Political inequality, political participation, and support for populist parties

We theoretically investigate how political abstention among certain social groups encourages populist parties to enter the political stage, trying to absorb inactive voters. We design a two-stage game with two established parties and n voters who jointly determine a taxation policy. The electorate is divided into two groups, the advantaged and the disadvantaged. Voters’ decisions on whether to participate depend on a party’s tax rate proposal and on general party ideology. Effective political participation requires a certain amount of financial, social and intellectual resources to, for example, evaluate party programs or to engage in political discussion. As the disadvantaged are endowed with fewer resources, they lack political efficacy, resulting in less political participation. Consequently, the established parties propose a tax rate which is biased towards the preferences of the advantaged. The unused voter potential among the disadvantaged draws the interest of a populist challenger. To win support from the disadvantaged, the challenger party optimally proposes a respectively biased tax rate, which then works to polarize the political spectrum.Please confirm if the author names are presented accurately and in the correct sequence (given name, middle name/initial, family name). Author 1 Given name: [Kim Leonie] Last name [ Kellermann]. Also, kindly confirm the details in the metadata are correct.All correct.

Empirical Evidence on Factors Conditioning the Turning Point of the Public Debt–Growth Relationship

This paper contributes to the limited literature on the factors conditioning the turning point of the public debt–growth relationship. A decade after the global financial crisis, when the debt ratio in many countries was still above pre-crisis levels, the COVID-19 pandemic again increased the pressure on public finances. It revived the debate on the ability to promote economic recovery through debt-financed government expenditure. However, more intense government borrowing increases its costs and uncertainty about future taxation policy, thus potentially disturbing private consumption, investment, and economic growth. In this paper, we estimate the thresholds of indicators on which the expenditure multiplier depends, which may already imply a risk that public debt will dampen economic growth. We use a methodology of structural threshold regression to examine the varying effects that debt might have on growth using consumption, investment, taxes, and imports as threshold variables, as well as several other factors suggested by previous contributions. The applied methodology allows for the addressing of parameter heterogeneity and endogeneity to be accounted for at the same time. The main results suggest that a positive debt effect is more likely if the conditions for a high expenditure multiplier are met, that an increase in the public-debt-to-GDP ratio is not necessarily deleterious to growth if shares of private consumption and investment in GDP are high, while the tax-revenue-to-GDP ratio is low.

Social Enterprise and Taxation Policy: A Systematic Literature Review

<div><table cellspacing="0" cellpadding="0" align="left"><tbody><tr><td align="left" valign="top"><p class="AbstractText">Malaysia is likely to introduce new laws on social enterprises of taxation. However, the important questions are whether the said laws are adequate. This study explores previous research on social enterprises and taxation to gain a further understanding through a systematic literature review on social enterprises and taxation from the Malaysian perspective. This is normative legal research. The data was gathered through library research which consisted of numerous publications. This study concludes that tax and social enterprises, perhaps due to the different economic structures in each country, result in taxation being slightly discussed by previous scholars. Nevertheless, we clearly define social enterprises from different perspectives, including the characteristics present in social enterprises. Moreover, the perspective regarding tax relief for social enterprises in Malaysia has been highlighted. Although Malaysia has introduced a new policy to support its social enterprises with Social Enterprise Accreditation, a more significant regulatory or tax incentives approach is needed to support social enterprises in Malaysia.</p></td></tr></tbody></table></div>

