Cent Tax Research Articles

Crypto Conundrum: Ban or Limited Nod

This article tries to find out the current concerns regarding the crypto currency. India has been engaged in a fierce debate over crypto currency. In India, crypto currency has been treated very conservatively, with the RBI imposing a ban. Although the ban has been reversed, the central bank’s position has not changed. India is on a dual path of trying to regulate or even ban crypto currencies while at the same time encouraging the use of block chain technologies. The Government of India adopted a conservative stance on taxation by announcing a flat 30 per cent tax rate on income from digital virtual assets, or crypto, in the Budget 2022. The Government has also launched e rupee. One of the issues in G20 summit in September,2023 is regulation of crypto currency. But still, it’s impossible to predict when or in what form the crypto law will get through in India’s Parliament. Different countries have their own ways of regulating crypto currency, but it is safe to say that India has so far been among the most closed to crypto currencies. Considering the global nature of trade nowadays even an international crypto currency can be evolved & regulated by international agencies like IMF and World Bank.

Uncalculated first‐party externalities given a beverage tax

AbstractObjectiveWith many characterizingobesity as a national priority, the U.S. Government is considering a 1, 2, or 3 cents‐per‐ounce (cpo) federal sin tax on soda products. Because prior research finds that consumers substitute equally, if not more, dangerous nicotine products with a tobacco sin tax and common alcohol‐like household goods with alcohol prohibition, this research sets out to determine whether the imposition of a soda sin tax produces similar first‐party externalities.MethodAdaptive conjoint analysis is utilized among respondents across several regions of the United States, including actual soda consumers.ResultsThis study finds that given a soda sin tax, soda consumers do not substitute healthier beverages, that is, beverages with relatively fewer calories and grams of sugar and sodium, such as water, pure fruit juice, or unsweetened tea. Instead, soda consumers switch to other sugary beverages not considered in most legislation, such as sweetened coffees, teas, or sports drinks, or continue consuming soda at tax rates of 2 and 3 cpo after the shock of a 1 cent tax wears off.ConclusionUnlike prior research examining decreased soda consumption across a general marketplace, this research offers insight into potential externalities among the key transacting actors in such an exchange: soda consumers.

Determinants of housing prices: evidence from Ontario cities, 2001-2011

Determinants of housing prices: evidence from Ontario cities, 2001-2011

The history of the South African sugar industry illuminates deeply rooted obstacles for sugar reduction anti-obesity interventions

ABSTRACTSouth Africa suffers from a considerable health burden including communicable disease, violence and injury as well as non-communicable diseases. Its formal health system is significantly challenged. Reducing morbidity and mortality for all South Africans requires an approach that transcends health services, where public policy addresses the broader social determinants of health by designing and implementing interventions that improve people’s health more effectively than individual interventions within the health sector. Legislative, regulatory and fiscal policies could substantially and cost-effectively reduce the burden of nutrition-related non-communicable diseases. South Africa has successfully reduced the salt content of foods and there is evidence demonstrating that a 20 per cent tax on sugary beverages will reduce obesity. Facilitators and barriers for such interventions have been covered in a separate article. Some challenges are particularly difficult to overcome. This article focuses on the deep historical roots of the South African sugar industry and its influence on dietary sugar consumption at the population level. The sugar industry is a prime example of a colonial activity shaping the economy, polity, penetration of sugar content into food products, and diets over an extended historical period. In the modern, and specifically the post-apartheid, period the sugar industry has proved resilient. The priority for black empowerment in policy matters since the end of apartheid, and recent economic policy, have facilitated the promotion of products regardless of their known economic, social and health harms. These pressures have led contradictorily to the retention of a large privileged sector in the South African sugar industry, while simultaneously enriching a few select black entrepreneurs on the one hand, and impoverishing the greater number of small and informal producers on the other. Similar developments have characterised the South African experience with other harmful product industries – notably alcohol and tobacco. It is argued that understanding the historical roots and dynamics of the SA sugar industry illuminates the setting of a research agenda on policy processes involving the role of corporates producing harmful products.

