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on Informal and Underground Economics |
| By: | Florian Scheuer; Joel Slemrod |
| Abstract: | This paper addresses the modern optimal tax progressivity literature, which clarifies the key role of the behavioral response to taxation and accounts for the incomes of the superrich being qualitatively different than others. Some may be “superstars,” for whom small differences in talent are magnified into much larger earnings differences, while others may work in winner-take-all markets, such that their effort to climb the ladder of success reduces the returns to others. We stress that pivotal tax-rate elasticities are not structural parameters, and will be smaller the broader and less plastic is the tax base and the more effective is the enforcement of tax evasion. For this reason, normative analysis of tax rates should be accompanied by attention to the tax base, with a special focus on capital gains, which comprise a large fraction of the taxable income of the superrich. |
| Keywords: | Superrich, tax systems, superstars, winner-take-all markets, plasticity of taxable income, wealth taxes |
| JEL: | H2 H21 H26 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:337&r=all |
| By: | Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Antoine Malezieux (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Jason Shogren (UW - University of Wyoming) |
| Date: | 2019–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02159905&r=all |
| By: | Maxim Ananyev (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne) |
| Abstract: | Multinational firms often shift their incomes to low-tax jurisdictions, thus robbing host states of tax revenue. I offer a new theory to explain why some firms do this while others do not. I argue that firms that are more vulnerable to government expropriation are, counterintuitively, less likely to shift income offshore, since complying fully with tax law gives the government a greater stake in their survival. Analyzing a registry-based panel data on multinational firms, their tax burdens, and a cross-sectional information of the firms’ connections to tax havens, l find that, other things equal, firms with more concentrated fixed assets are less likely to use havens. These results challenge existing theories of the political economy of development. Whereas the “Pillars of Prosperity” theory suggests that successful states simultaneously develop protection of property rights and fiscal capacity, my results show that perfect property rights protection can actually undermine the state’s ability to tax. In a world of frictionless international capital flows, some level of expropriation risk may be necessary to prevent a fiscal crisis due to evasion. |
| Keywords: | Tax evasion and avoidance, political economy |
| JEL: | H26 P16 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2019n15&r=all |
| By: | Lips, Wouter |
| Abstract: | This article investigates the BRICs’ involvement in the adoption of Automatic Exchange of Information (AEoI) by the G20 and the Organisation for Economic Cooperation and Development (OECD) as a major breakthrough in the global fight against tax evasion. Our main questions concern the BRICs’ willingness to accept AEoI, and their agreement to the Western-dominated OECD as its institutional forum. First, we examine the domestic drivers for BRICs’ participation, as their statist model of capitalism reveals strong disincentives to join this regime and the fact that the budgetary consequences of the global financial crisis were less severe than in Western states. We argue that their agreement on AEoI results more from their persistent balance-of-payments vulnerability to illicit capital than from fiscal weakness, while also discussing the possibilities for mock compliance. Second, we review the role of the non-reciprocal US foreign account tax compliance act (FATCA) in shaping the BRICs’ preference for a multilateral AEoI-regime centred around the OECD’s Common Reporting Standard (CRS). Last, we show that the BRICs’ acceptance of the OECD resulted from pragmatic interests and receiving ownership over the process, together with the absence of coercive mechanisms within the CRS-regime that could fundamentally undermine their sovereignty in this domain. |
| Date: | 2019–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:9nmke&r=all |
| By: | Boly, Amadou (African Development Bank); Konte, Maty (UNU-MERIT); Shimeles, Abebe (African Development Bank) |
| Abstract: | This paper analyses the effect of the quality of governance (proxied by perceived corruption) on attitude towards paying tax. Using the Afrobarometer surveys from 36 African countries over the period 2011-2015, we find that low perception of corruption of different levels of the Executive branch (President Office, Government Officials or Tax Authorities) has a significant and positive impact on tax morale. To account for possible reverse causality between a citizen's perception of governance quality and attitude towards tax payment, we also propose an IV approach, using the ethnicity of the country's leader as instrument for perceived level of corruption. The IV results confirm that an individual's positive perception of governance has a positive impact on its willingness to pay tax. |
| Keywords: | Corruption, Taxation, Governance, Africa |
| JEL: | D73 H71 O23 O55 |
| Date: | 2019–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019042&r=all |
| By: | Mandal, Biswajit; Prasad, Alaka Shree |
| Abstract: | In this paper we attempt to model virtual trade resulting from time zone differences in an otherwise Heckscher-Ohlin set up which is absent in the literature. So, this paper tries to add some value to the existing stuff on the trade theory and the role of time zones. In doing so, it has been proved that exploitation of time zone difference benefits skilled labor only under reasonable assumption. Contrarily, in output font, time zone difference exploiting sector expands and the other sector contracts irrespective of any factor intensity assumption. The model has been extended to examine how distance may also lead to similar outcomes. In addition, the model is further extended to explore the effect of virtual trade on an economy also endowed with a huge supply of unskilled labor causing the occurrence of informality and associated corruption. Interestingly trade turns out to be beneficial to unskilled workers and lead to a fall in the number of workers engaged in corrupt activities in the economy though the informal sector expands. |
