scholarly journals Does tax competition make tax reform essential?

2014 ◽  
Vol 4 (2-3) ◽  
Author(s):  
Maja Klun
Keyword(s):  
Low Income ◽  
Tax Competition ◽  
Tax Policy ◽  
Tax Reform ◽  
Foreign Capital ◽  
High Income ◽  
Tax Burden ◽  
Policy Measures ◽  
National Economies ◽  
Income Taxpayers

Tax competition is generally defined as competition between national economies to increase their competitiveness and attract foreign investment by means of tax policy. Tax policy measures that tax mobile or foreign capital at significantly lower rates are known as harmful tax competition. Some recent corrections to the tax code and proposed tax amendments in Slovenia represent an attempt to relieve the burden on the taxpayer. This paper compares the taxation of high income taxpayers, low income taxpayers, taxpayers with passive income, and the taxation of businesses in Slovenia and neighbouring countries. The comparison indicates that Slovenian taxpayers with a high income have a higher tax burden than in neighbouring countries, while low income taxpayers have one of the highest burdens. The same applies to passive income. The tax burden on businesses ranks in the middle.

scholarly journals Income Taxation in U.S.: Current Trends

2020 ◽  
Vol 87 (4) ◽  
pp. 107-116
Author(s):  
N. B. Frolovа
Keyword(s):  
Economic Theory ◽  
Tax Policy ◽  
Income Tax ◽  
Tax Reform ◽  
High Income ◽  
Income Taxation ◽  
Tax Burden ◽  
Taxable Income ◽  
Essential Components ◽  
Trickle Down

Essential components of D. Trump’s tax reform and its impact on the income distribution and economic growth in U.S. are investigated. The analysis covers innovations in the system of income taxation of citizens (tax rate on income of physical persons, change in the composition of itemized and standard deductions from the taxable income, the alternative minimum income tax, limitations on the inheritance tax, and change in the mode of taxation of pass-through income). The essence of the trickle-down economic theory is explicated, with emphasizing its central role in tax policy development in the USA, which caused occurrence of common features specific to tax reforms over the last 40 years. The considerable attention is paid in this context to the experience of tax reform introduced by R. Reagan (1986); its comparative analysis with the tax reform of D. Trump shows that with respect to income taxation both are intended to provide incentives to business and reduce tax burden on the high income population strata. However, assessment of Reagan’s tax reform consequences shows that concentration of capital at the hands of businesses and high income population strata not only failed to increase employment and income, but aggravated the social and economic problems in the country, caused by revenue reduction in the American budget, the growing public debt and the enhanced social inequality in the American society. This gave experts grounds to expect an occurrence of the analogous scenario in the result of D. Trump’s tax reform. The article gives a series of short-term and medium-term projected estimates of international experts for budget losses and change in the structure of the population (household) income in US. Innovations in the system of income taxation of U.S. citizens are investigated by the results of analysis of legal norms concerning changes in the scale of tax rates and in the system of deductions from the taxable income. A number of critical comments are given about the income tax policy, based on summing up strong and weak points of the trickle-down economic theory. The most essential of them is that the policy granting more beneficial tax preferences to the well-off population strata, with their negative effects for the vertical justice of the tax burden distribution, contradicts to the ability-to-pay tax principle. Recommendations on potential testing of selected innovations on line of the taxation reform in Ukraine are given using results of the analysis.

scholarly journals Assessing the Equity and Redistributive Effects of Taxation Reforms in Nigeria

2021 ◽  
Author(s):  
Henry C. Edeh
Keyword(s):  
Low Income ◽  
Large Scale ◽  
Value Added ◽  
High Income ◽  
Living Standard ◽  
Middle Income ◽  
Variable Part ◽  
Lump Sum ◽  
Redistributive Effects ◽  
Income Taxpayers