Taxes on Land Rent

There is increased interest in land taxation in Australia and internationally, as reflected for example, in the Henry report on tax reform in 2010 and the UK Mirrlees Report in 2011. This interest stems from the immobility of land as a factor of production, which stands in contrast to other factors such as capital and labour. Logically, immobile factors can be taxed more heavily and with less efficiency cost than mobile ones. The interest in land taxation revisits the work of the 18th century reformer Henry George but in fact has antecedents going back to Ricardo and before. By making land more expensive to own, we can (somewhat paradoxically) make it cheaper to buy. At the extreme a 100 per cent tax on land rent reduces the capital value to the annual rental value; that is, to around 3-5 per cent of the untaxed value. A 5 per cent tax reduces the capital value of land by half, and a 1 per cent tax reduces it by 17 per cent. However the lump-sum nature of land taxes – and their high visibility to taxpayers – makes them politically very difficult to raise. The theoretical revenue available, which is one-third to one half of all Commonwealth tax revenue, may be practically unavailable.

U.S. Versus Sweden: The Effect of Alternative In-Work Tax Credit Policies on Labour Supply of Single Mothers

An essential difference between the design of the Swedish and the US in-work tax credit systems relates to their functional forms. Where the US earned income tax credit (EITC) is phased out and favours low and medium earnings, the Swedish system is not phased out and offers 17 and 7 per cent tax credit for low and medium low incomes and a lump-sum tax deduction equal to approximately 2300 USD for medium and higher incomes.The purpose of this paper is to evaluate the efficiency and distributional effects of these two alternative tax credit designs. We pay particular attention to labour market exclusion; i.e. individuals within as well as outside the labour force are included in the analysis. To highlight the importance of the joint effects from the tax and the benefit systems it appears particular relevant to analyse the labour supply behaviour of single mothers. To this end, we estimate a structural random utility model of labour supply and welfare participation. The model accounts for heterogeneity in consumption-leisure preferences as well as for heterogeneity and constraints in job opportunities.The results of the evaluation show that the Swedish system without phase-out generates substantial larger labour supply responses than the US version of the tax credit. Due to increased labour supply and decline in welfare participation we find that the Swedish reform is self-financing for single mothers, whereas a 10 per cent deficit follows from the adapted EITC version used in this study. However, where income inequality rises modestly under the Swedish tax credit system, the US version with phase-out leads to a significant reduction in the income inequality.

The poverty implications of high oil prices in South Africa

AbstractAn energy-focused macro-micro approach is used to assess the poverty implications of government policy response to increases in international oil prices in South Africa. The first scenario assumes that increases in international oil prices are passed on to end users with no changes in government policy instruments. In this scenario, poverty indicators increase. The second scenario assumes that the world price increases are nullified by a price subsidy by the government. This scenario still leads to an increase in poverty as the beneficial price effect is cancelled out by a decline in households’ income induced by the financing method used. While revenue generated from a 50 per cent tax on windfall profit of the petroleum industry helps to minimize the loss in government revenue, it does not contribute to mitigating the increasing poverty trend, since the decline in saving and investment under this scenario restricts the country's growth, employment and income distribution perspectives.

Taxing times for trustees

This article analyses the proposed income tax changes introduced by the 2008 Budget and the likely impact of those changes on trustee investments. It assesses the tax treatment of investment bonds, segmentation and the opportunity in the current economic climate for trustees to reassess their investment strategies. As if the role of the trustee was not difficult enough, in the Pre-Budget report in November 2008, the Chancellor announced the proposed increase in income tax rates from the tax year 2011/12. The actual budget revealed the true extent of the increases and also a shorter time frame before these changes take effect, certainly adding to the trustees’ load. His increase in the income tax rate to 50 per cent for those individuals with income of more than £150,000, brought with it a commensurate increase in the trustees tax rate which applies to income from the tax year 2010/11. Rather harshly, the increase for trustees is significantly worse than for highly paid individuals and is further evidence of the Government’s dislike of trusts by disproportionately penalizing them. The increase for trustees is significantly worse than for highly paid individuals For individuals, the increased rate will apply to income above the £150,000 threshold, whereas for trustees of discretionary trusts, it will apply to all income above the standard rate band, currently £1000. This disparity between the taxation of individuals and trusts does seem unfair when lined up together and will have significant impact on affected trusts. Changes in tax rates This trustees’ income tax rate rise from 40 to 50 per cent gives the Chancellor an increase in the tax take of 25 per cent from this source assuming he does not increase the standard rate band for trusts. Dividend income is also affected; the increase from 32.5 per cent tax to 42.5 per cent represents a further 30 per cent increase in the tax take for the Chancellor. This represents a significant tax feast for the Government without too much political damage. Let’s look at some examples of how the changes will work, assuming income received is above the £1000 standard rate band. Trustees will normally receive deposit interest after a deduction of 20 per cent tax, so a payment of £1000 to the trustees would be grossed up by the 20 per cent tax credit to calculate the tax due, a gross figure of £1250. With tax due of £625.00 and a tax credit of £250.00, trustees pay an amount of £375.00 to HMRC, leaving the sum of only £625.00 for distribution to

