Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal最新文献

{"title":"Capital Income Taxation with Portfolio Choice","authors":"Ivo Bakota","doi":"10.2139/ssrn.3702255","DOIUrl":"https://doi.org/10.2139/ssrn.3702255","url":null,"abstract":"This paper analyzes redistributional and macroeconomic effects of differential taxation of financial assets with a different risk levels. The redistributive effect stems from the fact that various households hold portfolios with a starkly different risk levels. In particular, poor households primarily save in safe assets, while rich households often invest a substantially higher share of their wealth in (risky) equity. At the same time, equity and safe assets are often taxed at different rates in many tax codes. This is primarily because investments in equity (which are relatively riskier) are taxed both as corporate and personal income, unlike debt, which is tax deductible for corporations. This paper firstly builds a simple theoretical two-period model which shows that the optimal tax wedge between risky and safe assets is increasing in the underlying wealth inequality. Furthermore, I build a quantitative model with a continuum of heterogeneous agents, parsimonious life-cycle, borrowing constraint, aggregate shocks and uninsurable idiosyncratic shocks, in which the government raises revenue by using linear taxes on risky and safe assets. Simulations of quantitative models shows that elimination of differential asset taxation leads to a welfare loss equivalent to a 0.3% permanent reduction in consumption. I find that the optimal tax wedge between taxes on equity and debt is higher than the one in the U.S. tax code.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134024762","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"General Anti-Avoidance Rules Revisited: Reflections on Tim Edgar's 'Building a Better GAAR'","authors":"D. Duff","doi":"10.32721/ctj.2020.68.2.sym.duff","DOIUrl":"https://doi.org/10.32721/ctj.2020.68.2.sym.duff","url":null,"abstract":"In addition to the requirement of a tax benefit or advantage, the application of most modern general anti-avoidance rules (GAARs) turns on two elements: a \"subjective element,\" which considers the purpose for which the transaction or arrangement resulting in the tax benefit or advantage was undertaken or arranged; and an \"objective element,\" which considers the object or purpose of the relevant provisions to determine whether the tax benefit resulting from the transaction or arrangement is consistent with this object or purpose.\u0000\u0000Although these two elements are present in most modern GAARs, the function of each element within these rules and the relationship between them are often poorly understood. Other unresolved issues concern the roles of artificiality and economic substance in the application of these rules, and the relationship, if any, between these concepts and the \"subjective\" and \"objective\" elements of the rules. A final set of issues involves the uncertainty that GAARs may engender, the ability of judges to apply these rules and principles in a coherent and consistent manner, and the compatibility of these rules and principles with the rule of law.\u0000\u0000The author addresses these issues by reflecting on Tim Edgar's article \"Building a Better GAAR.\" The first part of the paper considers the rationale for a general anti-avoidance rule or principle, arguing that such a rule not only represents a useful policy response to the harmful consequences of tax avoidance (the consequentialist argument that Professor Edgar espoused), but also may be justified on the non-consequentialist grounds that it protects the integrity of the provisions at issue and thereby upholds the rule of law. In the second part of the paper, the author builds on this analysis to consider the design of a general anti-avoidance rule or principle, arguing that it should be codified in the form of an explicit rule, should include subjective and objective elements such as the \"purpose\" and \"misuse or abuse\" requirements in the Canadian GAAR, and should be informed by concepts of artificiality and economic substance that apply to, respectively, the subjective and objective elements of the rule.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130055038","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Designing An Effective Relief Package for Startups","authors":"Luisa Alemany, Pawel Stach","doi":"10.2139/ssrn.3726980","DOIUrl":"https://doi.org/10.2139/ssrn.3726980","url":null,"abstract":"Taxpayers could be the ultimate winners from government support for ‘made-in-crisis’ startups through the right investment structures.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122730280","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Burden of the National Debt: Evidence from Mergers and Acquisitions","authors":"Ruchith Dissanayake, Yanhui Wu, Huizhong Zhang","doi":"10.2139/ssrn.3458690","DOIUrl":"https://doi.org/10.2139/ssrn.3458690","url":null,"abstract":"We examine the impact of changes in national debt on the mergers and acquisitions (M&As) activity. Although increases in government debt reduces the acquisition likelihood, we find no evidence for the traditional interest rate mechanism. Instead, we document that upsurges in national debt depress M&A activity through increases in fiscal policy related uncertainty (taxes, discretionary spending, entitlement programs etc.). During periods of increasing national debt, acquirers decrease stock-based financing relative to cash-based financing and reduce the acquisition of targets with a higher degree of investment irreversibility. In such periods, announced deals are associated with lower premiums and lower synergistic gains.