Achieving the Sustainable Development Goals (SDGs) of poverty and inequality reduction through redistribution have indeed become critical concerns in many low- and middle-income countries, including Nigeria. Although redistribution results from the effect of tax revenue collections, micro household-level empirical analyses of the distributional effect of personal income tax (PIT) and value added tax (VAT) reforms in Nigeria have been scarcely carried out. This study for the first time quantitatively assessed both the equity and redistributive effects of PIT and VAT across different reform scenarios in Nigeria. Data used in this study was mainly drawn from the most recent large scale nationally representative Nigeria Living Standard Survey, conducted in 2018/2019. The Kakwani Index was used to calculate and compare the progressivity of PIT and VAT reforms. A simple static micro-simulation model was employed in assessing the redistributive effect of PIT and VAT reforms in the country. After informality has been accounted for, the PIT was found to be progressive in the pre- 2011 tax scheme, but turned regressive in the post-2011 tax scheme. It was also discovered that the newly introduced lump sum relief allowance in the post-2011 PIT scheme accrues more to the high-income than to the low-income taxpayers – confirming the regressivity of the current PIT scheme. However, the study further shows (through counterfactual simulations) that excluding the relatively high-income taxpayers from sharing in the variable part of the lump sum relief allowance makes PIT progressive in the post-2011 scheme. The VAT was uncovered to be regressive both in the pre-2020 scheme, and in the current VAT reform scheme. Further, after putting informality into consideration, the PIT was found to marginally reduce inequality but increase poverty in the pre-2011 scheme. The post-2011 PIT scheme reduced inequality and increased poverty, but by a smaller proportion – confirming a limited redistribution mainly resulting from the concentration of the lump sum relief allowance at the top of the distribution. However, if the variable part of the lump sum relief allowance is provided for ‘only’ the low-income taxpayers below a predefined income threshold, the post-2011 PIT scheme becomes largely redistributive. VAT was uncovered to marginally increase inequality and poverty in the pre-2020 scheme. Though the current VAT scheme slightly increased inequality, it considerably increased poverty in the country. It is therefore suggested that a better tax reform, with well-regulated relief allowance and differentiated VAT rates, will help to enhance the equity and redistribution capacity of the Nigeria tax system.

scholarly journals The Structure of the Tax System Versus the Level of Taxation: An Evaluation of the 1986 Act

1992 ◽  
Vol 6 (1) ◽  
pp. 59-68 ◽  
Author(s):  
J. Gregory Ballentine
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Tax Reform ◽  
High Income ◽  
Tax Structure ◽  
Corporate Tax ◽  
Policy Goal ◽  
Tax System ◽  
System Versus ◽  
The Future

In this paper, I assess the 1986 Tax Reform Act relative to the tax system that might have evolved over the several years following 1986 had that particular tax reform not been enacted. Had tax reform not been enacted, I believe that the pattern of steady tax increases, particularly corporate tax increases and tax increases on high-income individuals such as occurred in the 1982 and 1984 tax acts would have continued. I also believe that the 1986 Tax Reform Act introduced an income tax system that will be quite stable; broad changes, in particular changes that raise a large amount of income tax revenues, are unlikely for many years. So I am comparing the tax structure of the 1986 Tax Reform Act to a system that, in part, has an inferior structure, but that provides more revenues. Since I believe that the most important tax policy goal in 1986 and later should have been to raise revenues, not to revise the structure of the tax system, I believe that the 1986 Tax Reform Act was harmful. Tax reform not only did not raise revenues, it has made it more difficult to raise revenues in the future, without providing significant offsetting benefits.

scholarly journals Political tax cycles: Cyclicality of the tax burden in election periods

2021 ◽  
Vol 7 (2) ◽  
pp. 193-205
Author(s):  
K. V. Rudy ◽  
◽  
Keyword(s):  
Low Income ◽  
Political Development ◽  
Developed Countries ◽  
High Income ◽  
Political Regime ◽  
Annual Data ◽  
Tax Burden ◽  
Political Systems ◽  
Factor Regression ◽  
Similar Dynamic

The article discusses changes in the tax burden in election and post-election years in countries with different levels of economic and political development. The study uses the data on 121 countries for the period between 1991 and 2019 to test two hypotheses: 1) in election years, governments tend to boost spending while in post-election years government expenditures decline, which determines a similar dynamic of the tax burden; 2) in election years the tax burden decreases and in post-election years it either increases or decreases at a slower rate than in election periods. Methodologically, the study relies on multi-factor regression analysis of panel data. As a result, the first hypothesis is confirmed for high-income countries where the governments increase their spending to ensure the incumbent’s re-election and cut their expenditures after the election. In developed countries, in election years, the government’s spending was 0.4% higher than in other periods. In developed countries, governments were motivated to raise rather than reduce the tax burden in order to compensate for their increased expenditures. No common pattern of declining tax burden in election periods was detected for all observed countries, for groups of countries by income level (high-income, middle- or low-income) or for groups of countries by political regime type (democratic and non-democratic– hybrid or authoritarian). However, the analysis of the annual data on taxes has shown that the decline in the tax burden can occur in countries with developing economic and political systems as was the case with Armenia, Russia and Ukraine in 1992–2019. In general, the findings demonstrate that the governments are more prone to using monetary and fiscal rather than tax instruments in election periods.

scholarly journals Inequality-Reducing Effects of Tobacco Tax Increase: Accounting for Behavioral Response of Low-, Middle-, and High-Income Households in Serbia

2021 ◽  
Vol 18 (18) ◽  
pp. 9494
Author(s):  
Marko Vladisavljević ◽  
Jovan Zubović ◽  
Mihajlo Đukić ◽  
Olivera Jovanović
Keyword(s):  
Low Income ◽  
Behavioral Response ◽  
Tobacco Consumption ◽  
High Income ◽  
Tax Burden ◽  
Household Expenditures ◽  
Income Groups ◽  
Tobacco Tax ◽  
Positive Effect ◽  
Low Income Households