Natural resource use conflict: gold mining in tropical rainforest in Ghana

Gold is frequently mined in rainforests that can provide either gold or forest benefits, but not both. This conflict in resource use occurs in Ghana, a developing country in the tropics where the capital needed for mining is obtained from foreign direct investment (FDI). We use a dynamic model to show that an ad valorem severance tax on gross revenue can be used to internalize environmental opportunity costs. The optimal tax must equal the ratio of marginal benefits from forest use to marginal benefits from gold extraction. Furthermore, the tax should increase (decrease) when adjusted net return on all other assets in the economy is higher (lower) than the growth in the price of gold. Empirical results suggest that the 3 per cent tax rate currently used in Ghana is too low to fully represent the external cost of extraction (i.e., lost forest benefits).

The most popular tax in Europe? Lessons from the Irish plastic bags levy

There have been occasional ad hoc efforts to influence consumer behaviour by the imposition of product taxes that reflect external costs imposed by such products that are not initially included in their price. In the spirit of this idea, in 2002 Ireland introduced a 15 Euro cent tax on plastic shopping bags, previously provided free of charge to customers at points of sale. The effect of the tax on the use of plastic bags in retail outlets has been dramatic—a reduction in use in the order of 90%, and an associated gain in the form of reduced littering and negative landscape effects. Costs of administration have been very low, amounting to about 3% of revenues, because it was possible to integrate reporting and collection into existing Value Added Tax reporting systems. Response from the main stakeholders: the public and the retail industry, has been overwhelmingly positive. Central to this acceptance has been a policy of extensive consultation with these stakeholders. The fact that a product tax can influence consumer behaviour significantly will be of interest to many policymakers in this area. This paper analyses the plastic bag levy success story and provides insights and general guidelines for other jurisdictions planning similar proposals.

Global Distributive Justice, Entitlement, and Desert

The facts of global poverty are staggering. Consider, for instance, how 1.5 billion people subsist below the international poverty line, which means about a quarter of the world's current population lives in poverty. There is much talk about how freer markets will help the situation of these people, in particular how it will help the worst off. So far the evidence for this claim is fairly unclear. ‘At any rate, on several accounts, alleviating the worst aspects of poverty would impose fairly small costs on us in more affluent countries, yet we continue to do very little about alleviating this situation. For instance, a 1 per cent tax on world product would make enormous inroads in lifting people out of poverty. Alternatively, simply a shift in priorities could do this without any added taxes: a 1 per cent decrease in military spending in the developed world and a 10 per cent decrease in military spending in the developing world could have the same effect.

