Hungary’s premier will hope tax cuts appeal to voters

Headline HUNGARY: Premier will hope tax cuts appeal to voters

The Tax Cuts and Jobs Act of 2017 and the Gig Economy: Why the Employee vs. Contractor Debate Matters More than Ever

The issue of whether workers are independent contractors or employees has become even more relevant with recently enacted and proposed legislation and court cases in many jurisdictions seeking to impose employee status on many Gig economy workforce participants, such as ride-share drivers. This article emphasizes that the U.S. income tax rules, especially after tax reform effective in 2018, makes employee status extremely tax-inefficient for these workers. This article explains the relevant tax law changes and provides various examples of typical settings to confirm that workers with even small relative work expenses are often better off as contractors from a tax point of view.

North and South: A Regional Model of the UK

We set up a two-region model to study the policy challenge of bringing the North’s income up to the level of the South in the UK. The model focuses on labour costs as the driver of output gains through the international competitiveness channel; and on tax/regulative costs to entrepreneurs as the driver of productivity growth. The empirical results show that the regional model behaviour fits the regional UK data behaviour over the period of 1986Q1 and 2019Q4, using the demanding Indirect Inference method. We also carry out a Monte Carlo power test, which shows the empirical results we obtain are trustworthy and can provide us a reliable guide for policy reform. The results suggest that in response to tax cuts and labour market reforms GDP in the North increases almost twice as much as GDP in the South. Given that a broad programme of tax cuts and regulatory reform would more than pay for itself in the long run, it must be considered as a highly attractive political agenda.

Reregulating Indonesian Stock Buyback: A Lesson From United States

This article compares the corporate income tax cuts enacted by the Indonesian COVID-19 Relief Law and the US Tax Cuts and Jobs Act. It investigates the correlation between the tax cuts in the Tax Cuts and Jobs Act, economic development, and share repurchases in the US. It seeks to identify appropriate limitations on share repurchases in Indonesia following the enactment of the COVID-19 Relief Law. This research was carried out using the juridical normative method by tracing the literature and laws concerning share repurchase arrangements in Indonesia and the US. The results show that there is a slight positive correlation between the reduction of corporate income tax and economic development in the US and that the US income tax cuts have caused significant growth in share repurchases. After the enactment of the Indonesian COVID-19 Relief Law, which also reduced corporate income taxes, Indonesia may be on the verge of extensive share repurchase activity, as occurred in the US. To tackle this problem, we recommend amending Law No. 40 of 2007 concerning limited liability companies to re-regulate the restriction on share repurchases.

Are Tax Cuts Supporters Self-Interested and/or Partisan? The Case of the Tax Cuts and Jobs Act

In late 2017, the first unified Republican government in 15 years enacted the Tax Cuts and Jobs Act, which cut taxes for corporations and the wealthy. Why did so many citizens support a policy that primarily benefited people richer than them? The self-interest hypothesis holds that individuals act upon the position they occupy in the income distribution: richer (poorer) taxpayers should favor (oppose) regressive policy. Associations between income and policy preferences are often inconsistent, however, suggesting that many citizens fail to connect their self-interest to taxation. Indeed, political psychologists have shown compellingly that citizens can be guided by partisan considerations not necessarily aligned with their own interests. This article assesses public support for the Tax Cuts and Jobs Act of 2017. Using data from the 2018 Cooperative Congressional Election Study as well as contemporaneous ANES and VOTER surveys to replicate our analyses, we show that self-interest and partisanship both come into play, but that partisanship matters more. Personal financial considerations, while less influential than party identification, are relevant for two groups of individuals: Republicans and the politically unsophisticated.