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127621569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Effects of Corporate Taxes on Small Firms","authors":"J. Harju, Aliisa Koivisto, Tuomas Matikka","doi":"10.2139/ssrn.3551017","DOIUrl":"https://doi.org/10.2139/ssrn.3551017","url":null,"abstract":"We study the impact of corporate taxes on firm-level investments, total output and input usage by exploiting a 4.5 percentage-point corporate tax rate cut in Finland in 2014. We use detailed administrative data and a differences-in-differences method comparing small corporations (tax rate cut) to similar partnerships (no change in tax incentives). We find no significant investment responses. However, we observe an increase in annual sales and variable costs, suggesting that corporate tax rates have an effect on business activity. The effects are driven by entrepreneurs who actively work in their firm, suggesting that the tax cut increased entrepreneurial effort.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121344874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Consumer Foresight, Customer Data, and Investment in Targeting Technology","authors":"Irina Baye, Geza Sapi","doi":"10.1111/sjpe.12244","DOIUrl":"https://doi.org/10.1111/sjpe.12244","url":null,"abstract":"We analyze competing firms’ incentives to adopt a technology that allows making refined targeted offers to returning customers. Consumer foresight is crucial for firms’ decisions. Although our setup is symmetric, when consumers are myopic, the unique equilibrium is asymmetric in firms’ technology adoption decisions. Contrary to conventional wisdom, consumers may be better off being myopic than sophisticated. Light privacy policy may benefit consumers if it reduces the costs of handling customer data and avoids strict obligations on firms to inform consumers about data use, which would erode investment incentives into targeting technology.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131400032","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Operationalizing Inclusive Growth: Per-Percentile Diagnostics to Inform Redistribution Policies","authors":"A. Kireyev, A. Leonidov","doi":"10.5089/9781513528397.001","DOIUrl":"https://doi.org/10.5089/9781513528397.001","url":null,"abstract":"Inclusive growth, narrowly defined in this paper as growth that helps reduce inequality, is achieved if consumption of the poor increases faster than consumption of the rich. The paper presents a simple accounting framework for a per-percentile consumption diagnostics that could inform redistribution policies. The proposed framework is illustrated in application to Iraq and Tunisia.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125743318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Capital Structure, Corporate Investment, and Investor-Level Taxes: Evidence from a Natural Experiment in Europe","authors":"Jonathan B. Cohn, S. Titman, Garry J. Twite","doi":"10.2139/ssrn.2941957","DOIUrl":"https://doi.org/10.2139/ssrn.2941957","url":null,"abstract":"We study a court ruling that materially affected dividend taxation in several European countries. The tax changes were not directly related to economic conditions or corporate financial policies, providing a useful experiment for studying the effect of taxation on capital structure, payout, and investment decisions. Consistent with theory, we find that dividends and equity issuance decline after these changes. Leverage ratios change little on average but increase substantially for capital-raising firms, which should be the most affected by the tax changes. Moreover, investment decreases, consistent with an increase in the after-tax cost of capital that arose from the tax change.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"92 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127017711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Inflation, Interest Rate and the Maastrich Rule","authors":"I. Ábel, Csaba G. Tóth","doi":"10.2139/ssrn.3710439","DOIUrl":"https://doi.org/10.2139/ssrn.3710439","url":null,"abstract":"Inflation and fiscal performance are interlinked and called for proper legislative and institutional requirements to implement policies. We argue that more attention should be paid to nominal indicators like inflation and nominal interest rate in designing fiscal rules and we attempt to corroborate our suggestion from multiple aspects. Debt decomposition indicates the importance of inflation and nominal interest rate in debt accumulation. Using a simple fiscal simulation, we demonstrate the effect of neglecting these nominal variables in the application of the most well-known European fiscal rule, the Maastricht (3 percent of GDP) rule.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116719130","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Do Tax Incentives Reduce Investment Quality?","authors":"Sebastian Eichfelder, M. Jacob, Kerstin Schneider","doi":"10.2139/ssrn.3515852","DOIUrl":"https://doi.org/10.2139/ssrn.3515852","url":null,"abstract":"This paper examines the effect of tax incentives in the form of bonus depreciation on the quality of investment. Using the expiration of tax incentives via bonus depreciation in East Germany and a representative panel of West German establishments, we show that bonus depreciation significantly lowers the quality of investment. The average quality of investments, measured by the responsiveness of future sales to current investment, reduces by 22.6-34.6%. This adverse effect of tax subsidies is greater for jurisdictions with higher tax rates as well as for large or high-productivity firms. Overall, while increasing investment quantity, as shown by prior literature, tax incentives such as bonus depreciation substantially reduce the quality of investments.","PeriodicalId":282044,"journal":{"name":"Political Economy: Fiscal Policies & Behavior of Economic Agents eJournal","volume":"95 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134263564","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}