scholarly journals Finances of the Nation: Net Income Tax Rates and the Changing Progressivity of the Cash Tax/Transfer System

2021 ◽  
Vol 69 (2) ◽  
pp. 575-593
Author(s):  
Tahsin Mehdi ◽  
Brian Murphy
Keyword(s):  
Income Tax ◽  
Cash Transfers ◽  
Income Taxes ◽  
Transfer System ◽  
Tax Rates ◽  
Lower Income ◽  
Net Income ◽  
Effective Tax Rates ◽  
Tax System ◽  
Over Time

In this article, using new data released in 2019, Tahsin Mehdi and Brian Murphy examine changes in the progressivity of the federal and provincial income tax system, in conjunction with changes in the progressivity of federal and provincial cash transfers since 1992, by examining effective tax rates. Many of the major components of the system of income taxes and cash transfers have become somewhat more progressive collectively over time. This has resulted in an improved net tax position for lower-income taxfilers as well as the top third of taxfilers. On the other hand, taxfilers in the middle quintile have experienced a drop in their net tax position since 1992.

Top Income Shares and the Difficulties of Using Tax Data

2020 ◽  
pp. 125-152
Author(s):  
Gerald Auten ◽  
David Splinter
Keyword(s):  
Tax Rates ◽  
Social Changes ◽  
Tax Reforms ◽  
Effective Tax Rates ◽  
Tax System ◽  
Low Incomes ◽  
Top Income Shares ◽  
Tax Returns ◽  
Per Capita ◽  
Over Time

This chapter reconsiders income methods of estimating of inequality using US tax data. It presents a new approach that accounts for the effects of important social changes, tax reforms, technical tax issues, and the 40 percent of income missing from tax returns. Results suggest much smaller increases in top 1 percent shares of pre-tax income. After accounting for taxes and transfers, top 1 percent shares changed little since 1962. This resulted from substantial increases in transfers and increased overall progressivity of the tax system. While effective tax rates for the top 1 percent show little trend, they declined for the bottom 50 percent. Rather than stagnating, per capita real incomes of the bottom half of the population increased over time. Rather than increasing and capturing most economic growth, incomes of those starting at the top decreased while those starting with low incomes received most of the growth.

scholarly journals State ownership, agency conflict and effective tax rates: Evidence from China

2016 ◽  
Vol 12 (1-1) ◽  
pp. 109-114 ◽  
Author(s):  
Sun Jianfu ◽  
Yudha Aryo Sudibyo
Keyword(s):  
Income Tax ◽  
Capital Intensity ◽  
State Ownership ◽  
Income Taxes ◽  
Tax Rates ◽  
Return On Assets ◽  
Effective Tax Rates ◽  
Controlling Shareholders ◽  
Agency Conflict ◽  
The Government

Agency conflict between minority and controlling shareholders in state owned firms has to be considered in order to examine the variability on effective tax rates. In China, state ownership helps the government to achieve its social objectives by optimizing corporate income tax. We provide a significant result to prove that state owned firms paid higher corporate income taxes than private firms. Our results also indicate that corporate effective tax rates are positively associated with firm sized and inventory intensity. However, we have no strong evidence to support the association with leverage, return on assets and capital intensity.

A Better and Larger GST?

2011 ◽  
Vol 22 (3) ◽  
pp. 85-100 ◽  
Author(s):  
John Freebairn
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Transfer System ◽  
Tax Rates ◽  
Lower Income ◽  
Income Transfer ◽  
Improve Efficiency ◽  
Goods And Services

This article argues the case for changes to the Goods and Services Tax (GST) as a key part of fundamental tax reform in Australia. A more comprehensive base would bring gains in efficiency and simplicity, with equity goals better met by the income transfer system. Revenue gains of a broader GST base and/or a higher rate could fund tax mix change packages to replace more distorting state stamp duties and fund lower income tax rates. The tax mix change packages would improve efficiency and simplicity, with no substantial changes to aggregate revenue or to equity.

Transocean and the History of Tax Inversions

2018 ◽  
Vol 34 (1) ◽  
pp. 1-12
Author(s):  
Susan M. Albring ◽  
Randal J. Elder ◽  
Mitchell A. Franklin
Keyword(s):  
Multinational Corporations ◽  
Economic Impacts ◽  
Income Taxes ◽  
Tax Rates ◽  
Corporate Tax ◽  
Corporate Income Taxes ◽  
History Of ◽  
Jobs Act ◽  
The U.S ◽  
Over Time

ABSTRACT The first tax inversion in 1983 was followed by small waves of subsequent inversion activity, including two inversions completed by Transocean. Significant media and political attention focused on transactions made by U.S. multinational corporations that were primarily designed to reduce U.S. corporate income taxes. As a result, the U.S. government took several actions to limit inversion activity. The Tax Cuts and Jobs Act of 2017 (TCJA) significantly lowered U.S. corporate tax rates and one expected impact of TCJA is a reduction of inversion activity. Students use the Transocean inversions to understand the reasons why companies complete a tax inversion and how the U.S. tax code affects inversion activity. Students also learn about the structure of inversion transactions and how they have changed over time as the U.S. government attempted to limit them. Students also assess the tax and economic impacts of inversion transactions to evaluate tax policy.