Environmental Regulation of Firms that Experience Dynamic Inconsistency

<p>The recent push for environmental regulation has invigorated the discussion of mechanism design and optimal taxation policy. Recent decades have also seen growing interest in behavioural economics and empirically based theory. In this thesis we take a step towards combining the two by asking how a regulator may correct an externality in situations where they have a time consistency problem. Time inconsistency is one of the notable developments of behavioural economics. It posits that an agent’s decisions do not remain consistent over time, which causes a utility loss if the agent cannot commit themselves to a particular course of action and stick to it. The solution to inconsistency problems is to precommit to a course of action and prevent future deviations from it. However, finding a mechanism to enable such precommitment is often problematic. A regulator who maximises welfare can have a time consistency problem because welfare will depend on the decisions of firm and households who may themselves be inconsistent. That inconsistency then propagates to the regulator’s decision and reduces the level of welfare that the regulator can reach. Alternatively, the regulator’s time consistency problem can be caused by non-stationarity in their time preferences. To reach the firstbest outcome the regulator must not only eliminate the environmental externality: they must also overcome their own time inconsistency problem. This thesis draws from the literature on strategic delegation to construct a taxation game in which the regulator can achieve the first best taxation regime without the need for external precommitment devices. We study a dynamic game where the regulator chooses a tax rate and the regulated monopolist chooses their price. We show that the Markov-perfect equilibrium price path of this game will replicate the first best plan. Our results holds for time inconsistency caused by both jump states and quasihyperbolic discounting.</p>

Environmental Regulation of Firms that Experience Dynamic Inconsistency

<p>The recent push for environmental regulation has invigorated the discussion of mechanism design and optimal taxation policy. Recent decades have also seen growing interest in behavioural economics and empirically based theory. In this thesis we take a step towards combining the two by asking how a regulator may correct an externality in situations where they have a time consistency problem. Time inconsistency is one of the notable developments of behavioural economics. It posits that an agent’s decisions do not remain consistent over time, which causes a utility loss if the agent cannot commit themselves to a particular course of action and stick to it. The solution to inconsistency problems is to precommit to a course of action and prevent future deviations from it. However, finding a mechanism to enable such precommitment is often problematic. A regulator who maximises welfare can have a time consistency problem because welfare will depend on the decisions of firm and households who may themselves be inconsistent. That inconsistency then propagates to the regulator’s decision and reduces the level of welfare that the regulator can reach. Alternatively, the regulator’s time consistency problem can be caused by non-stationarity in their time preferences. To reach the firstbest outcome the regulator must not only eliminate the environmental externality: they must also overcome their own time inconsistency problem. This thesis draws from the literature on strategic delegation to construct a taxation game in which the regulator can achieve the first best taxation regime without the need for external precommitment devices. We study a dynamic game where the regulator chooses a tax rate and the regulated monopolist chooses their price. We show that the Markov-perfect equilibrium price path of this game will replicate the first best plan. Our results holds for time inconsistency caused by both jump states and quasihyperbolic discounting.</p>

The Politics of Retirement Savings Taxation: a Trans-Tasman Comparison

<p>The thesis makes two primary contributions. The first is in the provision of a comprehensive historical account of the events, personalities and environment that formed the policy for the taxation of retirement savings in New Zealand and Australia. This historical account is analysed through institutional frameworks to explain the antecedents that have resulted in the retirement savings taxation policy outcomes that exist in the two countries at the present time. The second key objective of the research, in using institutional theory to assist with the first objective, is to provide some insights into the utility of institutional theory, and historical institutionalism in particular, in this comparative case study. The different retirement savings policies that were implemented in the mid to late 1980s in New Zealand and Australia have resulted in substantially different levels of retirement savings in each country. New Zealand s retirement savings figures and participation in occupational superannuation are among the lowest in the OECD. Conversely, Australia now has the fourth largest managed fund pool in the world, and the largest in Asia. Australian retirees can expect to have an income of 70 - 80 per cent of their final retirement income, after 40 years of Superannuation Guarantee participation. Retiring New Zealanders, assuming National Superannuation continues unchallenged, will receive a minimum of 60 - 65 per cent of the average wage. The difference in standard of living that these amounts will support is significant. Retiring Australians will be advantaged with some relationship between their pre-retirement and retirement income. This is a benefit many retiring New Zealanders will not receive. The research findings indicate that the key independent variables highlighted in this research (the environment, institutions, power and ideas) contribute a contestable explanation to the policy directions adopted in each country. The thesis argues that the concept of ideas is the key dimension that shaped the retirement savings taxation policy in the 1982 to 1992 period in New Zealand and Australia. The use of a coherent ideology facilitated the communication of a consistent world view in both countries, and provided a set of established ideas to support the direction adopted. This assisted with validation for trade-offs incurred in the policy process. The investigation of institutional factors highlighted the lack of potential for interest groups to make their voices heard. Conversely, the privileging of certain interest groups, those aligned with the prevailing ideas, was also prevalent. The institutions with the strongest influence on the policy process were those that, through historical events or historical opportunity, had preferences that were aligned with the state. This case study indicates that historical institutionalism has less utility for the study of a more detailed component of policy, rather than broader structural policy reform, as typically used in other studies. Thus, it is suggested that the utility of historical institutionalism may be reflected by the level of detail both undertaken in the research and desired from the research output. The indication that historical institutionalism may have greater utility for larger case study analyses may have application for future research.</p>

