Time to Retire? The Effect of State Fiscal Policies on Retirement Decisions

2011 ◽  
Vol 101 (3) ◽  
pp. 35-39 ◽  
Author(s):  
Tami Gurley-Calvez ◽  
Brian Hill
Keyword(s):  
State Level ◽  
Disposable Income ◽  
Sales Tax ◽  
Fiscal Policies ◽  
Tax Rates ◽  
State Spending ◽  
Tax Rate ◽  
Percentage Point Increase ◽  
Point Increase ◽  
Retirement Decisions

Our research addresses the importance of state fiscal policies on the probability of retirement using a panel of individual tax return data. Results indicate that a one percentage point increase in the income or sales tax rate reduces the probability of retirement by about 8.7 percent. The evidence suggests that state spending might also affect retirement decisions but magnitudes are inconclusive. In general, the results suggest that the income effect dominates; that is, higher tax rates at the state-level reduce disposable income and decrease the probability of retiring. Results are similar in models examining single and married filers separately.

scholarly journals Sales Taxes and Internet Commerce

2014 ◽  
Vol 104 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Liran Einav ◽  
Dan Knoepfle ◽  
Jonathan Levin ◽  
Neel Sundaresan
Keyword(s):  
Sales Tax ◽  
Internet Commerce ◽  
Tax Rate ◽  
Aggregated Data ◽  
Percentage Point Increase ◽  
Sales Taxes ◽  
Online Purchases ◽  
Point Increase ◽  
Internet Retail

We estimate the sensitivity of Internet retail purchasing to sales taxes using eBay data. Our first approach exploits the fact that a seller's location—and therefore the applicable tax rate—is revealed only after a buyer has expressed interest in an item. We document how adverse tax “surprises” reduce the likelihood of purchase and shift subsequent purchases toward out-of-state sellers. We then use more aggregated data to estimate that every one percentage point increase in a state's sales tax increases online purchases by state residents by almost 2 percent, while decreasing their online purchases from state retailers by 3–4 percent. (JEL H71, L81, L86)

scholarly journals The Influence of Corporate Income Taxes on Investment Location: Evidence from Corporate Headquarters Relocations

2021 ◽  
Author(s):  
Travis Chow ◽  
Sterling Huang ◽  
Kenneth J. Klassen ◽  
Jeffrey Ng
Keyword(s):  
Income Tax ◽  
Strong Support ◽  
The State ◽  
Economic Consequences ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Tax Rate ◽  
Percentage Point Increase ◽  
Point Increase ◽  
State Income

This study examines the effects of jurisdictions’ corporate taxes and other policies on firms’ headquarters (HQ) location decisions. Using changes in state corporate income tax rates across time and states as the setting, we find that a one-percentage-point increase in the HQ state corporate income tax rate increases the likelihood of firms relocating their HQ out of the state by 16.8%, and an equivalent decrease in the HQ state rate decreases the likelihood of HQ relocations by 9.1%. Exploiting the unique tax policy features within the state apportionment system lends strong support to the interpretation that taxation drives this effect. Our analyses also demonstrate that state income tax features affect the destination of the HQ move. We contribute to the literature on corporate decision making by showing how state income taxation affects a real corporate decision that has significant economic consequences for the company and the state. This paper was accepted by Brian Bushee, accounting.

The Effect of Taxation and Corruption on Firm Growth: An Empirical Investigation for Vietnam

2016 ◽  
pp. 5-29
Author(s):  
Bich Le Thi Ngoc
Keyword(s):  
International Development ◽  
Firm Growth ◽  
Empirical Investigation ◽  
Manufacturing Firms ◽  
Economic Management ◽  
Tax Rate ◽  
Percentage Point Increase ◽  
Percentage Points ◽  
Point Increase ◽  
The Impact

The aim of this study is to analyze empirically the impact of taxation and corruption on the growth of manufacturing firms in Vietnam. The study employed pooled OLS estimation and then instrument variables with fixed effect for the panel data of 1377 firms in Vietnam from 2005 to 2011. These data were obtained from the survey of the Central Institute for Economic Management and the Danish International Development Agency. The results show that both taxation and corruption are negatively associated with firm growth measured by firm sales adjusted according to the GDP deflator. A one-percentage point increase in the bribery rate is linked with a reduction of 16,883 percentage points in firm revenue, over four and a half times bigger than the effect of a one-percentage point increase in the tax rate. From the findings of this research, the author recommends the Vietnam government to lessen taxation on firms and that there should be an urgent revolution in anti-corruption policies as well as bureaucratic improvement in Vietnam.

