scholarly journals Entrepreneurial Taxation with Endogenous Entry

2014 ◽  
Vol 6 (2) ◽  
pp. 126-163 ◽  
Author(s):  
Florian Scheuer
Keyword(s):  
General Equilibrium ◽  
Optimal Taxation ◽  
Production Efficiency ◽  
Differential Treatment ◽  
Labor Income ◽  
Endogenous Entry ◽  
Tax Rates ◽  
Firm Formation ◽  
Tax System ◽  
Optimal Policies

I analyze the optimal taxation of profits and labor income under endogenous firm formation. Individuals differ in their skill and cost of setting up a firm, and can become workers or entrepreneurs. A tax system in which profits and labor income are subject to the same schedule uses general equilibrium effects through wages to indirectly redistribute across occupations. Optimal policies can involve low tax rates at the top and distortions of firms' input choices. However, these properties disappear under a differential treatment of profits and labor income. Then, redistribution is achieved directly through taxes and production efficiency is always optimal. (JEL H21, H24, H25, J24, L25, L26)

scholarly journals Nonlinear Tax Incidence and Optimal Taxation in General Equilibrium

Econometrica ◽  
2020 ◽  
Vol 88 (2) ◽  
pp. 469-493 ◽  
Author(s):  
Dominik Sachs ◽  
Aleh Tsyvinski ◽  
Nicolas Werquin
Keyword(s):  
General Equilibrium ◽  
Optimal Taxation ◽  
Income Taxes ◽  
Tax Incidence ◽  
Labor Income ◽  
Tax Rates ◽  
Tax System ◽  
Marginal Tax Rates ◽  
Optimal Taxes

We study the incidence of nonlinear labor income taxes in an economy with a continuum of endogenous wages. We derive in closed form the effects of reforming nonlinearly an arbitrary tax system, by showing that this problem can be formalized as an integral equation. Our tax incidence formulas are valid both when the underlying assignment of skills to tasks is fixed or endogenous. We show qualitatively and quantitatively that contrary to conventional wisdom, if the tax system is initially suboptimal and progressive, the general‐equilibrium “trickle‐down” forces may raise the benefits of increasing the marginal tax rates on high incomes. We finally derive a parsimonious characterization of optimal taxes.

THE PECULIARITIES OF INDUSTRIAL ENTERPRISES’ PROFIT TAXATION IN A DIFFERENTIATED APPROACH

2021 ◽  
Vol 7 (2) ◽  
pp. 219-242
Author(s):  
Valeria B. DUBKOVA
Keyword(s):  
Optimal Taxation ◽  
Production Efficiency ◽  
Tax Rates ◽  
Effective Mechanism ◽  
Tax Rate ◽  
Surplus Value ◽  
Industrial Enterprises ◽  
Modern System ◽  
Economic Politics ◽  
Industrial Level

This article studies the problem of improving enterprise profit taxation, the ways to solve it, and one of the main problems of the modern system of the enterprises taxation — how it is connected to the production efficiency. By solving it, we can determine the differentiation of the tax rates to the enterprises’ profit. Within its methodological framework, the author proposes to use the theory of surplus value. In order to spread the global methods for solving the issues of improving the taxation profit of enterprises and ensuring the economic efficiency and growth, the principles of neoclassic marginal theory are used. The system of indicators — signs and criteria — provides evidence for differentiating industrial enterprises into groups for a more optimal taxation of their profits. The author provides suggestions for forming the rate of the profit tax to stimulate the increase of production efficiency and reinvestment of funds for its development. The algorithm for calculating the profit tax rate assumes using the index of the norms of surplus value — profitableness of labor. This article proposes using a matrix for classifying industrial enterprises into groups, defining the level of the tax rates to profit for each of them based on the developed algorithm together with the level of production efficiency for 2018. For industrial enterprises, special industrial level of indicators — the signs differentiation — are considered: the structure of capital, the standard of profit, the profitableness of labor, and the results of their profit taxation using the method of free balance, the normative method, the modern and the proposed tax profit systems. In the case of the industrial enterprises, the relevance of the proposed reforms of the taxation of profit is explained. The results of research constitute the methodological basis of developing a more effective mechanism of taxing enterprises’ profit, which is especially necessary when realizing anti-crisis economic politics.

