The Estate Tax Drag on Family Businesses

This essay considers estate taxes and their effect upon entrepreneurial activity and family business. After a brief history of estate taxes, estate compositions and tax burdens are addressed. Finally, a simulation model is used to quantify the disincentive effect of estate taxation upon wealth accumulation. The simulation model suggests that estate taxes have the same disincentive effect as would a 67% individual tax rate or a 67.85% corporate tax rate. Thus, it would be necessary to roughly double the individual and corporate tax rates to reduce bequests to the level under the current estate tax regime.

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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 Economic Consequences Of Repealing The Estate Tax Law

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v1i1.2955 ◽

2011 ◽

Vol 1 (1) ◽

Author(s):

Raj Kiani ◽

Dwight Call ◽

M.A. Sangeladji

Keyword(s):

Income Taxes ◽

Economic Consequences ◽

Tax Rates ◽

Font Size ◽

Estate Tax ◽

Charitable Contributions ◽

Tax Rate ◽

Distribution Of Wealth ◽

Class Level ◽

The Individual

The federal estate tax has been a part of our tax structure since the founding of the country. It is the federal government’s only tax on accumulated transfers of wealth. From its inception in 1916, it has been applied only to very large estates. The transfer of wealth can take place during the individual’s life (gift) or at the time of death (estate).  Both types of transfer are combined and taxed according to the Taxpayer Relief Act of 1976. The Taxpayer Relief Act of 1976 was an important legislation affecting the structure of both the federal estate and gift taxes. In this Act, a unified system of taxation was established which treats both transfers of wealth, either during the life of the owner (gift) or at his or her death (estate) uniformly. The recent legislation of 2001 made drastic changes to the tax rates and the level of exemptions of the 1976 federal estate tax. According to this legislation, the maximum estate tax rate will drop gradually during the period of 2002-2010. Beginning in 2002, the maximum unified tax rate is reduced from 55% to 50%. This drop will reach to 45% by the year 2007 and will remain unchanged till 2009. The limit of exemption for a taxable transfer of wealth will increase from $1,000,000 to $1,500,000 by the year 2004, to $2,000,000 by 2006, to $3,500,000 by 2009, and to infinity by 2010 (estate tax will be repealed).  This original version of federal estate tax will come back in 2011, unless the Congress decides differently and changes the law. Like other social, economic, and tax issues, the transfer of wealth tax (estate and gift) is subject to debate and disagreements. The opponents of the estate tax support their views by referring to the immorality aspect of the tax and its undesired economic consequences. The supporters of the estate tax present their arguments on the basis of fairness and the ability of the tax to encourage charitable contributions. In addition, they believe that the economic consequences of repealing the estate tax would ripple through our economy and reduce federal revenues. Consequently, it could bring inequity and unfair distribution of wealth among the citizens and eventually could culminate in high difference in the class level of citizens. In our view, the federal estate tax is a tax worth fighting to keep and attempting to improve. If it were repealed, the burden of taxes would be felt more by those who have no wealth and had paid their income taxes on their earned income once before. Consequently, the lawmakers should keep the federal estate tax and fixing it by adjusting the amount of exemptions and the tax rates to reasonable, effective, and fair levels.

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An Investigation of the Firm Size—Effective Tax Rate Relation in the 1980s

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x9300800206 ◽

1993 ◽

Vol 8 (2) ◽

pp. 167-182 ◽

Cited By ~ 70

Author(s):

Thomas C. Omer ◽

Karen H. Molloy ◽

David A. Ziebart

Keyword(s):

Firm Size ◽

Tax Burden ◽

Tax Rates ◽

Corporate Tax ◽

Effective Tax Rate ◽

Effective Tax Rates ◽

Policy Makers ◽

Tax Rate ◽

Sample Composition ◽

Rate Relation

Given the recent emphasis on effective tax rates by policy makers and accounting researchers, this study investigates the relation between firm size and corporate tax burdens on a yearly and an industry basis. The analysis is conducted using five effective tax measures employed in previous studies in order to determine the degree to which inferences between size and tax burden are robust across these different effective tax measures. The results indicate that the relation is fairly robust across measures and, in instances in which the relation is not upheld by our analysis, sample composition explains differences in the observed relation between firm size and corporate tax burden.

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Company Taxation in the European Union

Comparative Economic Research ◽

10.2478/v10103-011-0022-2 ◽

2012 ◽

Vol 14 (3) ◽

pp. 119-136 ◽

Cited By ~ 1

Author(s):

Dorota Wawrzyniak

Keyword(s):

Tax Burden ◽

Tax Rates ◽

The European Union ◽

Corporate Tax ◽

Effective Tax Rates ◽

Tax Rate ◽

Advantages And Disadvantages ◽

Company Taxation ◽

Statutory Tax Rate ◽

The Eu

This paper investigates different measures of corporate tax burden ranging from the most basic ones such as the statutory tax rate to the effective tax rates. Each of these measures has advantages and disadvantages and they may lead to different rankings of countries. One of the reasons lies the fact that they measure different things. The comparison of the statutory tax rates to the effective ones for the EU-27 during the period of 1998-2009 sometimes reveals very significant differences between these indicators. Taking this into consideration, the paper suggests that corporate tax burden analysis should not be limited to the most basic and readily available measure in the form of the statutory tax rate. Different measures are tailored to answer different research questions. Moreover, the article presents changes of company taxation for the EU-27 within 1998-2009.

