Employment Structure and the Rise of the Modern Tax System

This paper builds a new microdatabase that covers 100 countries at all income levels and long-run time series in the United States (1870–2010) and Mexico ( 1960–2010) to document how the modern tax system arises over development. I establish a new set of stylized facts, which show that the income tax exemption threshold decreases in the income distribution as a country develops, tracking growth in the employee share of employment that occurs gradually further down the income distribution. Additional evidence supports the interpretation that the rise in third-party covered income through increases in employee share drives expansions of the income tax base over development. (JEL D31, H23, H24, H71, J22, J23, N40)

EU TAX Strategy in the COVID-19 Pandemic

This article explores the EU's experience in finding tax revenues without compromising economic recovery. The EU's tax policy strategy envisages a stronger role for taxes in the development of a green, digital and inclusive Europe. It is recognized as fair to increase the tax burden on "polluters", digital and financial businesses, the largest corporations in the context of a single European economic space and fair tax competition of EU countries, excluding opportunities for tax base erosion. In 2021-2027 it is planned to increase the burden through the introduction of contributions on non-recycled plastic, border carbon adjustment mechanism, digital levy, financial transaction tax, revision of the CO2 emissions trading scheme. This could significantly complicate nonresident digital, financial and foreign economic activities in the EU, as well as the EU's international relations. The reform is controversial and requires revision, taking into account international agreements and the national interests of partner countries. The set of tactical measures involves updating the norms of legislation to meet the requirements of the digital economy, increasing trust and transparency in tax relations, convenience and simplicity of tax payments, and expanding cooperation between tax authorities of EU countries. The experience and prospects of the EU tax policy are significant for Russia both in terms of implementation of the best practices and in terms of timely response to possible dangers and threats related to the ongoing tax reforms in the EU.

The Prishtina strategy as a development strategy in competition with other capitals’ strategies in the South-Eastern Europe

Competitiveness is becoming more and more a regional issue-oriented to meet the needs of the economy and citizens, so economic development is essential for the survival of all cities. Economic growth, made because of an economic development plan, brings new capital to city governments by expanding the tax base to further develop as well as improve the quality of life in general. This paper aims to examine the advantages that the city of Prishtina may have in correlation with the capitals of other Southeast European countries to identify the possibilities of what different strategies and concepts have been developed and used to make a valuable crossroads and short-term and long-term effects from a cultural, economic, social and political point of view.

Actual Problems of the Development of the Regulatory Framework for Digitalization

The article examines the Russian experience of the transformation of the modern economy. The widespread introduction of digitalization is ahead of the existing regulatory framework in this area. For the most part, all digital platforms through which payments take place or some kind of transactions and transactions take place belong to foreign companies or companies whose headquarters are located abroad, and, consequently, taxes are paid abroad. This indicates a lag in the formation of not only the tax base in accordance with today’s demands of the modern economy, but also the entire regulatory framework in the field of digitalization in our country. In 2019, the Digital Economy program and the signed decree of the Government of the Russian Federation “On state support for leading companies in the development of products, services and platform solutions based on end–to-end digital technologies” were approved. The author of the article assesses the possibility of implementing the features of the application of the provisions of the Federal Law “On experimental legal regimes in the field of digital innovations in the Russian Federation” in the direction of “provision of state and municipal services and implementation of state control (supervision) and municipal control, the exercise of other powers and functions by state and local self-government bodies” on the example of the Perm Region.

Level of Accumulated Depreciation of Energy Companies’ Assets

The paper presents the degree of accumulated depreciation of fixed assets in Polish energy companies against the background ofglobal energy companies. The coal-fired energy units used in the Polish energy industry are outdated and require replacement. Inthe course of the energy transformation, they will be replaced with energy from renewable sources, natural gas and nuclear fuel. Thetransformation of the energy sector will allow the achievement of climate and environmental goals. Depreciation charged to expenseis an internal source of financing for processes of restoration of the production capacity. However, the Accounting Act and the IncomeTax Act provide for different methods of calculating depreciation, which means that not all depreciation is tax-deductible and that itdoes not reduce the tax base. Reducing the discrepancies in legal solutions regarding the calculation of depreciation in companies maystimulate the implementation of the processes of energy transformation.