Do State Sales Taxes Crowd Out Local Option Sales Taxes?

2018 ◽  
Vol 18 (3) ◽  
Author(s):  
Gregory S. Burge ◽  
Cynthia L. Rogers
Keyword(s):  
Local Governments ◽  
Sales Tax ◽  
Tax Rates ◽  
Tax Base ◽  
Tax Rate ◽  
Sales Taxes ◽  
Fiscal Externalities ◽  
Crowd Out ◽  
State And Local ◽  
Fiscal Spillovers

Abstract Currently, sales taxes are imposed at both the state and local levels in 37 US states. In these environments, vertical tax competition occurs as governments share a common sales tax base, and local jurisdictions have autonomy over sales tax rates. As cash-strapped states look to sales taxes for additional revenues, local governments may worry about potentially adverse revenue impacts, as consumers react to combined tax rate increases. This study examines state-municipal and county-municipal fiscal spillovers using an empirical approach that accounts for endogenous tax policy leadership and voter tax fatigue. Employing comprehensive longitudinal data from Oklahoma, we find that state tax hikes significantly crowd out future rate increases for the large group of jurisdictions that are designated as followers. Leader jurisdictions are not found to display crowd-out tendencies, a result that is consistent with recent work suggesting that leaders may be less influenced by vertical fiscal externalities than other jurisdictions.

scholarly journals Tax Sensitivity and Home State Preferences in Internet Purchasing

2009 ◽  
Vol 1 (2) ◽  
pp. 53-71 ◽  
Author(s):  
Glenn Ellison ◽  
Sara Fisher Ellison
Keyword(s):  
Discrete Choice ◽  
Tax Avoidance ◽  
State Level ◽  
Strong Relationship ◽  
Sales Tax ◽  
Tax Rates ◽  
Comparison Site ◽  
Price Comparison ◽  
Memory Modules ◽  
Retail Demand

Data on memory modules sales are used to explore aspects of e-retail demand. Aggregate sales are examined in state-level regressions. Discrete choice techniques are used to examine (incomplete) hourly sales data from a price comparison site. We find a strong relationship between e-retail sales to a given state and sales tax rates that apply to purchases from offline retailers, suggesting substantial online-offline substitution and the importance of tax avoidance motives. Geography matters in two ways: consumers prefer purchasing from firms in nearby states and appear to have a separate preference for buying from in-state firms. (JEL D12, H25, H71, L81)

Impact of the Sales Tax Rate on its Base: Evidence from a Small Town

1986 ◽  
Vol 14 (3) ◽  
pp. 329-338 ◽  
Author(s):  
John L. Mikesell ◽  
C. Kurt Zorn
Keyword(s):  
Local Governments ◽  
Small Town ◽  
Local Economy ◽  
Sales Tax ◽  
Tax Rates ◽  
Small Cities ◽  
Tax Rate ◽  
Share Model ◽  
Short Run ◽  
The Impact

Local governments and businesses fear that increased local sales tax rates will induce losses to the local economy, even inducing losses so severe that no additional revenue will result from a higher tax rate. Earlier works by Fisher, Hamovitch, and Mikesell have examined sales loss in metropolitan areas, typically finding significant but not overwhelming effects. Those results do not address the question for small cities and typically are complicated by the expenditure effects resulting from the increased tax revenues. The present analysis uses unique data for a small town to examine the impact of a temporary sales tax rate increase with a retail sales share model. The evidence shows a significant but small sales impact that did not endure (a differential of 1% would lower city sales by 3.07%) and no impact on vendor location. The unfavorable rate differential produced a short-run effect, but not economic disaster.

scholarly journals The Tax Gradient: Spatial Aspects of Fiscal Competition

2015 ◽  
Vol 7 (2) ◽  
pp. 1-29 ◽  
Author(s):  
David R. Agrawal
Keyword(s):  
Sales Tax ◽  
Fiscal Competition ◽  
Tax Rates ◽  
Nash Game ◽  
Tax Rate ◽  
Local Taxes ◽  
Percentage Points ◽  
Driving Time ◽  
State Tax ◽  
Tax State

State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low state tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all local sales tax rates, local tax rates on the lowtax side of the border are 1.25 percentage points higher, reducing the differential in state tax rates by over three-quarters. A ten minute increase in driving time from the nearest high-tax state lowers a border town's local tax rate by 6 percent. (JEL H25, H71, H73, H77)

scholarly journals Land value is a progressive and efficient property tax base: Evidence from Victoria

