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on Public Finance |
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Issue of 2010‒05‒02
thirteen papers chosen by |
| By: | Heinemann, Friedrich; Hennighausen, Tanja |
| Abstract: | This contribution empirically analyses the individual determinants of tax rate preferences. For that purpose we make use of the representative German General Social Survey (ALLBUS) that offers data on the individual attitudes toward progressive, proportional, and regressive taxation. Our theoretical considerations suggest that beyond self-interest, information, fairness considerations, economic beliefs and several other individual factors drive individual preferences for tax rate structures. Our empirical results indicate that the self-interest view does not offer the sole explanation for the heterogeneity in attitudes toward progressive taxation. Rather, we show that the choice of the favoured tax rate is also driven by fairness considerations. -- |
| Keywords: | tax progression,policy preferences,fairness,ALLBUS |
| JEL: | H89 D63 C42 A13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10017&r=pub |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (The Ratio Institute); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Public policy affects the prevalence and performance of both productive and high-impact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited in the economy. This process depends on complementary key actors who use their competencies in what we denote a competence bloc. Although variations in economic contexts make prescribing a general panacea impossible, a number of relevant policy areas that affect key actors can be identified. In this paper this is done in the areas of tax policy and labor market policy. It is shown that high and/or distortive taxes and heavy labor market regulations impinge on the creation and functioning of competence blocs, thereby reducing high-impact entrepreneurship. |
| Keywords: | Entrepreneurship; Gazelles; High-growth firms; High-impact entrepreneurship Innovation; Institutions; Labor market policy; Tax policy |
| JEL: | H32 L25 L50 M13 O31 P14 |
| Date: | 2010–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0149&r=pub |
| By: | Stephen Calabrese (Carnegie Mellon University); Dennis Epple (Carnegie Mellon University) |
| Abstract: | We study the political economy of state limitations on the taxing powers of local governments, investigating the effects of such restriction on housing markets, community composition, and types of taxes and expenditures undertaken by local governments. We characterize equilibrium when voters choose values of multiple policy (tax and expenditure) instruments, finding that tax limitations have very substantial effects on housing prices and the composition of communities. Political support for tax limits comes from suburban voters and from a subset of central-city voters. Support for tax limits come even from residents of communities that are not constrained by the limits. |
| Keywords: | Tax limits, redistribution, public goods, property tax, income tax, head tax |
| JEL: | D72 D78 H30 H42 H72 H73 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-14&r=pub |
| By: | Alejandro Esteller-Moré (Universitat de Barcelona & IEB); Umberto Galmarini (Università dell'Insubria); Leonzio Rizzo (Università di Ferrara & IEB) |
| Abstract: | We examine the tax assignment problem in a federation with two layers of government sharing an elastic tax base, in which Leviathan policy makers levy an excise tax in an imperfectly competitive market and producers lobby for tax rate cuts. If the lobby of producers is very influential on policy makers, we find that taxation by both layers of government might be optimal, provided that the market of the taxed good is highly concentrated; otherwise, it is optimal to assign the power to tax only to one level of government. Taxation by both layers of government is not optimal either when the influence of the lobby is weak, whatever the degree of market power. We also examine a richer set of tax setting outcomes, by considering the possibility that state policy makers have heterogeneous tax policy objectives. |
| Keywords: | vertical tax externalities, tax assignment, lobbying, specific taxation |
| JEL: | H71 H77 D70 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-8&r=pub |
| By: | Jordi Jofre-Monseny (University of Barcelona & IEB) |
| Abstract: | Several theoretical papers that examine tax competition with agglomeration effects have stressed the possibility that the governments of jurisdictions in which economic activity is concentrated may tax firms more heavily (taxable agglomeration rents). In this paper, we examine the tax rate setting decisions taken with regard to the Spanish municipal business tax (Impuesto sobre Actividades Económicas). The analysis, carried out with a sample of 2,772 municipalities, focuses on the effect that urbanization economies, localization economies and the market potential of municipalities have on their business tax rates. High urbanization economies and high localization economies are found to increase the business tax rate. Although the evidence is weaker, the results also indicate that municipalities with better access to demand (of consumers) set higher tax rates |
| Keywords: | Local taxes, agglomeration economies, tax competition |
| JEL: | H3 H7 R |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-15&r=pub |
| By: | Alejandro Esteller-Moré (Universitat de Barcelona & IEB); Leonzio Rizzo (Università di Ferrara & IEB) |
| Abstract: | We test for the state interdependence of gasoline and cigarette taxation in the US (1975-2006). We estimate a tax reaction function, and find that state interdependence is due solely to yardstick competition, since any interaction disappears completely in the case of states with lame duck governors. This result holds for both taxes: the short-run reaction of those states whose governor is eligible to stand for reelection is 0.13 and 0.21 for gasoline and cigarette taxation, respectively. In the long run, the cigarette tax rates levied in a jurisdiction match those of its neighbors perfectly, while the long-run reaction in the case of gasoline is much lower at 0.72. |
| Keywords: | Tax competition, political accountability, excise taxes |
| JEL: | H71 H77 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-3&r=pub |
| By: | Reckon |
| Abstract: | This report is concerned with quantifying and analysing the VAT gap in each EU Member State over the period 2000?2006. This report has been produced by Reckon LLP following a study commissioned by the European Commission, Directorate-General for Taxation and Customs Union. It is the result of independent work carried out by Reckon LLP, and does not necessarily reflect the opinions or position of the European Commission or of the national bodies consulted. Any errors are our own. |
| Keywords: | European Union, taxation, value added taxation, tax fraud |