Taxation in a mixed economy: the case of China

2017 ◽  
Vol 34 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Davidson Sinclair ◽  
Larry Li
Keyword(s):  
Income Tax ◽  
Central Government ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Government Ownership ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Content Type ◽  
Tax Rate ◽  
For Profit

Purpose The purpose of this paper is to investigate how Chinese firms’ ownership structure is related to their effective tax rate. The People’s Republic of China provides an interesting environment to examine the corporate income tax. Government has significant ownership stakes in the for-profit economy and state-owned enterprises (SOEs) are liable to the corporate income tax. This is very different to most other economies where SOE tends to dominate the not-for-profit economy and pays no corporate income tax. Government ownership also varies between the central government and local government in addition to state asset management bureaus. This provides a rich institutional background to examining the corporate income tax. Design/methodology/approach A panel data analysis approach is used to examine relationship between ownership structure and effective tax rates of all public firms in China from 1999 to 2009. Findings The authors report that effective tax rates do appear to vary across the ownership types, but that SOEs pay a statistically higher effective tax rate than to non-state-owned. In addition, local government owned SOE pay higher effective tax rates than central government and SAMB owned SOE. The authors also investigate Zimmerman’s (1983) political cost hypothesis. Unfortunately, these results are econometrically fragile with the statistical significance of those results varying by empirical technique. Originality/value This paper provides insight into government ownership and taxation in China.

Strategic Choice of Presentation Format: The Case of ETR Reconciliations

2021 ◽  
Author(s):  
Roman Chychyla ◽  
Diana Falsetta ◽  
Sundaresh Ramnath
Keyword(s):  
Income Tax ◽  
Strategic Choice ◽  
Presentation Format ◽  
Tax Rates ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Explicit Mention ◽  
Disclosure Strategy ◽  
Minimize Costs

To minimize costs related to unfavorable perceptions of their tax-related activities, firms with low effective tax rates (ETR) could avoid, where possible, explicit mentions of their effective tax rates. Using this reputational cost perspective we study an item of required disclosure in the income tax footnote of the 10-K, the ETR reconciliation table, where firms can choose a presentation format that reveals the tax rate (the percentage format) or one that avoids explicit mention of the effective tax rate (the dollar format). We find that firms with low ETRs are 24 percent more likely to use the dollar format, and are also less likely to mention their tax rates elsewhere in their disclosures, consistent with the choice of dollar format reflecting a firm's overall tax disclosure strategy. Analysts' tax expense forecasts are less accurate for dollar format firms, suggesting higher processing costs associated with tax-related disclosures for these firms.

2. Ontario's Corporate Income Tax: An Analysis of Effective Tax Rates

1993 ◽  
pp. 43-79
Author(s):  
David Sabourin ◽  
Stephen Gribble ◽  
Michael Wolfson
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Effective Tax Rates

scholarly journals Strategic Tax Competition in Switzerland: Evidence from a Panel of the Swiss Cantons

2009 ◽  
Vol 10 (1) ◽  
pp. 91-114 ◽  
Author(s):  
Lars P. Feld ◽  
Emmanuelle Reulier
Keyword(s):  
Tax Competition ◽  
Income Tax ◽  
Fiscal Federalism ◽  
Income Taxes ◽  
International Taxation ◽  
Tax Rates ◽  
Ceteris Paribus ◽  
Empirical Results ◽  
Production Factors ◽  
Swiss Cantons

Abstract Tax competition is discussed as a source of inefficiency in international taxation and in fiscal federalism. Two preconditions for the existence of such effects of tax competition are that mobile factors locate or reside in jurisdictions with - ceteris paribus - lower tax rates, and that taxes are actually set strategically in order to attract mobile production factors. It is well known from studies about Swiss cantonal and local income tax competition that Swiss taxpayers reside where income taxes are low. In this paper, empirical results on strategic tax setting by cantonal governments are presented for a panel of the Swiss cantons from 1984 to 1999. Completing the evidence on Swiss tax competition, income tax rates in cantons are the lower, the lower the tax rates of their neighbors.

ECONOMIC EFFECTS OF TAXATION BY INCOME TAXES (OUTLINE OF THE PROBLEM)

2019 ◽  
Vol 9 (1) ◽  
pp. 29-49
Author(s):  
Tomasz Wołowiec
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Income Tax ◽  
Income Taxes ◽  
Economic Effects ◽  
Personal Income Tax ◽  
Tax System ◽  
Economic Growth Rate ◽  
Tax Revenues ◽  
Gdp Growth Rate

Public discussions concerning tax system reforms are dominated by the view that lowering taxes is the only panacea for stimulating economic growth. But is this really so? To be able to answer this question we need to examine how the level of fiscal burden and structure of budget tax revenues are correlated with GDP growth rate (27 EU countries, data 2000-2018). A relationship that is particularly examined is the correlation between the level of fiscal burden in personal income tax and economic growth rate. Considerably less attention is paid in various analyses to the influence of the structure of budget tax revenues on economic growth.

Measuring Revenue-maximizing Elasticities of Taxable Income

2016 ◽  
Vol 45 (2) ◽  
pp. 174-204 ◽  
Author(s):  
John Creedy ◽  
Norman Gemmell
Keyword(s):  
Income Tax ◽  
Tax Rates ◽  
Marginal Rate ◽  
Tax System ◽  
Tax Rate ◽  
Taxable Income ◽  
Wide Range ◽  
The Us ◽  
Marginal Tax Rates ◽  
The Right

This article considers the question of whether marginal tax rates (MTRs) in the US income tax system are on the “right” side of their respective Laffer curves. Previous attention has tended to focus specifically on the top MTR. Conceptual expressions for these “revenue-maximizing elasticities of taxable income” (ETI L), based on readily observable tax parameters, are presented for each tax rate in a multi-rate income tax system. Applying these to the US income tax, with its complex effective marginal rate structure, demonstrates that a wide range of revenue-maximizing ETI values can be expected within, and across, tax brackets and for all taxpayers in aggregate. For some significant groups of taxpayers, these revenue-maximizing ETIs appear to be within the range of empirically estimated elasticities.

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