Tax incidence of electronic nicotine delivery systems (ENDS) in the USA

BackgroundA growing number of states or jurisdictions in the USA have imposed excise taxes on electronic nicotine delivery systems (ENDS). However, there is no consensus on how best to tax ENDS.ObjectivesWe specifically compare the tax incidence or burden for ENDS and cigarettes and analyse how ENDS tax incidence is associated with the choices of tax bases and rates.MethodsWe calculate ENDS excise tax incidence as the percentage of retail prices for each state or jurisdiction. Next, we use ordinary least squares to evaluate how tax incidence is associated with the choices of tax bases (eg, a specific tax base vs a value or ad valorem tax base) and rates and how these associations are moderated by product types.ResultsENDS and cigarette tax incidence is similar at the state level. Nonetheless, when federal cigarette taxes are considered, the cigarette tax incidence is higher than the tax incidence on closed-system ENDS. The proportion of states that impose value taxes is higher for open systems (65.4%) than for closed systems (46.2%). A value tax base is associated with a 7 percentage point lower tax incidence compared with a specific tax base. Product type further moderates the association between tax base and incidence.ConclusionTax incidence can be used to measure the strength of ENDS tax policies and how they are compared with cigarette taxes. Policymakers who aim to prevent youth from using ENDS may consider a value tax base to raise the tax incidence of closed systems—the product type preferred by young people.

Rising markups and optimal redistributive taxation

This study explores the implications of rising markups for optimal Mirrleesian income and profit taxation. Using a stylized model with two individuals, the main forces shaping welfare-optimal policies are analytically characterized. Although a higher profit tax has redistributive benefits, it adversely affects market competition, leading to a greater equilibrium cost-of-living. Rising markups directly contribute to a decline in optimal marginal taxes on labor income. The optimal policy response to higher markups includes increasingly relying on the profit tax to fund redistribution. Declining optimal marginal income taxes assists the redistributive function of the profit tax by contributing to the expansion of the profit tax base. This response alone considerably increases the equilibrium cost-of-living. Nevertheless, a majority of the individuals become better off with the optimal policy. If it is not possible to tax profits optimally, due, for example, to profit shifting, increasing redistribution via income taxes is not optimal; every individual is worse off relative to the scenario with optimal profit taxation.

The impacts on food purchases and tax revenues of a tax based on Chile’s nutrient profiling model

Background In June 2016, Chile implemented the Law of Food Labelling and Advertising, which included a mandatory front-of-pack warning labels on food and beverages high in added sugar, saturated fat, sodium or energy density, restrictions on child-directed marketing and on the promotion and sales of these products in schools. The regulation does not include taxes although Chile had implemented a tiered tax on SSBs two years before this law was implemented. Therefore, the objective of the study was to simulate the impact of taxing food and beverages based on the cutoff’s points for warning labels on purchases and revenues. Methods We derived price elasticities using the linear approximation of the almost ideal demand system for six groups of labeled food and beverages (with a warning label based on the regulation) and unlabeled (with no warning label): 1) unlabeled beverages, 2) labeled beverages, 3) unlabeled cereal based products, 4) labeled cereal based products, 5) labeled meat and fish and 6) labeled sweet snacks and desserts. The study used data on household food beverage purchases from the Kantar WorldPanel Chile and Euromonitor sales to adjust the Kantar elasticity results to the national average. We estimated revenues under three tax scenarios for all labeled food and beverages: 10%, 20%, 30% of the final price excluding taxes. Results Except for labeled fish and meat, all food and beverage groups were price elastic. After accounting for a reduction in consumption after the taxes, economic and population growth, revenues for all groups could reach between 457 million USD to 1.3 billion USD. These results based on the much larger tax base of these labeled “high in added sugar, salt or saturated fat or energy density” foods and beverages is much larger. Conclusion This fiscal package could be implemented in countries with warning labels to enhance health and welfare. The Chilean warning label front-of-the-package system provides an important guide for countries considering policies to reduce diet-related non communicable diseases, including obesity. The fiscal policy impact alone, as shown here for Chile, will be highly impactful in reducing ultra-processed food intake and generating revenues.

The determinants of forest land prices

The authors discuss the peculiarities of price formation for forest land as a renewable plant natural resource. Forest plots are regarded as a forest resource that can be used in two ways: as a natural object and as a source of wood raw materials. The absolute forest rent for forest areas with standing trees, adjusted for economic, environmental, and social factors, serves as the pricing basis. The authors propose creating differentiated regional price lists for forest plots and methodological approaches to pricing forest plots with different types of forest use to substantiate the forest tax and tax base.