While previous research has indicated that increasing tobacco excises is a crucial instrument for lowering tobacco demand, this policy has been criticized for its alleged regressive impact on the poor. However, this critique does not take into account the behavioral response, i.e., decrease in consumption that occurs after excises and prices increase. In this paper, we examine the effect of cigarettes’ price increase on tobacco consumption, household expenditures, and tax burdens in three income groups and provide empirical arguments on the regressivity/progressivity effects of tobacco tax increase. Estimated elasticities indicate that all groups decrease their cigarettes demand with increasing prices, with demand decrease stronger for low- than for middle- and high-income households. Results further suggest that increasing tobacco excises (1) decreases tobacco expenditure of low-income households, which increases their productive consumption, such as on food, clothes, etc., and (2) redistributes the tobacco tax burden from low- to high-income households. Therefore, excise increase policies do not have an adverse effect on the position of the low-income households; on the contrary, they lower their cigarettes expenditure and their tax burden, while lower cigarettes consumption has an additional, positive effect on their health, which attenuates future inequalities.

Book Reviews

2017 ◽  
Vol 55 (4) ◽  
pp. 1624-1626
Keyword(s):  
Low Income ◽  
Tax Policy ◽  
Tax Reform ◽  
Tax Compliance ◽  
College Attendance ◽  
Capital Gains ◽  
Policy Implications ◽  
Economic Research ◽  
Status Report ◽  
The University

Amanda Griffith of Wake Forest University reviews “The Economics of Tax Policy,” by Alan J. Auerbach and Kent Smetters. The Econlit abstract of this book begins: “Eleven papers, prepared for a conference held at the Brookings Institution in December 2015, plus commentary, present nontechnical reviews of insights gained from recent economic research that can inform the policy process and provide an overview of the major areas of tax analysis. Papers discuss tax reform in a changing economy; effects of income-tax changes on economic growth; environmental taxation; tax compliance and enforcement—an overview of new research and its policy implications; economic and distributional effects of tax-expenditure limits; tax benefits for college attendance; tax policy toward low-income families; the economics of corporate- and business-tax reform; US capital gains and estate taxation—a status report and directions for a reform; tax policy and retirement savings; and fundamental tax reform—a comparison of three options. Auerbach is Robert D. Burch Professor of Economics and Law and Director of the Burch Center for Tax Policy and Public Finance at the University of California, Berkeley. Smetters is Boettner Chair Professor with the Wharton School at the University of Pennsylvania.”

scholarly journals Evaluation of vehicle taxation in the Republic of Latvia by the method of variant optimization using relative single indexes

2020 ◽  
Author(s):  
Alexey Leontyev ◽  
◽  
Galina Reshina ◽  
Keyword(s):  
European Commission ◽  
Low Income ◽  
Social Stratification ◽  
Tax Reform ◽  
Current Situation ◽  
Tax Burden ◽  
Tax Rates ◽  
Taxation Policy ◽  
Fairness And Efficiency ◽  
The Republic

The European Commission has evaluated the consequences of the Latvian tax reform in 2018 and declared that the set target of decreasing tax burden for people with low income was not reached, yet the tax reform continuing implementation caused even greater social stratification. The goal of the study was to develop method for determining the rational tax on vehicles based on criteria of fairness and efficiency using an analytical approach. To develop such a method for vehicle taxation, relative single indexes approach as a part of method of variant optimization was used based on relative fuel equivalent coefficient. To analyse the current situation in Latvia and show possible ways of improving it, scenario analysis (three controlling cases) and mathematical modelling by using the developed method were carried out. Analysis of the first controlling case showed that the current situation in Latvia's vehicle taxation policy is not efficient enough from the point of the combination of fairness and efficiency. To improve the situation and achieve zone of optimum (the third controlling case) it is possible to shift tax burden partially from local taxpayers to taxpayers with foreign-registered vehicles. To comply with the recommendation of the European Commission, it is also recommended to set fairness as a primary criterion and make the system more favourable to the taxpayer (when operating in the zone of optimum). It can be achieved by using annual mileage as a base to determine the tax. If recommendations would be implemented partially, it is possible to reach the state (the second controlling case), where vehicle taxation is becoming optimal, yet any change in tax rates or procedures separately will lead to ineffective or unfair solutions. Overall the developed method allows to analyse and forecast most of the changes in vehicle taxation.

scholarly journals Taxation with Mobile High-Income Agents: Experimental Evidence on Tax Compliance and Equity Perceptions

