International Tax and Public Finance

http://link.springer.com/journal/10797

List of Papers (Total 43)

Optimal family taxation and income inequality

This paper presents the properties of optimal piecewise linear income tax systems for families, based on joint and individual incomes. It models the interaction between the wage rates of mothers as “second earners” and variation in child care prices and productivities as determinants of heterogeneity in second earner labour supply. We find that individual taxation welfare...

Distributional and revenue effects of a tax shift from labor to property

Contrary to frequent recommendations of the public finance literature and international institutions, a persistently high tax wedge on labor is observed in Europe. Simultaneously, the scope for shifting taxes to more growth-friendly revenue sources appears underused. This motivates our simulation of a tax shift from labor to property for Germany, a country where property tax...

The marginal cost of public funds is one at the optimal tax system

This paper develops a Mirrlees framework with skill and preference heterogeneity to analyze optimal linear and nonlinear redistributive taxes, optimal provision of public goods, and the marginal cost of public funds (MCF). It is shown that the MCF equals one at the optimal tax system, for both lump-sum and distortionary taxes, for linear and nonlinear taxes, and for both income...

Corporation taxes in the European Union: Slowly moving toward comprehensive business income taxation?

This paper surveys and evaluates the corporation tax systems of the Member States of the European Union on the basis of a comprehensive taxonomy of actual and potential regimes, which have as their base either profits; profits, interest and royalties; or economic rents. The current regimes give rise to various instate and interstate spillovers, which violate the basic tenets...

VAT and agriculture: lessons from Europe

Little has been written about the treatment of agriculture under the value added tax (VAT). This article attempts to fill the void by surveying and evaluating the situation in the Member States of the European Union (EU) and some other countries. Farmers are often exempted from VAT for administrative and political reasons. But this means that the VAT on their inputs cannot be...

Will the real R&D employees please stand up? Effects of tax breaks on firm-level outcomes

This paper evaluates the effect of tax incentives for research and development (R&D) on R&D spending and employment of R&D staff in a quasi-experimental setting. To do this, I exploit an exogenous reform in UK R&D tax policy, which changed the definition of an SME from firms with fewer than 250 employees to those with fewer than 500 employees. I use the UK Business Enterprise...

What happens to the husband’s retirement decision when the wife’s retirement incentives change?

In this paper, I exploit population-wide administrative data and a Swedish occupational pension reform, which primarily affected a subgroup of female workers, to recover the effect of the wife’s retirement incentive on the husband’s retirement behavior. I estimate a sharp relative decrease in the retirement probability of 63-year-old wives who were treated by the reform. However...

Risk aversion and inequity aversion in demand for unemployment benefits

This paper is an empirical study of what motivates net contributors to support redistributive policies. While studies in the area have tended to consider broad measures of inequality and support for redistribution in general, we focus on a single, salient relationship between local unemployment rates and demand for spending on unemployment benefits. Using a particularity of the...

Cross-country differences in the contribution of future migration to old-age financing

As life expectancy increases and fertility declines, population aging puts pressure on the financing of welfare states in Europe and other developed countries. Given that immigrant workers are younger than the domestic population, a continuous flow of immigrants reduces the old-age dependency ratio and improves financing. Existing general equilibrium estimates of the public...

Flexible pension take-up in social security

This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions and heterogeneous individuals who differ in ability and lifespan. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme...

Intellectual property box regimes: effective tax rates and tax policy considerations

In 2014, 12 European countries are operating Intellectual Property (IP) Box regimes that provide substantially reduced rates of corporate tax for income derived from important forms of intellectual property. We describe the key features of the policies and incorporate them into forward-looking measures of the cost of capital and the effective average tax rate. We show that the...

Transitions

Climate change: fiscal and international trade issues—introduction

The challenges to dealing with climate change are broad and complex. This special section reviews some of—but also brings new insights to—the challenges.

Optimal taxation and welfare benefits with monitoring of job search

In order to investigate the interaction between tax policy, welfare benefits, the government technology for monitoring and sanctioning inadequate search, workfare, and externalities from work, we incorporate endogenous job search and involuntary unemployment into a model of optimal nonlinear income taxation. In this setting, the government faces a trade-off between boosting...

Optimal redistributive tax and education policies in general equilibrium

This paper studies optimal linear and non-linear income taxes and education subsidies in two-type models with endogenous human capital formation, endogenous labor supply, and endogenous wage rates. Assuming constant human capital elasticities, human capital investment should be efficient under optimal linear policies, whether general equilibrium effects are present or not. Hence...

Tax competition leading to strict environmental policy

We study tax competition when pollution matters. Most notably, we present a dynamic setting, where the supply of capital is endogenous. It is shown that tax competition may involve stricter environmental policy than the cooperative outcome.

Target loans, current account balances and capital flows: the ECB’s rescue facility

This paper presents the first comprehensive Target database of the Eurozone and interprets it from an economic perspective. We show that the Target accounts measure the intra-Eurozone balances of payments and indirectly also international credit given through the Eurosystem in terms of reallocating the ECB’s net refinancing credit. We argue that the Euro crisis is a balance-of...

Health, disability and work: patterns for the working age population

We examine the role of health as a determinant of labour force participation, paying particular attention to the link between the two provided by disability insurance schemes. We first review the evidence on associations between health and labour force participation. Enrolment in disability insurance is not determined by health alone, and we highlight the main other causes that...

An applied analysis of ACE and CBIT reforms in the EU

We assess the quantitative impact of two reforms to corporation tax, which would eliminate the differential treatment of debt and equity: the allowance for corporate equity (ACE) and the comprehensive business income tax (CBIT). We explore the impact of these reforms on various decision margins, using an applied general equilibrium model for the EU calibrated with recent...