Magazines and the Canadian Dream

IN 1960 THE NOVELIST, Hugh MacLennan, wrote a letter that found its way to the desk of Prime Minister John Diefenbaker. 'I have never been more depressed in my life about the future of Canada than I am at the moment,' lamented MacLennan. 'This magazine situation has brought our danger into sharp focus. It has made me see what even six months ago I could not see at all: that if the present trend continues, the Canadian dream will be dead inside fifteen years.' Canada's soul was expressed through its media, 'in its attitude toward itself,' but this identity was threatened if the only ideas expressed about Canada were those from American outlets. 'Do you think that I, or any of us, could have debated the variety of Canadian issues if this country had possessed no outlets of her own?' MacLennan resented 'the old Liberal habit of pussy-footing around these issues' and had hoped for a change when the Conservatives came to power. 'But this magazine affair has really shaken me, and I cannot avoid the conclusion that the gravest mistake the [Progressive Conservative] government ever made was the repudiation of the advertising tax.(f.1)In the 1950s and 1960s, when Canadian magazines were experiencing serious financial difficulties, their American competitors held 80 per cent of the Canadian market.(f.2) The battle was on two fronts. Foreign magazines - mostly American - spilled across the border and competed with Canadian periodicals for readership. 'Split-run' editions of American magazines, issues with advertising directed at the Canadian market but foreign content derived from the American edition, also vied with Canadian publications for limited advertising dollars. Canadian magazines had trouble competing with the split-run editions which had lower editorial costs, could charge much lower advertising rates, and reached a broader audience than their Canadian counterparts.In his March 1956 budget, the Liberal finance minister, Walter Harris, introduced a 20 per cent tax on the advertising revenues of split-run editions because he believed that domestic magazines could not compete with the Canadian editions of American periodicals and would disappear if the government did not act. 'Even this 20 per cent tax would be only a holding operation and more help would probably have to be provided in a few years time,' he told cabinet. One of his colleagues, unidentified in the official minutes, stressed the importance, 'from the point of view of Canadian culture and the development of a national public opinion, to preserve Canadian magazines. Protection, even of the most blatant kind, could be justified on these grounds.'(f.3)Prime Minister Louis St Laurent and the American president, Dwight Eisenhower, discussed the magazine tax during a meeting at White Sulphur Springs, West Virginia, only days after Harris's budget. Eisenhower said that Time magazine had been putting pressure on the State Department and the White House to oppose the tax. St Laurent explained that American magazines dominated the Canadian market. The measure was not designed to kill foreign periodicals but to ensure that Canadian publications survived. The president admitted that he had not heard this side of the issue, but his government continued to oppose the tax.(f.4) In July, in a formal note to the Canadian embassy in Washington, the United States argued that the tax 'would have a discriminatory effect in practice and be injurious to established USA business interests.' The Americans worried that the tax 'would set an undesirable precedent for other countries which could create difficulties for USA periodicals.' They subtly warned Canada that the measure 'would be a significant reversal of the trend toward development of commercial relations' between the two countries and asked the Canadian government not to proceed with its enactment. In the face of this protest, Harris considered withdrawing the tax and replacing it later with a more lasting form of support for Canadian magazines, but decided not to back down from the original proposal. …

An Analysis of the Implications for the Gold Mining Industry of Alternative Tax Policies: A Regional Disaggregated Model for Australia*

We construct a dynamic model of the Australian economy that has a regional sub‐section representing Western Australia. Within the West Australia sub‐economy, there is a separate technology for the gold mining industry. We implement the model, and simulate a 2.5 per cent tax on gold exports. The outcome shows no fiscal improvement at the national level, although the West Australian budget improves slightly. Real income falls both nationally and in West Australia as the trade balance deteriorates, and an increased real interest rur‐ causes investment to fall. We conclude that the taxation of gold exports leads to few measurable benefits.

Trade, taxes and debt repayment in Sri Lanka

The purpose of this article is to estimate the cost of taxing the export, import or domestic sectors of Sri Lanka for the purpose of reducing the national debt. A simple GNP model is used to estimate the elasticities that characterise the three aggregate sectors and are used to simulate the effects of taxing for debt servicing. The results show that a tax on the import sector generates the largest net savings on trade balance and that the savings from not importing can be substantial. However, for the period 1977–87 a 10.0 per cent tax on the import sector caused a decline in the growth of the economy by 3.0 per cent. The burden of the tax falls heavily on the domestic sector in terms of lost production and increased unemployment.

American Theatre Versus the Congress of the United States: The Theatre Tax Controversy and Public Rebellion of 1919

For eight days in January 1919 the theatre industry was at war with the U.S. Congress, a nationwide event surprisingly overlooked in previous theatre history. Theatre management and its host of workers joined with the public to wage a well-orchestrated campaign in the newspapers and mail, in the theatres and on the streets to stop what was perceived as a gross injustice to the American theatre and its paying audience.When the United States Congress was framing a six billion dollar tax revenue bill to recover exorbitant war costs from the first world war, it attempted to slip in a new tax which would raise theatre admissions by ten per cent in order to return between seventy-five and eighty-one million dollars to the government. The original bill levied a twenty per cent tax on all tickets of admission above thirty cents (thus most movie houses were exempt). In addition box seat holders at theatres and the opera were to be taxed twenty-five per cent.

