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on Accounting and Auditing |
| By: | Hirokazu Mizobata (Kyoto University); Masaaki Suzuki (Mizuho Research Institute) |
| Abstract: | This study empirically investigates whether the tax differentials between home and host countries differently affect multinationals' foreign investment and profit shifting decisions under contrasting international tax systems. In particular,we compare these differential tax effects between credit and exemption systems, using firm-level data on selected OECD countries. Based on the presented analysis, we find that tax differentials affect multinationals' foreign investment decisions to a larger degree under the exemption system than under the credit system when a home country's tax rate is larger than that in the host country.By contrast, our results show that the tax effects on profit shifting are similar under both these systems. |
| Keywords: | Corporate taxation, International tax system, Multinational firms |
| JEL: | H25 H87 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:902&r=acc |
| By: | Lars-H. R. Siemers |
| Abstract: | The sales taxes in the EU - and in several other countries - are practiced as value- added tax of the consumption type with invoice method. Literature on microsimulation models (MSM) for this type of VAT is rare, though the importance of VAT has continuously increased. We discuss the issues of VAT-MSM in detail and develop a basic general VAT-MSM, applicable to the EU member states (and beyond). To illustrate the functioning of the general model, we apply it in detail to the specific case of Germany. We provide comprehensive estimation results for the distributional and fiscal effects of the German VAT. Finally, we simulate the effects of a small VAT reform in 2010, comparing static and behavioral response simulations. |
| Keywords: | VAT microsimulation, VAT exemption, RWI-VAT-SIM, EU |
| JEL: | H22 H23 H24 C6 D12 D31 D63 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:167-14&r=acc |
| By: | Marius Brülhart; Sam Bucovetsky; Kurt Schmidheiny |
| Abstract: | Most cities enjoy some autonomy over how they tax their residents, and that autonomy is typically exercised by multiple municipal governments within a given city. In this chapter, we document patterns of city-level taxation across countries, and we review the literature on a number of salient features affecting local tax setting in an urban context. Urban local governments on average raise some ten percent of total tax revenue in OECD countries and around half that share in non-OECD countries. We show that most cities are highly fragmented: urban areas with more than 500,000 inhabitants are divided into 74 local jurisdictions on average. The vast majority of these cities are characterized by a central municipality that strongly dominates the remaining jurisdictions in terms of population. These empirical regularities imply that an analysis of urban taxation needs to take account of three particular features: interdependence among tax-setting authorities (horizontally and vertically), jurisdictional size asymmetries, and the potential for agglomeration economies. We survey the relevant theoretical and empirical literatures, focusing in particular on models of asymmetric tax competition, of taxation and income sorting and of taxation in the presence of agglomeration rents. |
| Keywords: | cities; taxes; tax competition; fiscal federalism; agglomeration; sorting |
| JEL: | H71 H73 R28 R51 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:14.04&r=acc |
| By: | Francesca Gastaldi (Università di Roma, La Sapienza, Italy); Paolo Liberati (Università di Roma Tre, Italy); Elena Pisano (Banca d'Italia, Italy); Simone Tedeschi (Università di Roma, La Sapienza, Italy) |
| Abstract: | International institutions are recommending policies aimed at shift- ing the tax burden from labour and business incomes to less growth- detrimental forms of taxation, such as consumption taxes. However, de- spite the expected positive macroeconomic effects, a criticism about in- creasing the role of Vat arises from its alleged regressivity over income. Yet, the empirical evidence on this issue is very narrow due to the unavail- ability of joint and detailed data on income and consumption. This paper fills this gap by measuring the distributional impact of Vat in Italy using information on both households' expenditures and incomes integrated in a micro simulation model (EGaLiTe). The paper shows that the regressive profile of Vat in terms of disposable income is almost entirely driven by the very bottom and the top quantiles, which however, at least in part, can be affected by temporary unalignments of income and consumption. Fur- thermore, the current Vat structure in Italy is not optimally targeted to distributional aims, and a different allocation of goods among the existing three rates could mitigate the regressive impact of the tax. In addition, unlike the common opinion that reducing the number of Vat rates would compromise distributional outcomes, it is shown that a two-rate Vat could generate a better distributional impact compared to the current arrange- ment. Finally, the paper proposes a methodology to take into account behavioural responses to price changes in order to assess possible day- after repercussions on the aggregate demand for consumption related to alternative simulated reforms. |
| Keywords: | Vat, Redistribution, Tax Incidence |
| JEL: | H22 H23 H25 C15 D12 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipu:wpaper:6&r=acc |
| By: | Verbist, Gerlinde; Figari, Francesco |
