On the sufficiency of using the elasticity of taxable income to calculate deadweight loss: the implications of charitable giving and warm glow

2014 ◽  
Vol 22 (6) ◽  
pp. 1040-1047 ◽  
Author(s):  
Zhiyong An
Keyword(s):  
Charitable Giving ◽  
Deadweight Loss ◽  
Warm Glow ◽  
Taxable Income ◽  
Elasticity Of Taxable Income

Does Evasion Invalidate the Welfare Sufficiency of the ETI?

2016 ◽  
Vol 16 (4) ◽  
Author(s):  
Christian Gillitzer ◽  
Joel Slemrod
Keyword(s):  
Economic Policy ◽  
Risk Aversion ◽  
Tax Evasion ◽  
Income Elasticity ◽  
Deadweight Loss ◽  
Sufficient Statistic ◽  
Taxable Income ◽  
Elasticity Of Taxable Income ◽  
Efficiency Cost ◽  
Economic Journal

Abstract In an influential article, Raj Chetty (2009, “Is the Taxable Income Elasticity Sufficient to Calculate Deadweight Loss? The Implications of Evasion and Avoidance.” American Economic Journal: Economic Policy 1 (2):31–52) argues that in the presence of tax evasion the elasticity of taxable income (ETI) is no longer a sufficient statistic for the marginal efficiency cost of funds (MECF). We show that, under Chetty’s (2009, “Is the Taxable Income Elasticity Sufficient to Calculate Deadweight Loss? The Implications of Evasion and Avoidance.” American Economic Journal: Economic Policy 1 (2):31–52) risk-neutrality assumption, correctly measuring the standard MECF only requires adding detected evasion inclusive of penalties. In the more general case of risk aversion, it further requires amending the formula to address the private risk-bearing cost of tax evasion.

The Tax Elasticity of Financial Statement Income: Implications for Current Reform Proposals

2020 ◽  
Vol 73 (4) ◽  
pp. 1047-1064
Author(s):  
Dhammika Dharmapala
Keyword(s):  
Conceptual Framework ◽  
Welfare Analysis ◽  
Financial Statement ◽  
Deadweight Loss ◽  
Corporate Tax ◽  
Taxable Income ◽  
Relevant Evidence ◽  
Elasticity Of Taxable Income ◽  
Current Reform

Current reform proposals in international and corporate tax (most notably the Organisation for Economic Co-operation and Development’s Global Anti-Base Erosion proposal) envisage taxing financial statement income. This paper develops a conceptual framework, based on the literature on the elasticity of taxable income (ETI), for the welfare analysis of such proposals and discusses the available evidence on the tax elasticity of financial statement income. The central conclusion is that the most relevant evidence suggests a large responsiveness of financial statement income to taxes (and, hence, albeit with significant limitations and caveats, arguably a large deadweight loss). The paper also highlights the need for more evidence on this question.

scholarly journals The Elasticity of Taxable Income: A Meta-Regression Analysis*

2021 ◽  
Author(s):  
Carina Neisser
Keyword(s):  
Regression Analysis ◽  
Policy Analysis ◽  
Selective Reporting ◽  
Tax Base ◽  
Taxable Income ◽  
Income Elasticities ◽  
Elasticity Of Taxable Income ◽  
Meta Regression ◽  
Meta Regression Analysis ◽  
Key Parameter

Abstract The elasticity of taxable income (ETI) is a key parameter in tax policy analysis. To examine the large variation found in the literature of taxable and broad income elasticities, I conduct a comprehensive meta-regression analysis using information from 61 studies containing 1,720 estimates. My findings reveal that estimated elasticities are not immutable parameters. They are correlated with contextual factors and the choice of the empirical specification influences the estimated elasticities. Finally, selective reporting bias is prevalent, and the direction of bias depends on whether deductions are included in the tax base.

scholarly journals Altruism and Egoism/Warm Glow in Economics and Psychology: Building a Bridge Between Different Experimental Approaches

2017 ◽  
Author(s):  
Mark Ottoni-Wilhelm
Keyword(s):  
Experimental Design ◽  
Charitable Giving ◽  
Experimental Testing ◽  
Helping Behavior ◽  
Experimental Designs ◽  
Warm Glow ◽  
Systematic Description ◽  
Experimental Approaches

The same dual–motive theory that combines altruism and egoism/warm glow is used in economics to study charitable giving and in psychology to study helping behavior. However, the two disciplines have taken different approaches to experimental testing. This paper builds a bridge between the different experimental approaches. For economists, the importance of this bridge is that it leads to a systematic description of six specific types of egoism/warm glow, and further suggests experimental designs that could be used to investigate warm glow motives in charitable giving. For psychologists, the bridge is important because the experimental design in economics suggests a way to test, directly rather than indirectly, the empathy–altruism hypothesis.

scholarly journals Too cold for warm glow? Christmas-season effects in charitable giving

PLoS ONE ◽  
2019 ◽  
Vol 14 (5) ◽  
pp. e0215844 ◽  
Author(s):  
Stephan Müller ◽  
Holger A. Rau
Keyword(s):  
Charitable Giving ◽  
Warm Glow
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