nep-pub New Economics Papers
on Public Finance
Issue of 2024‒07‒08
five papers chosen by

  1. A Comprehensive Analysis of Production Efficiency: A Tax Reform Perspective By Laurence Jacquet; Etienne Lehmann
  2. Growth-Friendly Taxation in a High-Inflation Environment By Áron Kiss; Alexander Leodolter; Alessandro Turrini; István Ványolós
  3. A Comprehensive Analysis of Production Efficiency: A Tax Reform Perspective By Laurence Jacquet; Etienne Lehmann
  4. How Do Firms Respond to Risk-based Tax Audits? By Harju, Jarkko; Kotakorpi, Kaisa; Matikka, Tuomas; Nivala, Annika
  5. Gender Differences in Tax Evasion: Evidence from Norwegian Administrative Data By Bjørkheim, Julie Brun; Nygård, Odd E.

  1. By: Laurence Jacquet; Etienne Lehmann
    Abstract: Policies that impact the production sector, such as intermediate goods taxation (e.g. taxing robots) and trade liberalization create winners and losers. When do we need to integrate pre-distribution concerns in the design of these production policies? Should we consider the endogenous changes of factor prices in tax formulas? We show that the answers to these two questions depend only on the features of the income tax system. More precisely, can the tax system distinguish incomes from each factor of production? Can it be reformed along the so-called “GE-replicating directions”, reproducing the impact of factor price adjustments on taxpayers’ utility? If the answer to either question, or both, is “no”, the design of production policies should also take into account its pre-distributive role and all formulas reveal novel, empirically implementable “GE multipliers”. These multipliers shape tax systems to correct for market failures as well as for the effects of price adjustments. In contrast, if the answer to both questions is “yes”, it is Pareto-improving to design production policies solely to enlarge production possibilities and the “GE multipliers” shape the income tax system only to account for market failures. We illustrate these insights with realistic tax systems and practical examples of production policies.
    Keywords: production efficiency, nonlinear income taxation, several income sources, endogenous prices
    JEL: H21 H22 H23 H24 L50 F13
    Date: 2024
  2. By: Áron Kiss; Alexander Leodolter; Alessandro Turrini; István Ványolós
    Abstract: Recent EU country-specific recommendations to make taxation more growth-friendly have advocated a stronger use of recurrent taxes on immovable property and a shift of the tax burden from labour income, including a reduction of the labour tax burden of low-income taxpayers. This Brief focuses on challenges related to these two types of tax reforms during periods of high inflation. The challenges linked to immovable property taxation include the update of the property values as well as issues relating to liquidity problems for households with property but relatively low income. Regarding reforms aimed at reducing the labour tax burden on low-income taxpayers, their impact may be challenged by the so-called bracket creep (or fiscal drag) phenomenon, i.e., the shift of taxpayers into higher tax brackets due to an increase of nominal incomes. The present paper highlights the relevance of these issues on the basis of recent empirical evidence and discusses current practices and possible solutions.
    Keywords: tax, taxation, tax policy, inflation, immovable property, housing, property value, cadastral value, property valuation, asset-rich cash-poor, liquidity, personal income tax, bracket creep, fiscal drag, indexation
    JEL: D1 H2 H21 H24 H3 H31
    Date: 2024–03
  3. By: Laurence Jacquet; Etienne Lehmann
    Date: 2024
  4. By: Harju, Jarkko; Kotakorpi, Kaisa; Matikka, Tuomas; Nivala, Annika
    Abstract: The abstract will be added on Tue 4.6.2024.
    Keywords: tax compliance, tax evasion, tax enforcement, firm behavior, Social security, taxation and inequality, H26, H32, H83, fi=Verotus|sv=Beskattning|en=Taxation|,
    Date: 2024
  5. By: Bjørkheim, Julie Brun (Dept. of Business and Management Science, Norwegian School of Economics); Nygård, Odd E. (Research Dept., Statistics Norway)
    Abstract: Using the expenditure approach and administrative data on third-party reported donations, we estimate tax evasion by gender. While men are more prone to risk taking, we find no evidence of this transferring to income underreporting among the self-employed in Norway. Instead, self-employed women evade more than men. This tendency holds when controlling for sector affiliation and using household fixed effects and event study equivalents. We find that self-employed women face lower chances of penalty taxes and lighter penalties when caught, possibly due to biased predictive models, which may explain their higher evasion rates.
    Keywords: Tax Evasion and Avoidance; Gender; Tax Enforcement; Charity
    JEL: H25 H26 J16
    Date: 2024–06–18

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