State Fiscal Policy Practice

America’s individualistic national identity and regressive tax systems that favor corporations and the wealthy over everyday people have increasingly exacerbated inequality. Meanwhile, social welfare needs continue to outpace the resources governments employ to address them. While fiscal issues can be complex and opaque, holding governments accountable is imperative to counter long-standing oppression of those identifying as Black, Indigenous, and People of Color (BIPOC), women, immigrants, and others. How state governments, in particular, raise and expend revenue has a dramatic effect on the public, especially as the federal government continues to decentralize social welfare to the states. Social workers are uniquely equipped to influence this arena, given their person-in-environment view and having borne witness to the numerous ways misguided priorities have severely harmed those they are called to serve.

Analysing SST 2.0 Tax Burden through the Element of Principle of Good Tax Policy

Since the 70s, the focus of the Malaysian government on sustainable development is to improve the economic well-being of its society. In September 2015, Malaysia reaffirmed this commitment with the other United Nations countries by implementing the 2030 Agenda for 17 Sustainable Development Goals (SDGs), focusing on the bottom 40% of households (B40). Unfortunately, the implementation of Goods and Services Tax (GST) on 1st April 2015, followed by Sales and Services Tax (SST) 2.0 on 1st September 2018 impacted all income groups especially B40. The public especially B40 claimed that indirect tax is regressive and burdensome (MIER, 2018). Hence, the present study aims to identify the existence of SST 2.0's tax burden assessing through the relationship between elements of guiding principles of good tax policy. Keywords: Sales and Service Tax, enforcement, regressive, tax burden, fairness.

Accounting, inequality and COVID-19 in Australia

PurposeThe authors explore the Australian Government's implementation of budgetary measures to manage the social and economic impacts of COVID-19, paying particular attention to how the country's history of inequality has shaped these actions, and the effect inequality may have on outcomes.Design/methodology/approachIn this qualitative case study of public budgeting, the authors draw on the latest research into inequality to consider the implications of policy responses to COVID-19 in Australia. In particular, we examine the short-term introduction of what we term “people-focused” budgetary measures. These appeared contrary to the dominant neoliberalist approach to Australian welfare policymaking.FindingsThis paper foregrounds the relationship between budgeting, public policy and inequality and explores how decades of increasingly regressive tax systems and stagnating living wages have made both people, and the state, vulnerable to crises like COVID.Social implicationsThere is still much to learn about the role of accounting in the shaping of growing economic inequality. In focusing on public budgeting within the context of COVID, the authors suggest ways accounting researchers can contribute to our understanding of economic inequality, both in terms of drivers and consequences. The authors hope to contribute to a growing body of accounting research that can influence social movements, political debates and policymaking, while also raising awareness of the consequences of wealth and income inequality.Originality/valueThe authors explore ways accounting scholars might help articulate a post-COVID future that avoids recreating the inequalities of the past and present.

Tax reform and redistribution for a better recovery

A regressive tax system and welfare cuts under ideological austerity have generated growing poverty and inequality in the UK and US. Failures in responding to the COVID-19 pandemic and the resulting deep recession have the greatest impact on the poorest and most vulnerable, exacerbating poverty and inequality. In contrast to this depressing history, we show in detail that a better recovery in the UK requires a radical tax reform and a universal basic income, combined with a Green New Deal for full employment and a low-carbon economy, employee self-determination and economic democracy to eliminate exploitation and establish social justice.

Improving Economic Opportunity in the United States

This chapter examines barriers to economic opportunity and mobility in the United States and offers near- and long-term policies to reduce these barriers. These barriers include high levels of income inequality, unequal access to educational opportunities, residential segregation by income, inadequate investments in children and certain areas, and disparities between economic conditions in rural relative to metro areas. In the near-term, running tight labor markets, infrastructure investment, direct job creation, healthcare and other work supports, and apprenticeships could reduce these barriers. Longer term solutions invoke policy interventions targeting inequality, inadequate housing, income and wage stagnation, nutritional and health support, the criminal justice system, and educational access. It is also crucial to avoid policies that keep opportunity barriers in place, such as reducing the provision of public healthcare, regressive tax cuts, and budget cuts to programs that help low- and moderate-income families.

