A Tax Reform Conundrum: Insights From A Survey Of Tax Professors

The George W. Bush presidency’s mandate for tax cuts, combined with predictions of substantial budget surpluses during the next ten years, is fueling two related debates:  (1) elimination of the estate tax, and (2) reduction of tax rates by reforming and simplifying the tax code.  This paper uses the results of a survey of accounting tax professors to assess opinions regarding the elimination of the estate tax, as well as, the feasibility of reducing tax rates through reform by using a flat tax.  The results of this study suggest that tax professors do not favor the repeal of the estate tax and are lukewarm to replacing the current tax system with a flat tax.

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Is This Tax Reform, or Just Confusion?

The Journal of Economic Perspectives ◽

10.1257/jep.32.4.73 ◽

2018 ◽

Vol 32 (4) ◽

pp. 73-96 ◽

Cited By ~ 14

Author(s):

Joel Slemrod

Keyword(s):

United States ◽

Tax Reform ◽

The United States ◽

The Political ◽

Political Will ◽

Tax Base ◽

Tax System ◽

The Law ◽

Jobs Act ◽

Tax Cuts

Based on the experience of recent decades, the United States apparently musters the political will to change its tax system comprehensively about every 30 years, so it seems especially important to get it right when the chance arises. Based on the strong public statements of economists opposing and supporting the Tax Cuts and Jobs Act of 2017, a causal observer might wonder whether this law was tax reform or mere confusion. In this paper, I address that question and, more importantly, offer an assessment of the Tax Cuts and Jobs Act. The law is clearly not “tax reform” as economists usually use that term: that is, it does not seek to broaden the tax base and reduce marginal rates in a roughly revenue-neutral manner. However, the law is not just a muddle. It seeks to address some widely acknowledged issues with corporate taxation, and takes some steps toward broadening the tax base, in part by reducing the incentive to itemize deductions.

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Addressing inequality and poverty with tax instruments

Economic Annals ◽

10.2298/eka1190007r ◽

2011 ◽

Vol 56 (190) ◽

pp. 7-26

Author(s):

Sasa Randjelovic ◽

Jelena Zarkovic-Rakic

Keyword(s):

Income Tax ◽

Poverty Reduction ◽

Western Europe ◽

Tax Reform ◽

Empirical Literature ◽

Tax System ◽

Distributional Effects ◽

Flat Tax ◽

Tax Rate ◽

Comprehensive Income

There is a consensus, in both academia and economic policy circles, that the reform of the personal income tax system in Serbia is necessary one. Two frequently discussed reform scenarios are East European style flat tax and the comprehensive income tax model of Western Europe. Most Central and Eastern European (CEE) countries have recently reformed their income tax systems by introducing some form of flat tax scheme, while in numerous countries of Western Europe the possibility of flat tax reform is also seriously considered. Opponents of the reform usually stress the adverse distributional effects of flat tax schemes. The aim of our paper is to contribute to the empirical literature on the distributional effects of alternative tax reform scenarios. The analysis is based on the tax and benefit micro-simulation model for Serbia (SRMOD). The results suggest that redesigning the existing income tax system so as to introduce a uniform tax rate and increase the basic allowance would somewhat reduce inequality and improve vertical inequity in taxation. On the other hand, in the case of the introduction of comprehensive income tax, considerably larger equalizing and progressivity effects would be achieved. At the same time, since in both cases redistribution will not affect the bottom decile group, no significant effects (in either cases) on poverty reduction will be achieved.

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Household Behavior and the Tax Reform Act of 1986

The Journal of Economic Perspectives ◽

10.1257/jep.1.1.101 ◽

1987 ◽

Vol 1 (1) ◽

pp. 101-119 ◽

Cited By ~ 53

Author(s):

Jerry A Hausman ◽

James M Poterba

Keyword(s):

Economic Growth ◽

Tax Reform ◽

Household Behavior ◽

Tax Rates ◽

Tax System ◽

Reform Proposal

President Reagan's May 1985 letter to Congress, accompanying his tax reform proposal, argued that the existing tax system hindered economic growth because “most Americans labor under excessively high tax rates that discourage work and cut drastically into savings.” This paper analyzes how the Tax Reform Act of 1986 affects these aspects of household behavior.

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Growth-Enhancing Corporate Tax Reform in Belgium

Nordic Tax Journal ◽

10.1515/ntaxj-2018-0004 ◽

2018 ◽

Vol 2018 (1) ◽

pp. 1-17 ◽

Cited By ~ 1

Author(s):

Ruud De Mooij ◽

Shafik Hebous ◽

Milena Hrdinkova

Keyword(s):

Public Finance ◽

Economic Growth ◽

Income Tax ◽

Tax Reform ◽

Corporate Income Tax ◽

Tax Rates ◽

Corporate Tax ◽

Tax System ◽

Corporate Tax Reform ◽

The Government

Abstract Until 2018, Belgium had a unique corporate income tax system due to its notional interest deduction, also known in public finance literature as the allowance for corporate equity. At the same time, it had one of the highest corporate tax rates in Europe at 34 percent. The latter came under severe pressure to reform and, as of 2018, the government has started to reduce the rate, gradually to reach 25 percent in 2020. The reduction is accompanied by other measures, including a limitation of the notional interest deduction. This paper argues that the lower CIT rate is likely to be conducive to economic growth. Yet, the effects on growth would have been more favorable if the notional interest deduction would have been strengthened, rather than diminished.