| Keywords: | Trade; Time Zone; Factor Prices; Informality; Corruption |
| JEL: | D73 E26 F1 F11 J31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96953&r=all |
| By: | Khatiwada, Sameer (Asian Development Bank Institute); Flaminiano, John Paul (Asian Development Bank Institute) |
| Abstract: | We examine how the services sector could provide decent and gainful employment in developing Asia. Using living wages as a reference point, we report that a significant portion of the workforce in developing Asian economies, the majority of which are employed in the agricultural sector, are not living wage earners. On the other hand, manufacturing, and to a larger extent, services, are able to provide their workforce with good jobs. Economies that are more successful at moving workers from low- to high-productivity sectors have done better on job creation accompanied with improved productivity, higher wages, and large reductions in poverty. Recent developments of information and communication technology industries, as in the case of India and the Philippines, is a striking example of how developing economies can open up business opportunities through global outsourcing of tradable labor. We highlight the importance of improving human capital through education and upskilling, as well as physical and digital infrastructure, to address the large supply of low-productivity and informal sector workers in developing Asia, and to provide new and gainful employment opportunities. |
| Keywords: | decent jobs; modern services; living wages; technology; tradability |
| JEL: | J30 L80 O14 O40 O47 O53 |
| Date: | 2019–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0940&r=all |
| By: | Tripp, Aili Mari |
| Keywords: | International Development |
| URL: | http://d.repec.org/n?u=RePEc:ags:widerw:295590&r=all |
| By: | Zamora, Paula; Mantilla, Cesar; Blanco, Mariana |
| Abstract: | We conducted an audit experiment to examine whether street vendors in Bogotá (Colombia) exert price discrimination based on buyers' attributes, such as gender and nationality; and based on product characteristics, such as the increasing marginal valuation of items needed to complete a collection. We exploited the seasonal demand for album stickers related to the FIFA World Cup Russia 2018. In our within-subjects design, experimenters carried out in-person audits and quoted a pre-determined list of missing stickers. They interacted with 59 sticker vendors located in five geographic clusters. We find that prices quoted to foreign buyers are higher than prices quoted to Colombian buyers. By contrast, we do not find evidence supporting direct gender-based discrimination, neither that vendors charge a higher price per sticker when the list of missing stickers is shorter. We complement the study with a qualitative analysis based on interviews that reveal vendors' pricing strategies, their awareness of price discrimination, and the trade of counterfeits. |
| Date: | 2019–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:6r5hf&r=all |
| By: | Labrunée, María Eugenia; Florio, Eugenia María |
| Abstract: | Esta ponencia describe la forma en que la heterogeneidad estructural y la segmentación laboral de los últimos años en Argentina se complejizan e impactan en un territorio local, el Partido de General Pueyrredon, y en el bienestar de un grupo específico de edad, los niños y niñas y adolescentes -NNA-. Las fuentes secundarias de información muestran el deterioro en el mercado de trabajo y en el ingreso de las familias, lo que conlleva al desarrollo de estrategias familiares de sobrevivencia, y repercute sobre las condiciones de vida de sus miembros. En particular, aquí nos interesa describir los efectos sobre el acceso a los derechos de los NNA de la ciudad de Mar del Plata y generar una comparación entre las realidades en el actual régimen económico con lo observado durante el denominado "régimen de protección". A partir de diciembre del año 2015, en Argentina, se implementaron una serie de políticas macroeconómicas que afectan negativamente el bienestar de la población. De acuerdo a los datos del Sistema Integrado Previsional Argentino -SIPA-, en 2016 se produjo una desaceleración en la creación de puestos de trabajo registrados en el total país. Y la mayor parte de esos nuevos trabajadores -alrededor del 60% en promedio cada trimestre-, corresponden a modalidades propias del sector informal urbano, o bien precarias en cuanto a su duración y a la regularidad de los ingresos. Por otro lado, en el total del país, la agregación realizada por Unicef a fines de 2018 muestra que el 48% de los NNA sufren al menos una privación en sus derechos básicos y fundamentales, "las familias con niñas, niños y adolescentes son quienes enfrentan los riesgos económicos y sociales más severos, particularmente, en los hogares con bajo nivel de ingreso o empleos precarios" (UNICEF, 2019, 25). Los resultados obtenidos servirán como insumo para la descripción, el monitoreo y la evaluación de la efectividad y equidad de las políticas públicas específicas de la infancia vigentes a nivel local. El abordaje considera enfoques teórico-conceptuales, las teorías de la segmentación del mercado de trabajo y las concepciones vigentes de informalidad laboral transversalizados por la perspectiva de género. Además se consideran para el análisis del bienestar, dimensiones relacionadas al acceso a derechos, que para el grupo poblacional analizado se enmarcan en la Convención de los Derechos del Niño (ONU, 1989) y en la Ley Nacional 26061 de Promoción y Protección Integral de los Derechos de los niños Niñas y Adolescentes y la Ley Provincial 13.298. Las estimaciones se realizan con datos oficiales, específicamente, generados desde la Encuesta permanente de Hogares -microdatos para el Aglomerado Mar del Plata Batán en los terceros trimestres de 2010 y de 2018- El análisis distingue cada una de las dimensiones del bienestar factibles de estimar mediante la misma. |
| Keywords: | Mercado de Trabajo; Familia; Niños; Bienestar Social; Partido de General Pueyrredon; |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nmp:nuland:3211&r=all |