TAX RATES, GOVERNANCE, AND THE INFORMAL ECONOMY IN HIGH-INCOME COUNTRIES

Tax evasion and tax avoidance are among the most addressed topics in economic literature in recent years, as one of the most discussed issues in different countries. The research’s primary purpose is to present Albanian residents’ and taxpayers’ perceptions regarding tax evasion, tax avoidance, and tax compliance. The leading indicators used in this report, the attitude towards tax evasion and tax avoidance, rely on individual taxpayers’ perceptions and not on factual evidence such as the amount of income hidden from the tax authorities. Several studies have been done in different countries regarding the population’s perception regarding factors affecting evasion. In this paper, we investigated the following logical sequence: in the beginning, we provided an overview of the fiscal system and legislation, informal economy, and fiscal evasion in Albania. This analysis data was taken from reports from national and international organizations. After this, we analyzed data obtained from a survey issued to 387 taxpayer individuals in Albania. Our objective was to identify, using empirical analysis, factors that influence an individual’s ethical perception of tax avoidance and evasion. The statistical analyses we carried out in the paper were factor analyses and ordinal logistic linear regression analyses using the JMP statistical software. Based on the empirical research, we concluded that government policies positively correlate with taxpayers’ behavior regarding tax compliance. Among other determinants influencing tax evasion, we have evaluated that higher tax rates are an essential element. The results of the research can be helpful for governments and other policymakers’ institutions.

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AWARENESS OF MARGINAL INCOME TAX RATES AMONG HIGH-INCOME TAXPAYERS

National Tax Journal ◽

10.1086/ntj41792052 ◽

1965 ◽

Vol 18 (3) ◽

pp. 258-267 ◽

Cited By ~ 3

Author(s):

BRUCE L. GENSEMER ◽

JANE A. LEAN ◽

WILLIAM B. NEENAN

Keyword(s):

Income Tax ◽

High Income ◽

Tax Rates ◽

Income Taxpayers

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U.S. Tax Progressivity and Redistribution

National Tax Journal ◽

10.17310/ntj.2020.4.04 ◽

2020 ◽

Vol 73 (4) ◽

pp. 1005-1024 ◽

Cited By ~ 2

Author(s):

David Splinter

Keyword(s):

High Income ◽

Tax Credits ◽

Tax Rates ◽

Lower Income ◽

Tax Progressivity ◽

Congressional Budget Office ◽

Tax Shelters ◽

Federal Taxes

U.S. federal taxes have become more progressive since 1979, largely due to more generous tax credits for lower income individuals. Though top statutory rates fell substantially, this affected few taxpayers and was offset by decreased use of tax shelters, such that high-income average tax rates have been relatively stable. Redistribution, which accounts for both taxes and transfers, has also increased according to Congressional Budget Office data. Measures of progressivity and redistribution, however, capture different aspects of policy. Over the longer run, earlier decreases suggest a U-shaped tax progressivity curve since WWII, with the minimum occurring in 1986.

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The Effect of Corporate Taxes on Investment and Entrepreneurship

American Economic Journal Macroeconomics ◽

10.1257/mac.2.3.31 ◽

2010 ◽

Vol 2 (3) ◽

pp. 31-64 ◽

Cited By ~ 178

Author(s):

Simeon Djankov ◽

Tim Ganser ◽

Caralee McLiesh ◽

Rita Ramalho ◽

Andrei Shleifer

Keyword(s):

Cross Section ◽

Informal Economy ◽

Income Tax ◽

Corporate Income Tax ◽

Entrepreneurial Activity ◽

Domestic Firm ◽

Tax Rates ◽

Corporate Tax ◽

Tax Rate ◽

Aggregate Investment

We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on “the same” standardized mid-size domestic firm. In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. Corporate tax rates are correlated with investment in manufacturing but not services, as well as with the size of the informal economy. The results are robust to the inclusion of many controls. (JEL E22, F23, G31, H25, H32, L26)