Post-Subsidy Solar PV Business Models to Tackle Fuel Poverty in Multi-Occupancy Social Housing

UK Feed-in Tariffs created a vibrant business ecosystem for the deployment of decentralised renewable energy technologies while constituting a regressive tax and increasing inequality. Business model innovation spurred by their withdrawal is providing valuable lessons for progressive policy design. Using the case study of solar PV deployment on multi-occupancy social housing, this paper reveals policy, business and organisational challenges that need to be overcome to address fuel poverty and reduce inequality. Suitable ‘export’ and ‘local’ business models were identified through a workshop and subsequently evaluated through qualitative thematic interview analysis. The ‘local’ model compares favourably in terms of production costs and benefits for fuel poor tenants but unfavourably in terms of transaction costs. Both models are considered equally susceptible to changes in policy. Their success hinges upon third party intermediaries, peer-to-peer learning and a supportive policy environment. This paper concludes with a policy recommendation to ensure that energy justice lies at the heart of the UK’s transition to net-zero carbon through the fair distribution of costs and benefits by including specific provisions to protect low-income groups.

Tax Extenders Resurrected: Insights on Higher Education Tax Reform from the Recent Legislation on the Tuition and Fees Deduction

U.S. legislators recently brought back thirty-four tax programs from legislative limbo, extending them for three years. This includes the tuition and fee deduction, used by taxpayers to save on college expenses. This regressive tax policy flows heavily towards higher-income levels, with almost a third of the deduction going to those with incomes between $100,000 and $200,000. Previous empirical research indicates the policy has had no effect on increasing college enrollment. It is imperative that researchers, policymakers, and practitioners remediate duplicative, fiscally irresponsible tax policy. To guide this remediation, I provide a legislative history of the tuition and fees deduction, duplicative effects of current education tax incentives, critiques against the current tax extender package, and recommendations for higher education tax reform.

Assessing the effect of the COVID-19 pandemic on the government revenues: a study on individual taxpayers of Bangladesh

Purpose. The purpose of the study includes analyzing the effects of the Coronavirus pandemic on the taxpaying ability of individual taxpayers of Bangladesh and its subsequent impact on the government revenue collection; analyzing the factors related to the taxpaying ability like the situation of their employer, regularity of payment and so on; suggestions to the policy makers. Methodology. In this study purposive random sampling technique was followed to choose the respondents. The sample of the research includes the individuals who are within the tax net and have to pay income tax to the government. 128 respondents participated in the survey spontaneously. Mean value, standard deviation and related statistical tools were used for analyzing the data in the research. SPSS software was used for analyzing and interpreting the research result. Statistical tables were used to display the outcome. Findings. The major findings of the study suggest that 65.6% of the respondents said that their official activities have been affected much while other 25% claimed that their activities have become moderately affected due to the COVID-19 pandemic. Income of 40.6% of the respondents has already been much affected and income of 32.8% of the respondents has been moderately affected. The study warns that due to the detrimental effects of the COVID-19 pandemic on the income level, the governments tax collection may fall. Originality. The study concludes that the adverse effects of the COVID-19 pandemic will negatively affect the government revenue collection and to tackle this situation a less regressive tax system is suggested which will allow shifting tax liability to the rich taxpayers. The study emphases the implementation of the existing tax laws so that tax evasion is minimized. Practical value. The study has recommended some specific recommendations that may help the respective authority in tackling the ongoing coronavirus pandemic. The study suggested making some necessary adjustments in the public expenditure to reduce the pressure on tax collection. It might be beneficial to the government to manage the COVID-19 pandemic if the recommendations of the study are taken into consideration.

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

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.

Political Economy of the Parcel Tax in California School Districts

This article examines the effect of home price distribution on the likelihood of parcel tax adoption in California school districts. A parcel tax is a regressive tax imposed as the same amount per unit of property regardless of property values and requires a two-thirds supermajority vote to be adopted. Despite the growing role that local parcel taxes have in funding public education, it has not been fully understood how their regressive nature influences adoption. I argue that because the regressive tax imposes different marginal property tax rates for voters, the distribution of home prices within a district determines the likelihood of parcel tax adoption. Using the Heckman selection models with California school district–level data, I find that a large gap in home values within a district significantly lowers the likelihood of parcel tax adoption.