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on Accounting and Auditing |
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Issue of 2016‒11‒06
five papers chosen by |
| By: | Conor Clarke; Wojciech Kopczuk |
| Abstract: | In theory, the U.S. tax system aims to attribute and tax all business income to individuals. But the tax treatment of this income varies. Pass-through income is taxed when earned; capital-gains income is taxed when realized; dividends when distributed; other forms of business income may escape taxation entirely. Business owners often have control over the timing and character of their income: They can often choose, for example, between reporting business income or deducting it as wages or fringe benefits. And laws change, changing the incentive and ability to shift income between the individual and corporate sectors. We integrate a wide variety of tax data to document the large long-run changes in the structure of business income and business taxation in the United States. These changes include the degree to which business incomes are taxed on a realization versus an accrual basis, the extent to which taxation is deferred, and the share of business income that is ultimately subject to taxation. We highlight the evolving relevance of retained earnings in the changing corporate sector and their relationship to equity values and unrealized capital gains. We also document the evolution of individual income components — profits of pass-through entities, dividends, and capital gains (both taxable gains and those escaping taxation through step-up). As a result of these changes, business incomes are increasingly taxed through personal income taxes instead of a combination of corporate and personal taxes. In particular, this implies that the observability of business incomes on personal income tax returns has improved over time, a fact that has implications for measuring and understanding the income distribution. |
| JEL: | D31 H25 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22778&r=acc |
| By: | Barrios, Salvador (Asian Development Bank Institute); Martínez–López, Diego (Asian Development Bank Institute) |
| Abstract: | Examining the cases of Canada, Germany, and Spain, the role played by fiscal equalization schemes in determining subnational borrowing was analyzed, and the link between regional governments’ primary fiscal balances and gross domestic product per capita was tested econometrically. The study results show that either poor or rich regions can display higher regional public borrowing on average, and these results can be linked to the institutional design of regional equalization systems in place. Particular elements, such as tax efforts and fiscal capacities, also play relevant roles in this regard. Reforms of these schemes can therefore prove instrumental in reducing regional heterogeneity in public borrowing. |
| Keywords: | Fiscal equalization schemes; government borrowing; public borrowing; subnational borrowing; fiscal capacity; Canada; Germany; Spain; 公共借入金; 政府借入金; 財政能力 |
| JEL: | H70 R50 |
| Date: | 2016–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0595&r=acc |
| By: | Michael Rolfes; Alex "Sandy" Pentland |
| Abstract: | Corporate venture capital is in the midst of a renaissance. The end of 2015 marked all-time highs both in the number of corporate firms participating in VC deals and in the amount of capital being deployed by corporate VCs. This paper explores, rather than defines, how these firms find success in the wake of this sudden influx of corporate investors. A series of interviews was conducted in order to capture the direct and indirect objectives, philosophies, and modes of operation within some of these corporate VC organizations. During the course of this exploration, numerous operational coherency issues were discovered. Many firms were implicitly incentivizing conflicting and inconsistent behavior among their investment team. Perhaps most surprising, the worst offenders were the more mature corporate VCs who have been in the game for some time. As will be discussed, fundamental evidence suggests that this misalignment is due to lack of attention and commitment at the executive level as corporate strategy evolves. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1611.00970&r=acc |
| By: | Mehmet Buyukkara; Ayse Karasoy; Muhammed Islami Onal |
| Abstract: | [EN] After the global financial crisis, a new resolution tool, bail-in is introduced by the Financial Stability Board (FSB) to manage the orderly resolution of failing financial institutions. Bail-in is a framework that creditors and shareholders bear the cost of resolution and taxpayers are not exposed to loss. In this article, we analyze the Turkish bail-out and assess the bail-in capacity of the Turkish banking sector considering the public cost caused by 2000-2001 crises as a base scenario. We conclude that bail-inable instruments compared to total liabilities have increased since the beginning of 2000s and they would be enough to protect taxpayers from loss if a similar size of public cost occurs as in 2000-2001 crises. In addition, the scope for the bail-in and the assessment of the resolution authority for the inclusion and exclusion of instruments will also have an effect on the loss absorption capacity of Turkish banks. [TR] Kuresel finansal krizden sonra finansal kuruluslarin sistemli bir sekilde cozumlemeye tabi tutulabilmesi icin Finansal Istikrar Kurulu (FSB) tarafindan yeni bir cozumleme araci olarak icsel cozumleme (bail-in) ortaya konmustur. Icsel cozumlemenin amaci cozumlemede ortaya cikan zararin borc verenler ve hissedarlar tarafindan paylasilmasidir. Bu calismada 2000-2001 krizinin maliyetleri dikkate alinarak ulkemiz bankacilik sektorunun icsel cozumleme kapasitesi incelenmistir. Krizden itibaren icsel cozumleme kapsaminda kullanilabilecek araclarin arttigi ve benzer buyuklukte bir kriz olmasi durumunda bankacilik yukumluluklerinin cozumleme maliyetlerini karsilamada yeterli olabilecegi sonucuna varilmistir. Buna ek olarak, cozumleme otoritesinin icsel cozumleme cercevesine dahil edilecek ve cercevenin disinda birakilacak araclara iliskin degerlendirmesi de bankacilik sektorunun zarar karsilama kapasitesine etkide bulunacaktir. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:econot:1624&r=acc |
| By: | Tetsuji Okazaki |
| Abstract: | This paper selectively surveys the literature on the financial history of prewar Japan, focusing on the role of banks in industrial and corporate financing and the characteristics of the industrial organization in the banking sector, and adds some supplementary analyses. The banking sector in prewar Japan is characterized by the multilayered structure and the close relationship between banks and non-financial firms, called organ bank relationship. Whereas the organ bank relationship enabled related firms with lower profitability and smaller internal fund to borrow money more easily, it tended to hurt the profitability of banks and stability of the banking system. In the 1920s, when the banking system became unstable, a large wave of bank exits through mergers and closures occurred. Over this exit wave, the organ bank relationship waned through selection of unsound banks and change in the governance structure of banks. Meanwhile, this bank exit wave changed the fund allocation in local financial markets, which in turn affected the local industries. |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:cnn:wpaper:16-002j&r=acc |