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PENGARUH SOSIALISASI PERPAJAKAN, TARIF PAJAK, SANKSI PERPAJAKAN, DAN KESADARAN PERPAJAKAN TERHADAP KEPATUHAN PELAPORAN SPT TAHUNAN WAJIB PAJAK ORANG PRIBADI (Studi Empiris Pada KPP Pratama Jayapura)

JURNAL AKUNTANSI DAN KEUANGAN DAERAH ◽

10.52062/jakd.v14i1.1446 ◽

2020 ◽

Vol 14 (1) ◽

Author(s):

Marisa Setiawati Muhamad ◽

Meinarni Asnawi ◽

Bill J.C Pangayow

Keyword(s):

Sampling Technique ◽

Partial Least Square ◽

Least Square ◽

Tax Rates ◽

Tax Rate ◽

Test Tool ◽

Annual Reporting ◽

Convenience Sampling ◽

The Individual ◽

Tax Reporting

This study aims to analyze the influence of taxation socialization, tax rates, tax sanctions, and tax awareness on tax reporting compliance Annual taxpayer person. Study at KPP Pratama Jayapura. Data collection in this study is to use questionnaires to individual taxpayers in KPP Pratama Jayapura. The sampling technique used in this research is convenience sampling. Data analysis techniques using Partial Least Square (PLS) using Smart PLS 3.0 software. Based on the results ofanalysis by using PLS test tool shows that there is influence between taxation on taxation awareness. There is an influence between taxation socialization, tax rate and tax awareness on tax reporting compliance annual taxpayer personal person. While the tax sanction does not affect the taxpayer annual reporting of the individual taxpayers. Tax awareness may interfere with the socialization of annual taxpayer's annual reporting compliance

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The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

American Economic Journal Economic Policy ◽

10.1257/pol.20150378 ◽

2018 ◽

Vol 10 (2) ◽

pp. 272-301 ◽

Cited By ~ 9

Author(s):

Eric Ohrn

Keyword(s):

The United States ◽

Financial Policy ◽

Tax Rates ◽

Corporate Tax ◽

Tax Rate ◽

Investment Financing ◽

Point Reduction ◽

Accelerated Depreciation ◽

Tax Expenditure ◽

Quasi Experimental

This study estimates the investment, financing, and payout responses to variation in a firm's effective corporate income tax rate in the United States. I exploit quasi-experimental variation created by the Domestic Production Activities Deduction, a corporate tax expenditure created in 2005. A 1 percentage point reduction in tax rates increases investment by 4.7 percent of installed capital, increases payouts by 0.3 percent of sales, and decreases debt by 5.3 percent of total assets. These estimates suggest that lower corporate tax rates and faster accelerated depreciation each stimulate a similar increase in investment, per dollar in lost revenue. (JEL D22, D25, G31, G32, H25, H32)

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Faktor Penentu Tarif Pajak Efektif Pada Perusahaan Kesehatan: Sebelum dan Saat Covid-19

Jurnal Ekonomi ◽

10.24912/je.v26i3.799 ◽

2021 ◽

Vol 26 (3) ◽

pp. 412

Author(s):

Anindita D. Pinastika, Ferry Irawan

Keyword(s):

Ownership Structure ◽

Health Sector ◽

Tax Rates ◽

Corporate Tax ◽

Effective Tax Rate ◽

Tax Rate ◽

Tax Management ◽

State Tax ◽

Corporate Tax Rates ◽

The Government

The pandemic of Covid-19 had attacked and contribute to the Indonesia’ economics negatively. State tax revenues could not be achieved given the restrictions on activities that were intensified to prevent the spread of virus. Incentives issued by the government are one of the factors causing the decline in state revenues, one of which is in the form of lowering corporate tax rates. The effective tax rate used in measuring corporate tax management is tested with related-parties transaction, profitability, leverage, and ownership structure variables. The effect of this variable is then compared in 2019 and 2020 to observe whether there is a difference before and during the pandemic. The research was conducted on health sector companiesas a sector that was positively affected by the pandemic. The results of the study show that leverage has an effect on the effective tax rate (ETR) in 2020 while ownership structure has an effect on the ETR in 2019. The effective tax rate of health sector companies, which allegedly decreased due to incentives from the government, has actually increased during the pandemic.

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