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on Accounting and Auditing |
| By: | Pia Rattenhuber |
| Abstract: | Empirical evidence so far found ambiguous results for the direction of effect of marginal income tax rates on employee remuneration. Based on the GSOEP data from 2002 through 2008 this study analyzes the impact of the marginal tax load on the employee side on the wage rate also allowing average tax rates and employer payroll taxes to play a role. Instrumental variable estimation based on counterfactual tax rates simulated in a highly detailed microsimulation model (STSM) heals the endogeneity problem of the tax variables with regard to wages. Estimations in first differences show that marginal taxes overall have a negative impact on wages. But this effect is not uniform along the wage distribution; while the negative effect of marginal tax rates prevails in the lower part of the distribution, observations beyond the median benefit from higher tax rates at the margin. |
| Keywords: | Marginal tax rates, tax structure, simulated instrumental variables |
| JEL: | H22 H24 C26 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1193&r=acc |
| By: | Julien Daubanes; Pierre Lasserre |
| Abstract: | Optimum commodity taxation theory asks how to raise a given amount of tax revenue while minimizing distortions. We reexamine Ramsey's inverse elasticity rule in presence of Hotelling-type non-renewable natural resources. Under standard assumptions borrowed from the non-renewable-resource-extraction and from the optimum-commodity-taxation literatures, a non-renewable resource should be taxed in priority whatever its demand elasticity and whatever the demand elasticity of regular commodities. It should also be taxed at a higher rate than other commodities having the same demand elasticity and, while the tax on regular commodities should be constant, the resource tax should vary over time. When the generation of reserves by exploration is determined by the net-of-tax rents derived during the extraction phase, reserves become a conventional form of capital and royalties tax its income; our results contradict Chamley's conclusion that capital should not be taxed at all in the very long run. When the economy is autarkic, in the absence of any subsidy to reserve discoveries, the optimal tax rate on extraction obeys an inverse elasticity rule almost identical to that of a commodity whose supply is perfectly elastic. As a matter of fact, there is a continuum of optimal combinations of reserve subsidies and extraction taxes, irrespective of whether taxes are applied on consumption or on production. When the government cannot commit, extraction rents are completely expropriated and subsidies are maximum. In general the optimum Ramsey tax not only causes a distortion of the extraction path, as happens when reserves are given, but also distorts the level of reserves developed for extraction. When that distortion is the sole effect of the tax, it is determined by a rule reminiscent of the inverse elasticity rule applying to elastically-supplied commodities. In an open economy, Ramsey taxes further acquire an optimum-tariff dimension, capturing foreign resource rents. For countries that import the resource, the result that domestic resource consumption is to be taxed at a higher rate than conventional commodities having the same demand elasticity emerges reinforced. <P> |
| Keywords: | Optimum commodity taxation, inverse elasticity rule, non-renewable resources, hotelling resource, supply elasticity, demand elasticity, capital income taxation, |
| JEL: | Q31 Q38 H21 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-04&r=acc |
| By: | Rünger, Silke |
| Abstract: | Germany's repeal of the corporate capital gains tax for the disposal of domestic holdings was expected to substantially change the system of corporate network holdings and corporate control. Based on a general divestiture model, we show that the probability of a disposal increased after the tax reform. Using a unique data set with no need to proxy for the disposal of corporate equity holdings, we analyze 354 German minority holdings over the period 1999-2007. We find significant higher disposal rates for 2002, the year the reform became effective. Further analyses reveal that this effect can be attributed to non-listed parent companies outside the financial sector, i.e. companies mainly ignored in prior research. Thus, our results also help to explain why prior research using event studies failed to detect a widespread market reaction of German firms. -- |
| Keywords: | corporate capital gains,lock-in effect,corporate equity holdings,Germany |
| JEL: | G11 G34 H25 H32 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:126&r=acc |
| By: | Giampaolo Arachi (Deparment of Economics and Mathematical Statistics, University of Salento); Valeria Bucci (Deparment of Economics and Mathematical Statistics, University of Salento); Ernesto Longobardi (Department of Economics and Quantitative Methods, University of Bari); Paolo Panteghini (Department of Economics, University of Brescia); Maria Laura Parisi (Department of Economics, University of Brescia); Simone Pellegrino (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Alberto Zanardi (Department of Economics, University of Bologna) |
| Abstract: | In this paper we aim to discuss the strengths and weaknesses of the fiscal consolidation package adopted recently by the Italian Government in order to achieve a balanced budget by 2013. Revenues are forecasted to increase by more than 3.3 GDP percentage points; these stem mostly from indirect and property taxation. The analysis of the Italian case is interesting since it seems to be consistent with a recent strand of the literature which, in order to foster both short and long-term economic growth, advocated a shift of the tax burden from capital and labour income to consumption and property. Through a set of micro simulation models, this paper evaluates the effects of the Italian fiscal package on households and firms. We show that, in respect of households’ income, indirect and property tax reforms are highly regressive, whilst the reform makes limited resources available for growth enhancing policies (reduction in the effective corporate tax burden). Then, we propose an alternative fiscal package. We show that a less regressive reform on households can be obtained by shifting taxation from personal and corporate income tax to indirect taxation. Our proposal allows the tax burden on firms to be reduced substantially and, in the meantime, offers lower personal income tax rates on households in the lowest deciles of income distribution since they are penalized most by the increase in indirect taxation. |
| Keywords: | Tax reforms, Fiscal consolidation, Micro simulation models, Italy |
| JEL: | H2 D22 D31 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:tur:wpapnw:2&r=acc |
| By: | Dolls, M.; Fuest, C.; Andreas Peichl (Institute for the Study of Labor (IZA)) |
| Abstract: | This paper investigates to what extent the tax and transfer systems in Europe protect households at different income levels against losses in current income caused by economic downturns like the present financial crisis. We use a multi country micro simulation model to analyse how shocks on market income and employment are mitigated by taxes and transfers. We find that the aggregate redistributive effect of the tax and transfer systems increases in response to the shocks. But the extent to which households are protected differs across income levels and countries. In particular, there is little stabilization of disposable income for low income groups in Eastern and Southern European countries. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:aia:ginidp:dp23&r=acc |
| By: | Matthias Stöckl; Hannes Winner (WIFO) |
| Abstract: | This paper analyses the impact of corporate taxation on a firm's debt policy. We contribute to the existing literature in two ways: 1. we incorporate firm heterogeneity with respect to firm size and legal form, 2. we explicitly model persistence in the debt-to-asset ratio. Econometrically this implies the use of dynamic panel data econometrics. We employ a panel of about 110,000 firms from 22 EU countries between 1999 and 2007. In line with theoretical expectations, we find that the debt ratio is positively affected by the statutory corporate income tax rate. Additionally, we find that capital structures exhibit a substantial degree of persistence over time. Finally, our empirical results show that large firms react more sensitively to the incentives of corporate taxation, while this effect is considerably smaller for stock companies. |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2012:i:422&r=acc |