The Politics of Retirement Savings Taxation: a Trans-Tasman Comparison

<p>The thesis makes two primary contributions. The first is in the provision of a comprehensive historical account of the events, personalities and environment that formed the policy for the taxation of retirement savings in New Zealand and Australia. This historical account is analysed through institutional frameworks to explain the antecedents that have resulted in the retirement savings taxation policy outcomes that exist in the two countries at the present time. The second key objective of the research, in using institutional theory to assist with the first objective, is to provide some insights into the utility of institutional theory, and historical institutionalism in particular, in this comparative case study. The different retirement savings policies that were implemented in the mid to late 1980s in New Zealand and Australia have resulted in substantially different levels of retirement savings in each country. New Zealand s retirement savings figures and participation in occupational superannuation are among the lowest in the OECD. Conversely, Australia now has the fourth largest managed fund pool in the world, and the largest in Asia. Australian retirees can expect to have an income of 70 - 80 per cent of their final retirement income, after 40 years of Superannuation Guarantee participation. Retiring New Zealanders, assuming National Superannuation continues unchallenged, will receive a minimum of 60 - 65 per cent of the average wage. The difference in standard of living that these amounts will support is significant. Retiring Australians will be advantaged with some relationship between their pre-retirement and retirement income. This is a benefit many retiring New Zealanders will not receive. The research findings indicate that the key independent variables highlighted in this research (the environment, institutions, power and ideas) contribute a contestable explanation to the policy directions adopted in each country. The thesis argues that the concept of ideas is the key dimension that shaped the retirement savings taxation policy in the 1982 to 1992 period in New Zealand and Australia. The use of a coherent ideology facilitated the communication of a consistent world view in both countries, and provided a set of established ideas to support the direction adopted. This assisted with validation for trade-offs incurred in the policy process. The investigation of institutional factors highlighted the lack of potential for interest groups to make their voices heard. Conversely, the privileging of certain interest groups, those aligned with the prevailing ideas, was also prevalent. The institutions with the strongest influence on the policy process were those that, through historical events or historical opportunity, had preferences that were aligned with the state. This case study indicates that historical institutionalism has less utility for the study of a more detailed component of policy, rather than broader structural policy reform, as typically used in other studies. Thus, it is suggested that the utility of historical institutionalism may be reflected by the level of detail both undertaken in the research and desired from the research output. The indication that historical institutionalism may have greater utility for larger case study analyses may have application for future research.</p>

Redefining Permanent Establishment Concept of e-Commerce Cross-border Transaction: A Preliminary Study in Indonesia

The development of e-commerce transaction has created problems in taxation policy. The tendency of tax avoidance occurs when countries place little attention to mitigate the problem. Most countries, including Indonesia, face the problem of tax avoidance practices as e-commerce practices can bypass States' territorial boundaries.

Cooperative Game for Fish Harvesting and Pollution Control

This paper studies fishery strategies in lakes, seas, and shallow rivers subject to agricultural and industrial pollution. The flowing pollutants are modeled by a nonlinear differential equation in a general manner. The logistic growth model for the fish population is modified to cover the pollution impact on the fish growth rate. We start by presenting the stability analysis of the dynamical system to discern the different types of the evolution of the fish population according to human actions. A cooperative game is formulated to design strategies for preserving the fish population by controlling the pollution as well as the fish stock for harvesting. The sufficient conditions for implementing the cooperative strategy are investigated through an incentive design approach with an adaptive taxation policy for the players. Numerical results are presented to illustrate the benefit of the cooperative for fish population preservation but also for the players’ rewards.