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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 Empirical Study on the Journey of Tax Reforms in India

COMMERCE TODAY ◽

10.29320/jnpgct.13.1.9 ◽

2019 ◽

Vol 13 (01) ◽

Author(s):

Elina Kanungo

Keyword(s):

Resource Allocation ◽

Tax Reform ◽

Tax Rates ◽

Fiscal Consolidation ◽

Tax Reforms ◽

Tax System ◽

Revenue Collection ◽

The One ◽

Taxation System ◽

Direct Tax

Reforms in the taxation system of a country are an integral part of its development. India has witnessed series of reforms in its taxation system. The tax rates have been rationalize d with simplification in the tax laws results in better compliance, ease of tax payment and better enforcement. India has witnessed reforms in both direct tax system and indirect tax system. After every reform, it becomes quite essential to measure its effectiveness. There are various parameters to measure the affects of the reforms and the tax to GDP ratio is considered to be the one. One of the major objectives of tax reform measures has been to increase total tax to GDP ratio as a means of achieving fiscal consolidation and improving resource allocation. Government of India is working to enhance its revenue collection, at the same time ensuring that cumbersome taxes do not bother the investors. This paper makes an attempt to highlight the journey of tax reforms taken place in India since the post liberalization period. The paper also highlights the tax to GDP ratio over the period of five years of study.

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A TAX REFORM PROPOSAL FOR TURKEY: FLAT TAX SYSTEM

Ekonomik Yaklasim ◽

10.5455/ey.17301 ◽

2020 ◽

Vol 31 (117) ◽

pp. 1

Author(s):

Burcu Özgün ◽

Pınar Güre

Keyword(s):

Tax Reform ◽

Tax System ◽

Flat Tax ◽

Reform Proposal

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Effects of Tax Reform on Labor Supply, Investment, and Saving

The Journal of Economic Perspectives ◽

10.1257/jep.6.1.3 ◽

1992 ◽

Vol 6 (1) ◽

pp. 3-25 ◽

Cited By ~ 24

Author(s):

Barry Bosworth ◽

Gary Burtless

Keyword(s):

Economic Growth ◽

Labor Supply ◽

Tax Policy ◽

Tax Reform ◽

Capital Formation ◽

Living Standards ◽

Tax System ◽

The U.S ◽

Tax Cuts

The U.S. tax system received two major overhauls during the 1980s: the tax cuts of 1981 and the Tax Reform Act of 1986. Supporters of both reforms argued that major changes in tax policy could boost saving, investment, labor supply, and entrepreneurship. Eventually, it was argued, such changes could reverse the slowdown in economic growth that began in the early 1970s and spur improvements in American living standards. The aim of this paper is to assess whether the goals of increased labor supply and capital formation were achieved.

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Die deutsche Steuerbelastung im internationalen Vergleich: Warum Deutschland (k)eine Steuerreform braucht

Perspektiven der Wirtschaftspolitik ◽

10.1111/1468-2516.00031 ◽

2001 ◽

Vol 2 (1) ◽

pp. 45-60 ◽

Cited By ~ 6

Author(s):

Frank Ernst-Moritz-Arndt ◽

Carsten Schmidt

Keyword(s):

Income Tax ◽

Tax Reform ◽

German Economy ◽

Tax Burden ◽

Tax Rates ◽

Capital Taxation ◽

Tax System ◽

Corporate Capital ◽

Run Up ◽

Industrialised Countries

Abstract This paper attacks the widespread view that the latest (corporate) income tax reform in Germany was urgently needed to reduce the tax burden on the German economy. In the run-up to this tax reform, the public debate focused on nominal income tax rates and hence neglected the determination of the tax base. Empirical results on effective tax burdens in OECD countries show that a reform of German (corporate) capital taxation cannot be justified on the grounds of the tax burden. The international comparison of effective average tax rates shows that the corporate tax burden in Germany steadily declined from 1980 and was in 1996 lower than in most other industrialised countries. However, we argue that not only the actual tax burden but also the complexity of a tax system determines its international competitiveness. A German tax reform was - and still is - necessary due to the lasting complexity of the tax system and the relatively high tax burden on labour.

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2018. gada nodokļu reforma uzņēmēju vērtējumā

Sabiedrība un kultūra: rakstu krājums = Society and Culture: conference proceedings - Sabiedrība un kultūra = Society and Culture ◽

10.37384/sk.2020.22.227 ◽

2021 ◽

pp. 227-233

Author(s):

Anna Medne

Keyword(s):

Economic Development ◽

Fiscal Policy ◽

Tax Reform ◽

Business Environment ◽

System Reform ◽

Tax Rates ◽

Tax System ◽

The University ◽

The Impact ◽

Made In

Economic development in the country is characterized by the growth of gross domestic product, and in Latvia it is 2.1% at the beginning of 2019. Economic development must be closely linked to the business environment, and one of its most important factor is the fiscal policy of the state and its tax system. In 2018, the tax system reform was implemented in Latvia, where significant changes were made in the taxation and methodology of its calculation. This study analyses the University Turiba Survey of Entrepreneurs conducted in 2018 and 2019, explaining the entrepreneurs’ opinion on the impact of tax reform on business environment in Latvia and the amount of taxes paid by companies. In 2019, 92% of respondents believe that the taxes for businesses are too high, demonstrating their dissatisfaction with the existing tax rates and methodology. In 2019, the business environment has been rated as good by 44% of the respondents, compared with a rise of about 10 percent in the previous year.

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