Tax Base (tax + base)

Distribution by Scientific Domains

Selected Abstracts


Barry Bracewell-Milnes
Taxes on capital are economically and socially counterproductive. The economy and society would benefit from their abolition. The obstacle to their abolition is not financial or economic but a failure of political will. This article looks at taxes on capital from an economic perspective: how do they differ from other taxes, what costs do they impose on the economy, and what are the consequences of their abolition? And, even if they are a failure economically, can they be justified socially or politically? [source]

Is Reserve-ratio Arithmetic More Pleasant?

ECONOMICA, Issue 279 2003
Joydeep Bhattacharya
Does it matter in a revenue-neutral setting if the government changes the inflation tax base or the inflation tax rate? We answer this question within the context of an overlapping-generations model in which government bonds, capital and cash reserves coexist. We consider experiments that parallel those studied in Sargent and Wallace's ,unpleasant monetarist arithmetic'; the government uses seigniorage to service its debt, choosing between changing either the money growth rate (the inflation tax rate) or the reserve-requirement ratio (the inflation tax base). In the former case we obtain standard unpleasant arithmetic; in the long run a permanent open market sale results in higher money growth, and higher long-run inflation. Somewhat surprisingly, it turns out that, for a given money growth rate, lower reserve requirements fund the government's interest expense. Associated with the lower reserve requirements is lower long-run inflation and higher welfare, compared with the money-growth case. The broad message is that reserve-ratio arithmetic can be pleasant even when money-growth arithmetic is not. [source]

International Commodity Taxation under Monopolistic Competition

Andreas Haufler
We analyze non-cooperative commodity taxation in a two-country trade model characterized by monopolistic competition and international firm and capital mobility. In this setting, taxes in one country affect foreign welfare through the relocation of mobile firms and through changes in the rents accruing to capital owners. With consumption-based taxation, these fiscal externalities exactly offset each other and the non-cooperative tax equilibrium is Pareto efficient. With production-based taxation, however, there are additional externalities on the foreign tax base and the foreign price level that lead non-cooperative tax rates to exceed their Pareto efficient levels. [source]

Federalism in an endogenous growth model with tax base sharing and heterogeneous education services,

Thierry Madiès
Federal system; provision of education; tax base sharing; endogenous growth and human capital; "predative" governments Abstract., We examine the effects of tax base sharing on the growth path of an economy in which central and regional governments provide heterogeneous educational services (general and specific training) which increase capital productivity. Our focus is the non co-operative game between two overlapping governments , central and regional , whose objective is to maximise their net tax revenues of educational spending (Leviathan hypothesis). We will show that the dispute between centralisation and decentralisation depends on two effects; the first is a tax effect, which supports centralisation in that tax base sharing leads to overtax the common tax base, and so has a negative effect on the growth path. Second is a public good effect, which defends decentralisation because the very diversity of central and regional educational services has a beneficial effect on the growth path (educational services are imperfect substitutes and "specific assets" of each level of government). We discuss the virtue of tax base sharing in a federation, as an incentive scheme within government's grasp. [source]

Führt Steuervereinfachung zu einer ,gerechteren" Einkommensverteilung?

Eine empirische Analyse für Deutschland
This paper investigates the distributional impact of tax simplification. Our empirical analysis is based on a microsimulation model for the German tax and transfer system (FiFoSiM). We model tax simplification as the abolition of a set of controversial deductions from the tax base. We combine these simplifications with a tax rate schedule adjustment to preserve revenue neutrality. The combination with a flat tax rate increases the inequality of after-tax incomes whereas the combination with a directly progressive rate schedule adjustment reduces inequality. [source]

Die deutsche Steuerbelastung im internationalen Vergleich: Warum Deutschland (k)eine Steuerreform braucht

Frank Hettich
This paper attacks the widespread view that the latest (corporate) income tax reform in Germany was urgently needed to reduce the tax burden on the German economy. In the run-up to this tax reform, the public debate focused on nominal income tax rates and hence neglected the determination of the tax base. Empirical results on effective tax burdens in OECD countries show that a reform of German (corporate) capital taxation cannot be justified on the grounds of the tax burden. The international comparison of effective average tax rates shows that the corporate tax burden in Germany steadily declined from 1980 and was in 1996 lower than in most other industrialised countries. However, we argue that not only the actual tax burden but also the complexity of a tax system determines its international competitiveness. A German tax reform was , and still is , necessary due to the lasting complexity of the tax system and the relatively high tax burden on labour. [source]

Tax Expenditure Budgets, Budget Policy, and Tax Policy: Confusion in the States

John L. Mikesell
A tax expenditure budget should contribute to efficient and effective public decisions by quantifying the division in the tax structure between provisions that represent revenue policy (distribute the cost of government according to the legislated tax base) and parts that represent budget policy (substitute for direct spending). For this transparency to have the desired impact, however, the tax expenditure budget process and the direct expenditure process must be properly integrated and the tax expenditure budget must make an accurate division between the parts of the tax structure. A review of the 33 states with tax expenditure systems shows many weaknesses in application of the concept and poor linkage to the direct spending budget system. Their most significant flaw is in dividing the tax structure into normal and preference elements; states need greater attention to defining their basic tax structure if they are to have a meaningful tax expenditure budget. [source]

Retirement Incomes: Private Savings versus Social Transfers

John Creedy
It has long been known, from the work of Samuelson and Aaron, that if (approximately) the sum of the population and real earnings growth rates exceeds the real interest rate, all individuals can be made better off by using a pay-as-you-go pension scheme. The basic overlapping generations model that is typically used to examine such intergenerational transfers makes no allowance for labour supply responses to taxes and transfers, and so cannot be used to examine optimal tax and pension levels. The present paper allows for labour supply effects, whereby a tax imposed to finance current pensions introduces distortions to labour supply and a reduction in the tax base. The optimal proportional tax rate, and therefore the optimal combination of private savings and social transfers, is derived in terms of the time preference rate, the taste for leisure, real interest and productivity and population growth rates. It is found that the condition under which the optimal tax is positive is the same as the Samuelson,Aaron condition. A crucial ingredient in obtaining this result is an assumption that pension levels are adjusted in line with the growth of wage rates rather than, for example, being held constant in real terms. This in turn is found to imply that earnings grow at the same rate as the wage, so long as preferences are such that leisure can be expressed as a proportion of full income. [source]

Tax performance: a comparative study

Joweria M. Teera
This paper seeks to analyse tax performance across countries, utilizing what Musgrave (1969) referred to as the stochastic approach, where tax performance is analysed by comparisons with the average performance. The regression approach to tax performance assessment is used and a tax effort index is constructed. Among the variables that are identified to be important determinants of tax shares is a measure of tax evasion. The tax effort indices obtained show that generally the upper middle-income and high-income OECD groups are making better use of their tax bases to increase revenue. There are also economies of scale with respect to population density. Copyright © 2004 John Wiley & Sons, Ltd. [source]

Local Option Sales Taxes and Fiscal Disparity: The Case of Georgia Counties

While local option sales taxes (LOST) have become an important revenue source for local governments, there has been concern about the distribution of LOST revenues: the uneven distribution of sales tax bases may have introduced a new source of fiscal inequality and exacerbated existing fiscal disparity. Using Georgia county data (N=159, 1970,2000), this study examines whether and how LOST have affected local fiscal disparity. Our findings suggest that the effects of LOST on fiscal disparity vary with the approach to measure revenue-raising capacity; thus the issue of LOST distribution is sensitive to the underlying conceptualization of "fiscal equity." [source]