| Abstract: | Over the last few years concern for income inequality in European countries has increased remarkably. In this context, taxation is an important redistributive instrument and we investigate the redistributive role of direct taxes. We focus on the EU-15 countries and the evolution over the period 1998-2008, using EUROMOD, the EU-wide tax-benefit model. The research aim of this paper is twofold. First, we investigate empirically whether there is a link between pre-tax income inequality and redistribution through taxes. Second we hereby test whether there is a relationship between progressivity and the average tax level, the two building stones of the redistributive impact of taxes. |
| Date: | 2014–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em6-14&r=acc |
| By: | Garg, Sandya (Indira Gandhi Institute of Development Research); Ashima Goyal (Indira Gandhi Institute of Development ResearchInstitute of Economic Growth); Rupayan Pal (Indira Gandhi Institute of Development Research) |
| Abstract: | Taxation is an important tool to enhance the economic development and to finance the expenditure responsibilities of a government. This paper attempts to measure the tax capacity and tax effort of 14 major Indian states from 1992-92 to 2010-11 using Stochastic Frontier Analysis. The use of tax capacity frontier helps to identify those states which are operating near their tax capacity and states which are away from tax frontier. The results indicate presence of large variation in tax effort index across states and which seems to be increasing over time. Econometric analysis suggests that economic and structural variables have significant impact on the tax capacity. While per-capita gross state domestic product has positive effect on states' own tax revenue, relative size of agriculture sector of a state has adverse effect on its own tax revenue. The evidence on tax efficiency suggests that the higher inter-governmental transfers tend to reduce tax efficiency. Outstanding liabilities and expenditure on debt repayment also indicate adverse effect on tax efficiency, but the adverse effect of the latter is lesser than the former. Enactment of Fiscal Responsibility and Budget Management Act seems to have improved the tax efficiency which has been further strengthened by the better law and order inside states. Higher political competition inside a state, represented by effective number of parties, has favourable effect on the tax efficiency of a state. Implications are drawn for policy. |
| Keywords: | tax capacity, tax effort, stochastic frontier analysis, fiscal federalism |
| JEL: | H21 H29 H71 H77 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2014-032&r=acc |
| By: | Avram, Silvia; Levy, Horacio; Sutherland, Holly |
| Abstract: | The systems of direct taxes and cash benefits in the 27 Member States of the European Union (EU) vary considerably in size and structure. We explore their redistributive effects using EUROMOD, the tax-benefit microsimulation model for the EU. As well as describing redistributive effects in aggregate this allows us to assess and compare the effectiveness of individual types of policy in reducing income disparities. We consider the following categories of benefits and taxes: income taxes, tax allowances, tax credits, social contributions, cash benefits designed to target the poor or redistribute inter-personally (through means-testing) as well as cash benefits intended to redistribute intra-personally across the lifecycle (through social insurance or contingency-based entitlement). We derive results for the 27 members of the European Union using policies in effect in 2010 and present them for each country separately as well as for the EU as a whole. |
| Date: | 2014–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em8-14&r=acc |
| By: | Marisa Agostini |
| Abstract: | The paper analyzes the ways of reporting other comprehensive income (OCI) and their relationships with three different variables, i.e. the volatility, the sign and the total amount of such accounting items. In order to investigate the reasons of such relationships, the study considers the final annual financial statements approved for the accounting periods from 2009 (i.e. the first year in which the 2007 revision of IAS 1 was applied) to 2012 by Italian companies which are required to apply the International Financial Reporting Standards and to follow their updates since 2005. The choice of this specific sample is due to the willingness of verifying the ways of departing from a strong Italian accounting traditional culture which does not consider other comprehensive income (OCI items have never been mentioned by Italian civil code and have not been included in Italian financial reporting). Some preliminary results emphasize the relevance of OCI items. In each accounting period, the majority of the analyzed financial statements show a significant impact of OCI on net income (each amount in absolute value) over a materiality threshold of 10%. In some years also the difference between ROE measured with net income (NI) and ROE measured with comprehensive income (CI) is statistically significant. It demonstrates that the prominence of OCI in evaluating firmsÕ performance potentially should not be ignored. Moreover, the median of changes in OCI is greater than the one of changes in net income, showing that OCI is more volatile than NI. After such preliminary analysis, a logistic analysis has been implemented by considering the above-mentioned variables. Such study brings some important results confirming the significance of the relations between the ways of reporting other comprehensive income and both the sign and the total amount of such accounting items. The analysis has been implemented by using also different versions of the dependent variable in order to investigate the impact of the OCI presentation in two statements which are positioned in two different (i.e. following) pages. So, while the predominance in the use of two statements for OCI presentation shows the willingness to emphasize the traditional profit or loss section and may be related to the influence of a strong Italian accounting traditional culture, the reasons of the use of two different pages for such presentation may represent the signal of Òaccounts managementÓ. |
