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Tax Increases (tax + increase)
Selected AbstractsAnticipating Tax Changes: Evidence from the Finnish Corporate Income Tax Reform of 2005,FISCAL STUDIES, Issue 2 2008Seppo Kari H25; H32 Abstract Using register-based panel data covering all Finnish firms from 1999 to 2004, we examine how corporations anticipated the 2005 dividend tax increase via changes in their dividend and investment policies. The Finnish capital and corporate income tax reform of 2005 creates a useful opportunity to measure this behaviour, since it involves exogenous variation in the tax treatment of different types of firms. The estimation results reveal that those firms that anticipated a dividend tax hike increased their dividend payouts in a statistically significant way. This increase was not accompanied by a reduction in investment activities, but rather was associated with increased indebtedness in non-listed firms. The results also suggest that the timing of dividend distributions probably offsets much of the potential for increased dividend tax revenue following the reform. [source] Pollution Abatement Investment When Environmental Regulation Is UncertainJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 2 2000Y.H. Farzin In a dynamic model of a risk-neutral competitive firm that can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the tax increase is uncertain. We show that a higher pollution tax encourages abatement investment if it does not exceed a certain threshold rate. However, akin to the Diamond-Mirrlees tax anomaly, it is possible that a higher pollution tax rate results in more pollution. The magnitude uncertainty discourages abatement investment, but at the time of the actual tax increase the abatement investment path may shift either upward or downward. On the other hand, when the timing is uncertain, the abatement investment path always jumps upward, thus suggesting that the effect of magnitude uncertainty on the optimal investment path may be more pronounced than that of timing uncertainty. Further, we show that the ad hoc practice of raising the discount rate to account for the uncertainty leads to underinvestment in abatement capital. We show how the size of this underinvestment bias varies with the future tax increase. Finally, we show that a credible threat to accelerate the tax increase can induce more abatement investment. [source] Population Ageing, Fiscal Pressure and Tax Smoothing: A CGE Application to Australia,FISCAL STUDIES, Issue 2 2006Ross Guest Abstract This paper analyses the fiscal pressure from population ageing using an intertemporal CGE model, applied to Australia, and compares the results with those of a recent government-commissioned study. The latter study uses an alternative modelling approach based on extrapolation rather than optimising behaviour of consumers and firms. The deadweight losses from the fiscal pressure caused by population ageing are equivalent to an annual loss of consumption of $260 per person per year in 2003 dollars in the balanced-budget scenario. A feasible degree of tax smoothing would reduce this welfare loss by an equivalent of $70 per person per year. Unlike the extrapolation-based model, the CGE approach takes account of feedback effects of ageing-induced tax increases on consumption and labour supply, which in turn impact on the ultimate magnitude of fiscal pressure and therefore tax increases. However, a counterfactual simulation suggests that the difference in terms of deadweight losses between the two modelling approaches is modest, at about $30 per person per year. [source] Investing Public Pensions in the Stock Market: Implications for Risk Sharing, Capital Formation and Public Policy in the Developed and Developing WorldINTERNATIONAL REVIEW OF FINANCE, Issue 3 2001Deborah Lucas Concerns that existing public pension systems will be unable to pay benefits to a rapidly ageing population without sharp tax increases, and the prospect of higher average returns on stocks than on government securities, are drawing the attention of policy,makers worldwide to the option of investing public pension assets in stocks. Including stock market investments in public pension plans could improve risk sharing within and between generations, and could perhaps lead to faster market development in some countries. It could also result in excessive risk,taking, higher transactions costs and a false sense of increased financial security. This paper assesses these issues, with an emphasis on the considerations that are of special importance to developing markets. A contrast is drawn between the demographic outlook in East Asia and the major industrialized countries. Some lessons are drawn from the reform experience in Chile and elsewhere in Latin America. [source] Business Power and Tax Reform: Taxing Income and Profits in Chile and ArgentinaLATIN AMERICAN POLITICS AND SOCIETY, Issue 2 2010Tasha Fairfield ABSTRACT This article examines efforts to increase taxation of highly concentrated, undertapped income and profits in Latin America in the aftermath of structural adjustment. Argentina has advanced further than Chile in two policy areas: corporate taxation, which taps firm-level profits; and tax agency access to bank information, which helps reduce income tax evasion. These outcomes are explained by drawing on the classic concepts of business instrumental power, which entails political actions, and structural power, which arises from investment decisions. In Chile, strong instrumental power removed reforms in both areas from the policy agenda. In Argentina, much weaker instrumental power at the cross-sectoral level facilitated corporate tax increases. Bank information access was expanded after Argentina's 2001 crisis weakened the financial sector's instrumental power and reduced structural power. [source] Competitive Institution Building: The PT and Participatory Budgeting in Rio Grande do SulLATIN AMERICAN POLITICS AND SOCIETY, Issue 3 2006Benjamin Goldfrank ABSTRACT In the late 1990s, the Workers' Party (PT) government of the Brazilian state of Rio Grande do Sul introduced participatory budgeting, a process in which citizens establish annual investment priorities in public assemblies. This innovation was one of several attempts by incumbent parties to structure political conflict using budget institutions. The character of participatory budgeting is most evident in its policymaking processes and policy outcomes. The process circumvented legislative arenas where opponents held a majority, privileged participation by the PT's voter base, and reached into opposition strongholds. The outcomes favored the interests of potential supporters among poor and middle-class voters. The political project proved vulnerable to its own raised expectations: it failed to sustain the image of clean government; brought tax increases along with fiscal insecurity; and left unfulfilled the participants' expectations for targeted investments. This article highlights the role of participatory budgeting, indeed all budgeting, in partisan actors' institutional choices. [source] Taxes, Time, and Support for SecurityPUBLIC BUDGETING AND FINANCE, Issue 2 2008AMY K. DONAHUE New technologies have been developed in response to terrorism. These present problems for local officials: implementing technologies will be expensive, and no technologies exist that can be used to gauge demand. We apply contingent valuation methodologies to determine support for additional taxes to pay for new terrorism-related technologies and services. We present findings from a national survey about people's attitudes toward terrorism prevention and response. We find that respondents generally support new services and technologies and local tax increases to pay for them. We also find that respondents are willing to pay more if programs have everyday uses that would enhance public safety, but are less supportive as inconveniences increase. [source] Accounting for Growth in the Australian Wine Industry, 1987 to 2003THE AUSTRALIAN ECONOMIC REVIEW, Issue 2 2001Glyn Wittwer A computable general equilibrium model of the Australian economy is used to account for the dramatic growth in Australia's wine industry between 1987 and 1999, and to project grape and wine volumes and prices to 2003. Export demand growth has made a major contribution to total output growth in premium wines, and accounts for most of the increase in the producer price of premium red wine. Domestic consumer preferences have shifted, mainly towards premium red wine, but there is also some evidence of growing demand for premium white wine since the mid 1990s. From the perspective of producers, productivity growth, while being less important than growth in domestic demand, appears to have more than offset the negative effects on suppliers of wine consumer tax increases. From the domestic consumers' perspective, however, tax hikes have raised retail prices much more than productivity gains have lowered them. The high and sustained levels of profitability resulting from export demand growth have led to a massive supply response in Australia. Even so, by 2003 Australian wine output will still be less than 5 per cent of global production. [source] | ||||||||||||||||||||||