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on Accounting and Auditing |
| By: | Ronald B Davies (University College Dublin) |
| Abstract: | The common consolidated corporate tax base has been suggested as a way to curb tax avoidance by allocating profits across borders via a formula. This paper demonstrates that when transfer pricing occurs both for tariff and tax minimization, that moving from separate accounting to formula apportionment can actually increase transfer pricing. This, combined with arm's length pricing regulations, can result in lower revenues for high-tax countries and lower overall revenues. This casts additional doubt over whether such a move would have its intended, revenue-enhancing effects. |
| Keywords: | Common Consolidated Corporate Tax Base; Vertical FDI; Formula Apportionment; Transfer Pricing |
| JEL: | F24 F36 H25 H87 |
| Date: | 2013–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201314&r=acc |
| By: | Metin M. Cosgel (University of Connecticut) |
| Abstract: | An expanding state has to decide how to tax the newly conquered lands, most likely taxed under a different regime. It can either preserve the prevailing system of taxation or change it to conform to its own system. The choice depends on the relative efficiency of the two systems, political constraints, and the political legitimacy of the ruler (formulated here as his ability to collect the tax revenue). This paper examines the problem of how an expanding state would establish a fiscal regime by focusing on the tax system of the Ottoman Empire during its expansion between the fourteenth and sixteenth centuries. After outlining the general structure of the Ottoman system of taxation, it develops a simple theoretical framework to analyze the political economy of an expanding state's choice of a fiscal regime, applies this framework to the Ottoman Empire, and analyzes the interaction between tax rates and bases in a more specific context, namely the system of discriminatory taxation that the Ottomans inherited in the Fertile Crescent. |
| Keywords: | fiscal regime, taxation, conquest, state, political economy, religion, legitimacy, loyalty, constraints, power |
| JEL: | D8 H2 J4 L3 M5 N4 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2013-28&r=acc |
| By: | David Madden (University College Dublin) |
| Abstract: | To combat growing levels of obesity, health related taxes have been suggested with taxes on foods high in fat or sugar. Such taxes have been criticised on the basis of their regressivity and potentially adverse impact upon poverty. This paper analyses the effect of such taxes on a range of poverty measures and also examines the effect of a revenue-neutral tax subsidy mix with a tax on unhealthy food combined with a subsidy on more healthy food. Using Irish expenditure data, the results indicate that taxes on high fat/sugar goods on their own will be regressive but that a tax-subsidy combination can be broadly neutral with respect to poverty. |
| Keywords: | Poverty efficiency;consumption dominance |
| Date: | 2013–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201303&r=acc |
| By: | Özgür Bor (Atýlým University, Turkey); Mustafa Ýsmihan (Atýlým University, Turkey) |
| Abstract: | This study analyzes the role of tax policy in gasoline prices in Turkey by utilizing time series techniques. It provides and compares empirical results by using daily gasoline prices between January 2005 and July 2012, with and without the effect of taxation. Our results, based on the standard asymmetric error-correction model, indicate no evidence of asymmetry in retail gasoline prices, which implies that the government does not benefit from the adjustment of gasoline prices through taxation. However, one can miss the big picture in gasoline pricing by concentrating only on the short term price adjustment dynamics via error-correction models. Therefore, we analyzed the long-run relationships between crude oil and gasoline prices with and without taxes. The results indicate that Turkish government succeeded at implicitly imposing an exceptionally high tax burden on gasoline (about 70%) over the longer term by adjusting non-salient excise tax amounts on gasoline and benefited from the resultant tax revenues as means of public finance. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2013/7&r=acc |
| By: | Brancati, Emanuele |
| Abstract: | Financial frictions may represent a severe obstacle to firms' innovativeness. This paper shows the existence and quantifies the effects of financial barriers to the innovation propensity of Italian companies. Employing direct measures of financial constraints and a credit-score estimated ad hoc, I find firms that suffer from financial problems to have a probability of innovating that is significantly lower than sound companies (-30%). The paper also documents the existence of a feedback-effect of innovation on firms' financial position. Results suggest that the innovative propensity of a company is further affected by the consequences that the choice to innovate has on the likelihood of facing constraints. This in turn is reflected onto a stronger depressive effect of financial constraints on innovation (-34%). Finally, the paper also provides evidence on the role of soft information in mitigating financial obstacles for innovative companies. Relationship lending is found to improve the financial condition of more opaque (small) borrowers and to reduce the overall effect of financial constraints on innovation. |
| Keywords: | Innovation; financial constraints; relationship lending; ratings |
| JEL: | G21 L25 O31 |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50329&r=acc |
| By: | Jamel Saadaoui |
| Abstract: | We investigate if capital account openness has played a major role in the evolution of global imbalances on the period 1980-2003. We estimate, with panel regression techniques, the impact of capital account openness on mediumterm current account imbalances for industrialized and emerging countries by using a de jure measure of capital account openness (the ChinnIto index of capital account openness, 2002, 2006) and a de facto measure of capital account openness (the gross foreign assets measured as the sum of foreign assets and foreign liabilities). By increasing the opportunities of overseas investments, the relative capital account openness has had positive impact on mediumterm current account balances of industrialized countries (because of downward pressures on domestic investment rates). Conversely, the relative capital account openness has had negative impact on mediumterm current account balances of emerging countries (because of upward pressures on domestic investment rates). Nowadays, current account imbalances are larger in reason of higher capital mobility. Nevertheless, a large part of imbalances may be considered as unrelated with the evolution of macroeconomic fundamentals. |
| Keywords: | Global Imbalances, Capital Account Openness, Panel Data. |
| JEL: | C23 F31 F41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2013-15&r=acc |
| By: | Carlsson, Magnus (Linnaeus University); Fumarco, Luca (Linnaeus University); Rooth, Dan-Olof (Linnaeus University) |
| Abstract: | The advocates of correspondence testing (CT) argue that it provide the most clear and convincing evidence of discrimination. The common view is that the standard CT can identify what is typically defined as discrimination in a legal sense – what we label total discrimination in the current study –, although it cannot separate between preferences and statistical discrimination. However, Heckman and Siegelman (1993) convincingly show that audit and correspondence studies can obtain biased estimates of total discrimination – in any direction – if employers evaluate applications according to some threshold level of productivity. This issue has essentially been ignored in the empirical literature on CT experiments until the appearance of the methodology proposed by Neumark (2012). He shows that with the right data and an identifying assumption, with testable predictions, this method can identify total discrimination. In the current paper we use this new method to reexamine a number of already published correspondence studies to investigate if their estimate of total discrimination is affected by group differences in variances of unobservable characteristics. We also aim at improving the general understanding of to what extent the standardization level of job applications is an issue in empirical work. We find that the standardization level of the job applications being set by the experimenter appear to be a general issue in correspondence studies which must be taken seriously. |
| Keywords: | correspondence studies, discrimination |
| JEL: | J71 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7619&r=acc |