2019 ◽  
Author(s):  
Cameron Murray ◽  
Jesse Hermans
Keyword(s):  
Capital Investment ◽  
Property Tax ◽  
Property Taxes ◽  
Tax Rates ◽  
Land Value ◽  
Property Value ◽  
City Governments ◽  
Tax Base ◽  
Percentage Point Increase ◽  
Point Increase

Property taxes are a common revenue source for city governments. There are two property tax bases available—land value (site value, SV), or total property value (capital improved value, CIV). The choice of property tax base has implications for both the distribution and efficiency of the tax. We provide new evidence in favour of SV being both the more progressive and efficient property tax base. First, we use three Victorian datasets at different levels of geographic aggregation to model the SV-CIV ratio as a function of various household income measures. At all three levels, a higher SV-CIV ratio occurs in areas with higher incomes, implying that SV is the more progressive property tax base. Our range of results suggests that a one percent increase in the income of an area is associated with a 0.10 to 0.57 percentage point increase in the SV-CIV ratio. Second, we use historical council data to conduct a difference-in-difference analysis to compare the effect of switching from a CIV to SV tax base on the number of building approvals and value of construction investment. We find that switching from CIV to SV as a property tax base is associated with a 20% increase in the value of new residential construction. This is consistent with the view that changes to land value tax rates are non-neutral with respect to the timing of capital investment on vacant and under-utilised land, which we also demonstrate theoretically.

scholarly journals DOES THE RECENTLY IMPLEMENTED REGULATION ON COUNTRY-BY-COUNTRY REPORTING DETER TAX AVOIDANCE?

2020 ◽  
Vol 17 (1) ◽  
Author(s):  
Nala Kurniawan ◽  
◽  
Anggari Saputra ◽  
Keyword(s):  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Empirical Literature ◽  
Tax Rates ◽  
Profit Shifting ◽  
Percentage Point Increase ◽  
Point Increase ◽  
Private Disclosure ◽  
Tax Payments

To adhere with Base Erosion and Profit Shifting (BEPS) Action 13, Indonesia enacted regulations concerning Transfer Pricing Documentation and Country-by-Country Reporting (CbCR) to address the issue of tax avoidance. Those regulations introduced the requirement of CbCR in Indonesia, where Multinational Enterprises (MNEs) operating in Indonesia are required to provide tax authorities with geographic breakdown of their profitability, tax payments, and activities wherever they operate. Using the newly implemented CbCR in Indonesia as a treatment for private disclosure requirement, this study examines the effect of CbCR on MNEs tax avoidance. Employing EUR 750 million consolidated revenue threshold for disclosure and utilizing regression discontinuity design as well as difference-in-differences analysis, we document a 4-8 percentage point increase in effective tax rates among affected MNEs, thus reflecting a decrease in tax avoidance in treatment firms. Our findings contribute (i) to the recent empirical literature on how CbCR as a private disclosure affects corporate tax avoidance behavior and (ii) to the policy evaluation whether CbCR regulation has achieved its objective.

India’s Transition from State Level Sales Tax to Value Added Tax (VAT)

2014 ◽  
Vol 1 (1) ◽  
Author(s):  
Vandana Jain
Keyword(s):  
Value Added ◽  
State Level ◽  
Sales Tax ◽  
Tax Revenue ◽  
Tax Rates ◽  
Value Added Tax ◽  
Commodity Taxation ◽  
Tax Reforms ◽  
Tax Regimes ◽  
Phase Out

An outstanding development in the sphere of State finances since Independence has been the precipitous growth in the relative revenue significance of sales tax levied under entry 54 of List II in the Seventh Schedule of the Constitution. It has grown considerably in depth and coverage, and forms the mainstay of States. tax revenue. Prior to tax reforms initiated in early 1990s, sales tax was characterised by a multiplicity of tax rates and exemptions, lack of uniformity across States, large number of exemptions and concessions, and differing procedures for tax collection. In mid-1990s, most states had agreed to phase out the incentive-related exemptions and implement floor rates of sales tax. As part of the nation-wide efforts to redesign commodity taxation and the implementation of CENVAT at the level of the Centre, many States have modified their sales tax regimes to launch a state level VAT under the scheme prepared by the Empowered Committee for this purpose. This paper explains and examines various problems associated with sales tax and its switch over to Value Added Tax (VAT) in recent years.

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