| JEL: | H25 H26 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxstu:0029&r=pub |
| By: | Mireille Chiroleu-Assouline (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Mouez Fodha (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This paper analyzes the environmental tax policy issues when labor is heterogeneous. The objective is to assess whether an environmental tax policy could be Pareto improving, when the revenue of the pollution tax is recycled by a change in the labor tax properties. We show that, depending on the heterogeneity characteristics of labor and on the initial structure of the tax system, a policy mix could be designed in order to leave each class of worker unharmed. It consists of an increase in progressivity together with a decrease in the flat rate component of the wage tax. |
| Keywords: | Environmental tax, Heterogeneous agents, Welfare analysis, Tax progressivity. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00348891_v2&r=pub |
| By: | Hansson , Åsa (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University) |
| Abstract: | Abstract: We empirically analyze the impact of corporate tax rates and agglomeration economies on FDI using panel data on bilateral FDI flows and stocks in the enlarged European Union. The novelty of the paper is that it explicitly deals with agglomeration forces and how these may explain differences in tax policies between new and old member countries. The empirical analysis closely follows the implicit underlying model where the foreign direct investment decision is seen as a two-step procedure that entails: 1) whether or not to invest; and 2) the amount of FDI to invest. Using recent data on corporate tax rates for all 27 EU member countries from 1995-2006, we find that there are large differences in the determinants of FDI going to the EU15 and new member countries. While tax differentials mainly seem to influence FDI flows to new members, agglomeration economies appear to play a somewhat more important role for the amount of investment made within the EU15. In addition, significant differences are found between the determinants of the extensive and intensive margins of the FDI decision. |
| Keywords: | Corporate taxes; agglomeration economies; foreign direct investment |
| JEL: | F12 F15 F21 H71 |
| Date: | 2010–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2010_003&r=pub |
| By: | Robert S. Chirinko (University of Illinois at Chicago); Daniel J. Wilson (Federal Reserve Bank of San Francisco) |
| Abstract: | The standard model of strategic tax competition assumes that government policymakers are perfectly benevolent. We depart from this assumption by allowing policymakers to be influenced by the rent-seeking behavior of businesses. Campaign contributions may affect tax competition and enhance or retard the mobility of capital across jurisdictions. Based on a panel of 48 U.S. states and unique data on business campaign contributions, we find that contributions have a significant direct effect on tax policy, the economic value of a $1 business campaign contribution is nearly $4, the slope of the tax reaction function is negative, and the empirical results are sensitive to state effects. |
| Keywords: | Campaign contributions, business taxation, state tax competition |
| JEL: | H71 H73 H25 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-2&r=pub |
| By: | Michael Kumhof; Günter Coenen; Dirk Muir; Charles Freedman; Susanna Mursula; Christopher J. Erceg; Davide Furceri; René Lalonde; Jesper Lindé; Annabelle Mourougane; John Roberts; Werner Roeger; Carlos de Resende; Stephen Snudden; Mathias Trabandt; Jan in ‘t Veld; Douglas Laxton |
| Abstract: | The paper assesses, using seven structural models used heavily by policymaking institutions, the effectiveness of temporary fiscal stimulus. Models can, more easily than empirical studies, account for differences between fiscal instruments, for differences between structural characteristics of the economy, and for monetary-fiscal policy interactions. Findings are: (i) There is substantial agreement across models on the sizes of fiscal multipliers. (ii) The sizes of spending and targeted transfers multipliers are large. (iii) Fiscal policy is most effective if it has some persistence and if monetary policy accommodates it. (iv) The perception of permanent fiscal stimulus leads to significantly lower initial multipliers. |
| Keywords: | Budget deficits , Cross country analysis , Economic forecasting , Economic models , Europe , Fiscal policy , Government expenditures , Monetary policy , Public debt , Stabilization measures , Taxes , United States , |
| Date: | 2010–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/73&r=pub |
| By: | David Reinstein; Gerhard Riener |
| Abstract: | Abstract Previous experimental and observational work suggests that people act more generously when they are observed and observe others in social settings. But the explanation for this is unclear. An individual may want to send a signal of her generosity in order to improve her own reputation. Alternately (or additionally) she may value the public good or charity itself and, believing that contribution levels are strategic complements, give more in order to influence others to give more. We perform the first series of laboratory experiments that can separately estimate the impact of these two social effects, and test whether realized influence is consistent with the desire to influence, and whether either of these are consistent with anticipated influence. We find that “leaders” are influential only when their identities are revealed along with their donations, and female leaders are more influential then males. Identified leader’s predictions suggest that are aware of their influence. They respond to this by giving more than either the control group or the unidentified leaders. We find mixed evidence for “reputation-seeking.” |
| Date: | 2010–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:688&r=pub |
| By: | Serra Garcia, M.; Damme, E.E.C. van; Potters, J.J.M. (Tilburg University, Center for Economic Research) |
| Abstract: | We compare signaling by words and actions in a one-shot 2-person public good game with private information. The informed player, who knows the exact return from contributing, can signal by contributing first (actions) or by sending a costless message (words). Words can be about the return or about her contribution decision. Theoretically, actions lead to fully e¢ cient contributions. Words can be as influential as actions, and thus elicit the uninformed player's contribution, but allow the informed player to free-ride. The exact language used is not expected to matter. Experimentally, we find that words can be as influential as actions. Free-riding, however, does depend on the language: the informed player free-rides less when she talks about her contribution than when she talks about the returns. |
| Keywords: | Information transmission;costly signaling;communication;experiment. |
| JEL: | C72 D82 D83 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201033&r=pub |