocks and long-lasting effects. The findings also reveal heterogeneous dynamic patterns across tax instruments: personal income tax is sensitive to short-term fluctuations, corporate income tax exhibits dynamics consistent with a highly cyclical tax base, while value added tax displays greater stability due to its broader base. These results highlight the central role of fiscal structure in shaping revenue resilience. The paper contributes to the literature by showing that fiscal performance depends not only on the level of taxation, but also on the stochastic behavior and dynamic properties of its components. |
| Keywords: | revenue volatility, fiscal shocks, tax composition, cyclical dynamics, fiscal resilience, fiscal resilience cyclical dynamics revenue volatility fiscal shocks tax composition C22 H21 H23 E62 |
| Date: | 2026–05–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05637487 |
| By: | Blaufus, Kay; Dräger, Lena; Milde, Michael; Schneider, Judith C. |
| Abstract: | The wealth effects of inflation and taxes on long-term savings, such as retirement investments, can be substantial. Nonetheless, individuals misperceive the impact of both taxes and inflation. Based on a unified theoretical framework, we distinguish between potential cognitive mechanisms underlying tax and inflation misperceptions and derive their implications for investment behavior. Using an incentivized, pre-registered online experiment, we test how these misperceptions influence individual investment decisions. In our baseline setting, inflation and taxation affect investment outcomes equivalently in real or after-tax terms. The results show that-even though all participants were informed about the effects of inflation and taxes on investment returns-investment distortions remain significant in both settings. Distortions driven by money illusion clearly exceed those caused by tax illusion. We find that both rational inattention and anchoring contribute to these distortions, with anchoring appearing more persistent in the inflation setting. Money illusion is therefore not only larger than tax illusion but also harder to undo. Money and tax illusion become more pronounced when future tax and inflation rates are uncertain. We then test the effectiveness of different communication strategies in this setting. Additional tabular information, visualizations, and attention nudges do not systematically reduce money or tax illusion. We show that requiring participants to view real or after-tax consequences before decision making is the most effective intervention; voluntary access has weaker effects, and later display does not systematically reduce the distortions |
| Keywords: | Money Illusion, Tax Illusion, Inflation Aversion, Tax Aversion, Visual Salience, Rational Inattention, Nominal Anchoring, Long-term Investments |
| JEL: | E31 G40 G51 H2 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:han:dpaper:dp-750 |
| By: | Mireille Chiroleu-Assouline; Xavier Koch |
| Abstract: | We study how a committed emission tax shapes the adoption of successively cleaner technologies that arrive over time under uncertainty. Environmental policy increasingly relies on carbon prices that are set in advance and held fixed while such technologies emerge, and we show that this very commitment can lock firms into an inferior technology. In a two-period model, technologies differ only in their fixed adoption cost and emission rate; a regulator commits to a uniform tax and firms choose whether and when to adopt. Under monopoly with perfect foresight, the regulator can induce adoption of the cleanest technology but is sometimes better off not doing so, when its environmental gain falls short of the adoption cost. Under imperfect information the commitment cuts both ways: under-estimating the likelihood of the cleanest technology sets the tax too low, so the firm waits and stalls on its initial technology, whereas over-estimating it sets the tax so high that adoption is blocked altogether. The misperception distorts only the first-period adoption margin, over a benefit–cost band whose width scales with the size of the error. Competition sharpens the trade-off. With symmetric firms a strictly higher tax is needed to trigger adoption, so competition unambiguously raises the cost of inducing a green transition - even though the welfare ranking of monopoly and duopoly remains ambiguous. When one firm enjoys an adoption-cost advantage, it eases adoption for its rival and relaxes the regulator’s problem, pointing to a role for targeted first-adopter support alongside the tax. |
| Keywords: | technology adoption, environmental regulation, commitment, path dependency, emission taxes, monopoly, Cournot duopoly, uncertainty |
| JEL: | D42 H23 O33 Q55 Q58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12807 |
| By: | Zohal Hessami; Maximilian Thomas; Georg U. Thunecke |
| Abstract: | This paper estimates the short- and medium-term causal effects of austerity on local fiscal, economic, and political outcomes. We study a 2013 austerity program in Hesse, Germany, coding 2, 900 consolidation measures across 86 municipalities and comparing them with 4, 630 untreated municipalities using synthetic difference- in-differences. Austerity improves fiscal outcomes through tax increases and spending cuts, but at sizable economic cost: treated municipalities experience slower firm growth, lower salaries, and lower employment. Tax-based adjustment erodes the business tax base and employment, implying higher efficiency costs than expenditure-based consolidation. Political costs arise mainly when consolidation relies heavily on one fiscal instrument. |
| Keywords: | austerity, tax hikes, expenditure cuts, local public finances, consolidation strategies |
| JEL: | H39 H72 H81 R51 |
| Date: | 2026–05–18 |
| URL: | https://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2026-04 |
| By: | Sandra Valentina Lizarazo |
| Abstract: | Canada’s innovation performance has been strong but shows limited upward momentum despite generous research and development (R&D) subsidies. This paper develops an endogenous innovation, multisector, heterogeneous-agent model calibrated to the Canadian economy to evaluate fiscal policies that promote innovation and growth. The impact of R&D subsidies depends critically on the supply of high-skilled labor. When the supply of scientists is inelastic, subsidies raise research wages, crowd out private R&D, and can reduce long-run growth. When labor supply is more elastic, subsidies generate substantial gains in innovation and output. The analysis also compares alternative policy instruments. Investment tax reductions and education spending foster innovation through capital deepening and an expanded supply of highskilled labor, delivering more robust gains when talent constraints bind, while personal income tax changes have more limited effects. R&D subsidies also increase inequality by disproportionately benefiting high-skilled workers, although these effects are mitigated when labor supply responds. Overall, effective innovation policy requires combining R&D incentives with policies that expand human capital and reduce distortions to investment. |
| Keywords: | Innovation; Human Capital; Taxation; Heterogeneous Agents; Multi-Sector Economy; Spillovers; IMF working papers; innovation policy; R&D subsidy; research wage; policy instrument; Labor supply; Income; Wages |
| Date: | 2026–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/116 |
| By: | Jason Nassios |
| Abstract: | Australia is one of the world's largest exporters of liquefied natural gas (LNG), which is natural gas cooled into liquid form for transport and export. Yet Petroleum Resource Rent Tax (PRRT) collections remain modest relative to LNG production and export revenues. This paper argues that low PRRT revenues are primarily structural, reflecting incompatibilities between the design of the tax and the economics of modern LNG projects. Two mechanisms are central. First, tax base measurement: gas transfer prices used to value upstream sales are not publicly observed, introducing uncertainty about how LNG-related rents are reflected in the tax base. Second, intertemporal deferral: large upfront capital expenditures generate carried-forward deductions that are uplifted over time, delaying the recognition of taxable rents. As a result, PRRT liabilies are confined to a narrow upstream base and deferred over the life of projects. Despite strong underlying profitability, observed PRRT revenues remain limited. Given this, incremental reforms such as increasing the statutory tax rate, are unlikely to materially improve rent capture, because the underlying tax base is constrained. More substantive gains are likely to arise from reforms that broaden or more accurately define the tax base. Capturing a larger share of LNG-related rents will require fiscal instruments that more directly target observable project values, or better align taxation with the full LNG value chain. |
| Keywords: | Petroleum Resource Rent Tax, Resource rent taxation, Uplift, Deductions |
| JEL: | H21 H25 Q38 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:cop:wpaper:g-372 |