scholarly journals Toward a Comprehensive Tax Reform for Italy

2020 ◽  
Vol 20 (37) ◽  
Author(s):  
Emile Cammeraat ◽  
Ernesto Crivelli
Keyword(s):  
Substantial Reduction ◽  
Labor Income ◽  
Tax Burden ◽  
System Reform ◽  
Tax Rates ◽  
Tax Reforms ◽  
Tax System ◽  
Middle Income ◽  
Neutral Base ◽  
Comprehensive Reform

This paper evaluates elements of a comprehensive reform of the Italian tax system. Reform options are guided by the principles of reducing complexity, broadening the tax base, and lowering marginal tax rates, especially the tax burden on labor income. The revenue and distributional implications of personal income and property tax reforms are assessed with EUROMOD, while a microsimulation model is developed to evaluate VAT reform options. Simulations suggest that a substantial reduction in the tax burden on labor income can be obtained with a revenue-neutral base-broadening reform that streamlines tax expenditures and updates the property valuation system. In addition, a comprehensive reform would benefit low- and middle-income households the most, by lowering significantly their overall current tax liability, which results in increased progressivity of the tax system.

The Mirrlees Review

2012 ◽  
Vol 50 (3) ◽  
pp. 781-790 ◽  
Author(s):  
Martin Feldstein
Keyword(s):  
Nobel Prize ◽  
Review Essay ◽  
Optimal Taxation ◽  
Comprehensive Analysis ◽  
Tax Revenue ◽  
Deadweight Loss ◽  
Tax Rates ◽  
Tax System ◽  
American Reader

The Mirrlees Review is an ambitious and comprehensive analysis of the British tax system with detailed recommendations for reform. This review essay focuses on those issues that are also likely to be of interest to an American reader. The Review has the technical sophistication that readers would expect from a team of ten economists, chaired by James Mirrlees, the distinguished theorist who received the Nobel Prize for his contributions to the theory of optimal taxation. But it is written for a broader audience, explaining concepts like deadweight loss and the elasticity of tax revenue with respect to tax rates and doing so without any mathematics. (JEL D64, E21, E62, H24, H25)

scholarly journals PENGARUH PERUBAHAN TARIF, METODE PENGHITUNGAN DAN MODERNISASI SISTEM PAJAK TERHADAP KEPATUHAN WAJIB PAJAK UMKM DENGAN KEADILAN PAJAK SEBAGAI VARIABEL MODERASI

2021 ◽  
Vol 5 (2) ◽  
pp. 160-175
Author(s):  
Ade Nuryunita Thahir ◽  
Iman Karyadi ◽  
Yanis Ulul Azmi
Keyword(s):  
Regression Analysis ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Tax Rates ◽  
Tax System ◽  
Food And Beverage ◽  
Positive Effect ◽  
Interaction Test

This research was conducted to determine and test the effect of changes in tax rates (X1), tax calculation methods (X2) and modernization of the tax system (X3) on MSME taxpayer compliance with tax justice as a moderating variable (M). As for the population in this study, the UMKM taxpayers in the food and beverage sector are registered at the Surabaya City Trade Office. Data collection uses purposive sampling method, provided that the taxpayer has a NPWP and has a gross turnover (turnover) in one tax year not to exceed Rp4.8 billion. The samples used in this study were 80 respondents. Data analysis in this study used multiple linear regression and interaction regression with the help of SPPS version 17. The results of the study using multiple linear regression analysis showed that partially changes in tax rates did not have a positive effect and insignificant on taxpayer compliance, while the tax calculation method and tax system modernization partially have a positive and significant effect on taxpayer compliance. Multiple regression analysis with the interaction test for variable changes in tax rates to taxpayer compliance with tax justice as a moderating variable, the method of calculating taxes against taxpayer compliance with tax justice as a moderating variable and modernization of the tax system towards taxpayer compliance with tax fairness as a moderating variable partial positive and significant effect which means that tax justice is able to moderate all the variables used in this study.