Games ◽  
2019 ◽  
Vol 10 (4) ◽  
pp. 42
Author(s):  
Sandro Casal ◽  
Veronika Grimm ◽  
Simeon Schächtele
Keyword(s):  
Low Income ◽  
Tax Compliance ◽  
High Income ◽  
Random Allocation ◽  
Allocation Mechanism ◽  
Treatment Variation ◽  
Regressive Tax ◽  
Compliance Decisions ◽  
Information Treatment ◽  
Income Taxpayers

In a laboratory experiment on tax compliance, we model a situation in which high-income taxpayers can leave a tax system that finances a public good. We compare low-income taxpayers’ compliance decisions and equity perceptions across treatments in which they are informed or not informed about the mobility option of high-income taxpayers. This allows us to test if low-income taxpayers regard the mobility option as a rationale for implementing a regressive tax schedule. To investigate if a potential `justification effect’ of the mobility option depends on the causes of income heterogeneity, we also varied whether income was allocated based on relative performance in a prior ability task or at random. Interestingly, although the performance-based allocation itself was judged to be fairer, we observed higher compliance under the random allocation mechanism. However, compliance and equity perceptions did not significantly differ by the information treatment variation, regardless of the source of income inequality. The results indicate that the threat of losing high-income taxpayers’ contributions does not lead low-income taxpayers to view the regressive tax schedule more favorably. This suggests that taking the differential mobility options as given and altering tax schedules accordingly may not be perceived as an adequate policy response.

Tax competition and the activity of the regional tax policy

2020 ◽  
pp. 5-27
Author(s):  
S. M. Drobyshevsky ◽  
N. S. Kostrykina ◽  
A. V. Korytin
Keyword(s):  
Tax Competition ◽  
Tax Policy ◽  
Fiscal Federalism ◽  
Policy Instruments ◽  
Tax Incentives ◽  
Fiscal Autonomy ◽  
Tax Legislation ◽  
Tax Exemptions ◽  
Open Question ◽  
Regional Budgets

The problem of efficiency of regional tax expenditures is an actual issue of the fiscal policy and fiscal federalism in Russia. A large fiscal autonomy allows federal subjects to realize a more active tax policy to attract new investments. One cannot claim current fiscal powers of the Russian regions to be wide. However, not all the regions use even existing tax policy instruments. Moreover, out of the regions that use them only few provide incentives to stimulate investment decisions. Others use regional tax measures to support businesses that already have strong positions in the region. And it is an open question whether such tax incentives are efficient. On the other hand, an aggressive tax competition for investors can also be wasteful for regional budgets. In this paper, we calculate indicators that characterize the depth and scope of tax exemptions provided at the regional level. The calculations are based on the open tax statistics. Through the analysis of the tax legislation as well as the economic structure of selected regions, we reveal the inducements of their higher activity: federal regional tax policy, tax competition or benefits for budget-forming companies of the region.

SATUAN TIMBULAN DAN KOMPOSISI SAMPAH DOMESTIK KABUPATEN TANAH DATAR

Jurnal Dampak ◽  
2014 ◽  
Vol 11 (1) ◽  
pp. 28 ◽  
Author(s):  
Yommi Dewilda ◽  
Yeggi Darnas
Keyword(s):  
Low Income ◽  
High Income ◽  
Income Data

Penelitian ini bertujuan untuk mendapatkan data timbulan dan komposisi sampah domestik di Kabupaten Tanah Datar serta dapat membandingkan perbedaan timbulan dan komposisi sampah yang dihasilkan berdasarkan tingkat pendapatan masyarakat (High income, Medium income dan Low income). Data timbulan dan komposisi sampah diperlukan dalam perencanaan dan pengembangan sistem pengelolaan sampah. Sampling timbulan dan jumlah sampling dilakukan berdasarkan SNI 19-3964-1994. Hasil penelitian timbulan sampah domestik dalam satuan berat 0,232 kg/o/h dan dalam satuan volume 3,646 l/o/h. Berdasarkan tingkat pendapatan dalam satuan berat High Income (HI) 0,308 kg/o/h, Medium Income (MI) 0,198 kg/o/h dan Low Income (LI) 0,190 kg/o/h dalam satuan volume HI 4,269 l/o/h, MI 3,835 l/o/h dan LI 2,835 l/o/h. Timbulan sampah yang dihasilkan penduduk dengan High Incame lebih besar dibandingkan dengan penduduk dengan pendapatan Medium Income dan Low Income. Komposisi sampah domestik untuk sampah basah 75,5%; sampah plastik 16,6%; sampah kertas 5,3%; sampah tekstil 0,8%; sampah kayu 0,3%; sampah kaca 0,7%; sampah logam ferrous 0,2%; sampah logam non ferrous 0,1%; dan sampah lain-lain 0,5%.Kata kunci: sampah domestik, komposisi sampah, timbulan Sampah

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