| Keywords: | Other Comprehensive Income, Financial Statement Presentation, Volatility. |
| JEL: | M41 M42 M48 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:87&r=acc |
| By: | Diewert, Erwin; Fox, Kevin J. |
| Abstract: | The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country. Related service price indexes for the land and structure input components of a commercial property are required in the Production Accounts of the country if the Multifactor Productivity of the Commercial Property Industry is calculated as part of the System of National accounts. The paper reviews existing methods for constructing an overall Commercial Property Price Index (CPPI) and concludes that most methods are biased (due to their neglect of depreciation) and more importantly, not able to provide separate land and structure subindexes. A class of hedonic regression models that is not subject to these problems is discussed. |
| Keywords: | Commercial property price indexes, Net Operating Income, discounted cash flow, System of National Accounts, Balance Sheets, methods of depreciation, l |
| JEL: | C2 C23 C43 D12 E31 R21 |
| Date: | 2014–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:bricol:erwin_diewert-2014-40&r=acc |
| By: | Chang, C-L.; McAleer, M.J. |
| Abstract: | __Abstract__ The paper is concerned with ranking academic journal quality and research impact in Finance, based on the widely-used Thomson Reuters ISI (2013) Web of Science citations database (hereafter ISI). The paper analyses the 89 leading international journals in the ISI category of “Business – Finance” using quantifiable Research Assessment Measures (RAMs). The analysis highlights the similarities and differences in various RAMs, all of which are based on alternative transformations of journal citations and impact. Alternative RAMs may be calculated annually or updated daily to determine the citations frequency of published papers that are cited in journals listed in ISI. The RAMs include the classic 2-year impact factor including journal self citations (2YIF), 2-year impact factor excluding journal self citations (2YIF*), 5-year impact factor including journal self citations (5YIF), Immediacy including journal self citations, Eigenfactor (or Journal Influence), Article Influence, h-index, PI-BETA (Papers Ignored - By Even The Authors), Self-citation Threshold Approval Rating (STAR), 5YD2 (namely, 5YIF divided by 2YIF), Escalating Self Citations (ESC), and ICQ (Index of Citation Quality). The paper calculates the harmonic mean of the ranks of up to 16 RAMs. It is shown that emphasizing 2YIF to the exclusion of other informative RAMs can lead to a misleading evaluation of journal quality and impact relative to the harmonic mean of the ranks. The analysis of the 89 ISI journals in Finance makes it clear that there are three leading journals in Finance, namely Journal of Finance, Journal of Financial Economics and Review of Financial Studies, which form an exclusive club in terms of the RAMs that measure journal quality and impact based on alternative measures of journal citations. The next two journals in Finance in terms of overall quality and impact are Journal of Accounting and Economics and Journal of Monetary Economics. |
| Keywords: | Research assessment measures, Impact factor, IFI, C3PO, PI-BETA, STAR, Eigenfactor, Article Influence, h-index, 5YD2, ICQ, ESC, harmonic mean of the ranks, finance, journal rankings |
| JEL: | C10 C81 Y10 |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureir:51744&r=acc |
| By: | Enrique Moral-Benito (Banco de España); Oliver Roehn (OECD and CESIFO) |
| Abstract: | Global imbalances and financial market (de)regulation both feature prominently among the potential causes of the global financial crisis, but they have been generally discussed separately. In this paper, we take a different angle and investigate the relationship between financial market regulation and current account balances, an area for which there is limited empirical evidence. We use a panel of countries over the period 1980-2010 and employ a novel empirical approach which allows us to simultaneously account for model uncertainty, current account persistence and unobserved heterogeneity. We find robust evidence that financial market regulations affect current account balances and that different aspects of these regulations can have opposing effects on the current account. In particular we find that lowering bank entry barriers is negatively associated with the current account balance. In contrast, bank privatisation and securities market deregulation tend to raise current account balances. Our results also highlight the need to control for persistence and unobserved heterogeneity. Once we control for these factors, we find robust evidence for a wide range of current account theories in contrast to previous studies. |
| Keywords: | current account, financial markets, financial regulation, Bayesian model averaging, model uncertainty |
| JEL: | C11 F32 F41 G28 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1424&r=acc |