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The Impact of Federal and State Income Taxes on Timber Income in the South Following the 1986 Tax Reform Act

Southern Journal of Applied Forestry ◽

10.1093/sjaf/13.4.196 ◽

1989 ◽

Vol 13 (4) ◽

pp. 196-203 ◽

Cited By ~ 4

Author(s):

Pete Bettinger ◽

Harry L. Haney ◽

William C. Siegel

Keyword(s):

North Carolina ◽

Income Tax ◽

Income Level ◽

Income Taxes ◽

The State ◽

High Income ◽

Tax Rates ◽

Total Income ◽

State Income ◽

Timber Sale

Abstract The 1988 federal and state income tax liabilities for hypothetical forest landowners in two federal income tax brackets, each with and without timber sale revenue, were calculated for the 14 southern states. At the medium income level, the state portion of total income tax liability(without timber sale revenue) ranges from 9% in Louisiana to 20% in North Carolina. With timber sale revenue, it ranges from 7% in Louisiana to 17% in North Carolina. At the high income level, the state portion of total income taxes (without timber sale revenue) ranged from 7% in Louisianato 16% in North Carolina, and with timber sale revenue, from 6% in Louisiana to 15% in North Carolina. Capital gains exclusions, deductions for federal income taxes, tax rates and schedules, standard deductions, and personal exemptions are the most important provisions for reducing state incometax liability. The installment sale method of reporting income was used as one alternative tax planning strategy for spreading timber sale revenue over a 2-year period. The purpose was to smooth cash flows and reduce the amount of income subject to higher marginal tax rates. Georgia taxpayerselecting the installment sale method of reporting in a hypothetical case saved $1,203 and $585 in total income taxes for the medium and high income levels, respectively. South. J. Appl. For. 13(4):196-203.

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Interregional Fiscal Equity and Benefit Transfers

Public Finance Quarterly ◽

10.1177/109114217400200102 ◽

1974 ◽

Vol 2 (1) ◽

pp. 25-42 ◽

Cited By ~ 1

Author(s):

Paul E. Smith

Keyword(s):

State Government ◽

Low Income ◽

Income Tax ◽

Transportation Problem ◽

Minimum Cost ◽

Revenue Sharing ◽

High Income ◽

Fiscal Equity ◽

Tax Rates ◽

Federal Income Tax

Over twenty years ago James M. Buchanan showed that serious horizontal inequities could exist in a federated system in the sense that residents of relatively low-income political subdivisions might receive lower benefits (net of taxes) from central and state government expenditures than people with the same income residing in high-income states. One possible solution offered was the imposition of discriminatory federal income tax rates with higher rates being charged in high-income states. This paper suggests an alternative solution in the form of federal transfers of benefits among states, either via conditional grants or revenue-sharing. The relative merits of the two approaches are discussed, and it is shown that the redistribution of benefits can be achieved at minimum cost by an application of the Hitchcock transportation problem.

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Tackling employment in the informal economy: A critical evaluation of the neoliberal policy approach

Economic and Industrial Democracy ◽

10.1177/0143831x14557961 ◽

2016 ◽

Vol 38 (1) ◽

pp. 145-169 ◽

Cited By ~ 15

Author(s):

Colin C Williams

Keyword(s):

Public Sector ◽

Informal Economy ◽

Free Market ◽

Critical Evaluation ◽

State Intervention ◽

Transition Countries ◽

Policy Implications ◽

Tax Rates ◽

Minimal State ◽

State Interference

This article evaluates critically the neoliberal perspective that employment in the informal economy is a product of high taxes, public sector corruption and state interference in the free market and that reducing taxes, corruption and the regulatory burden via minimal state intervention is the remedy. Analysing the varying size of the informal economy across 36 developing and transition countries, little or no association is found with higher tax rates, greater levels of corruption and state interference. Instead, employment in the informal economy appears to reduce with higher levels of regulation and state intervention. The theoretical and policy implications are discussed.

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