Income redistribution through taxation – how deductions undermine the effect of taxes

2018 ◽  
pp. 1-35
Author(s):  
Oliver Hümbelin ◽  
Rudolf Farys
Keyword(s):  
Real Estate ◽  
Pension Scheme ◽  
Tax Rates ◽  
Tax System ◽  
Effect Decomposition ◽  
Lump Sum ◽  
Tax Relief ◽  
Swiss Canton ◽  
Tax Deductions ◽  
Redistributive Effect

This paper shows the potential of administrative data to grant us a more complete picture of the redistributive effects of the visible (tax rates) and hidden (tax deductions) instruments of the fiscal welfare state. Based on administrative tax data from a large Swiss canton, we apply a gini-based redistributive effect decomposition to demonstrate how several taxes and deductions impact the post-tax income distribution. We show that tax deductions drastically reduce the redistributive effect of taxes because lump sum deductions in a progressive tax system lead to greater tax relief for higher income earners. Moreover, high income earners have additional options to claim deductions such as real-estate expenses or extra-mandatory payments to the pension scheme. Comparison over time furthermore shows that the role of deductions for real-estate expenses decreased. All in all, because deductions reduce the redistributive effect of taxes, they lead to higher post tax income inequality compared to a hypothetical system without deducations. The redistrubtive effect of the tax system should therefore be studied, not only with respect to tax rates, but also with respect to deductions.

scholarly journals An evaluation of the revenue side as a source of fiscal consolidation in high debt economies

2014 ◽  
Vol 41 (6) ◽  
pp. 771-788
Author(s):  
Ritwik Banerjee
Keyword(s):  
General Equilibrium ◽  
Tax Rates ◽  
Consumption Tax ◽  
Policy Makers ◽  
Revenue Generation ◽  
Content Type ◽  
Tax Rate ◽  
Labor Tax ◽  
Capital Tax ◽  
European Economies

Purpose – Unsustainable levels of debt in some European economies are causing enormous strain in the Euro area. Successful debt consolidation in high-debt economies is the single most important objective for the European policy makers. The paper aims to discuss these issues. Design/methodology/approach – The author uses a dynamic general equilibrium closed economy model to compute the dynamic Laffer curves for Portugal, Ireland, Greece and Spain for different class of taxes. The general equilibrium effects of the interaction of labor tax, consumption tax and capital tax is demonstrated. Findings – Location of each economy on its Laffer curve suggests that there exists a scope for considerable revenue generation by raising consumption and labor tax rates but no such possibilities exist for capital tax rate. Thus revenue generation with certain tax rates as instruments, holds key to successful and sustained debt reduction. Originality/value – This to the best of knowledge is one of the first papers which looks closely at the tax revenue – tax rate panel for the major deeply indebted European economies.

scholarly journals Optimal progressivity of personal income tax: a general equilibrium evaluation for Spain

SERIEs ◽  
2020 ◽  
Vol 11 (4) ◽  
pp. 407-455 ◽  
Author(s):  
Darío Serrano-Puente
Keyword(s):  
General Equilibrium ◽  
Income Tax ◽  
Optimal Level ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Negative Effects ◽  
Spanish Economy ◽  
Current Scenario ◽  
The Cost

AbstractIs the Spanish economy positioned at its optimal progressivity level in personal income tax? This article quantifies the aggregate, distributional, and welfare consequences of moving toward such an optimal level. A heterogeneous households general equilibrium model featuring both life cycle and dynastic elements is calibrated to replicate some characteristics of the Spanish economy and used to evaluate potential reforms of the tax system. The findings suggest that increasing progressivity would be optimal, even though it would involve an efficiency loss. The optimal reform of the tax schedule would reduce wealth and income inequality at the cost of negative effects on capital, labor, and output. Finally, these theoretical results are evaluated using tax microdata and describe a current scenario where the income-top households typically face suboptimal effective average tax rates.

scholarly journals THE EVOLUTION OF TAXES AND HOURS WORKED IN AUSTRIA, 1970–2005

2014 ◽  
Vol 19 (8) ◽  
pp. 1800-1815 ◽  
Author(s):  
John T. Dalton
Keyword(s):  
General Equilibrium ◽  
Growth Model ◽  
Labor Income ◽  
Marginal Tax Rate ◽  
Hours Worked ◽  
Tax Rate ◽  
Time Period ◽  
Working Age ◽  
Equilibrium Growth

Aggregate hours worked per working-age person decreased in Austria by 25% from 1970 to 2005. During the same time period, taxes increased, particularly the effective marginal tax rate on labor income. Using a standard general equilibrium growth model with taxes, I quantitatively assess the role played by the evolution of taxes in the evolution of hours worked in Austria. The model accounts for 76% of the observed decrease in hours worked per working-age person. My results are in line with other studies, which find taxes play an important role in explaining aggregate hours worked.

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