THE IMPACT OF THE 150 PER CENT TAX CONCESSION FOR INDUSTRIAL RESEARCH AND DEVELOPMENT IN AUSTRALIA — A PRELIMINARY ASSESSMENT

The paper has two main objectives. First, it provides the background and rationale for Australia's introduction of the 150 per cent tax concession for IR&D in order to appreciate some of the problems of its implementation. Secondly, it assesses the effectiveness of the concession in promoting IR&D. The latter requires estimation of the impact of the concession on the user cost of IR&D and the responsiveness of the demand for IR&D to changes in its user cost.

What Kind of Tax Reform Do We Really Need?

>. The Treasury's well-leaked September options paper set forth several proposals affecting corporations, among them an extension of the investment tax credit to include bricks and mortar, a small reduction in the basic corporate tax rate, relief from the double taxation of corporate dividends and elimination of the infamous lunch as a tax deductible expense. The most novel proposal is the reduction in the double taxation of dividends. Under most approaches to the of corporate and shareholders' income taxation, shareholders would gain. In addition to the corporation's dividend, each would receive, for some portion of the actual U.S. taxes paid by the corporation, a tax credit of the same dollar amount per share. The shareholder could use this credit to reduce his federal tax liability, dollar for dollar, on wages and salary as well as on dividend income. Unfortunately, partial integration has several drawbacks. To begin with, the importance of the tax credit depends on the investor's marginal income tax bracket: A per-share credit of a given amount will offset a larger portion of the lower tax bracket investor's tax. Then too, net of the credit, the low bracket investor's tax will be an even smaller fraction of the higher bracket investor's than it is now-a result that hardly seems compatible with the President's avowed intention of creating a fairer tax code. Furthermore, the tax credit will have no value at all to investors who do not pay U.S. income taxes. Corporations that pay low effective U.S. income taxes, such as financial institutions holding taxexempt municipals and multinational corporations paying the bulk of their taxes to foreign governments, would be at a disadvantage in competing for capital against corporations bearing the same overall tax rate, but paying a higher proportion of their total tax bill to the U.S. government. The simple way to benefit corporate capital investment is to cut the basic 48 per cent tax rate. Coupled with some trimming in personal income tax rates, such a cut could speed up the pace of economic activity, eventually generating higher revenues that would largely offset the Treasury's initial revenue loss. A reduction in the corporate tax rate would also reduce the value of business tax preferences and expense deductions including three-martini lunches. o

Stabilization Policy and Inflation

The projected course of economic activity for this year is discussed in the 1969 Economic Report of the President, which was presented to Congress on January 16. The appended report of the outgoing Council of Economic Advisers projected total spending in the fourth quarter of 1969 to be 6 per cent above fourth quarter 1968. Though their estimate is labeled a forecast, it may be considered, more appropriately, a target or plan in the spirit of the Employment Act of 1946. To achieve this 6 per cent target growth in total demand, the outgoing Administration proposed a budget consisting of a 5.5 per cent increase in Federal spending in the year ending fourth quarter 1969, and continuation of the 10 per cent tax surcharge to mid-1970.

The Influence of Henry George's Ideas Upon Modern Japan

the United States of America, were introduced into Japan as one of the European and American systems of social thought which were imported during the early days of the Meiji period. It was a few years after the publication of his Progress and Poverty (1879). In the twentieth year of Meiji (1887), the name of Henry George appeared in a Japanese periodical. Before entering into the matter, let us state briefly the social conditions of Japan in those days. The Meiji Restoration Government had a historical mission to abolish feudal systems and to promote rapid progress of capitalism in Japan. Abolishing the feudalistic possession of land, the government acknowledged private landownership. The sale, division, annexation, mortgage and tenancy of land were permitted. Consequently, private property in land became the sole means of capitalistic exploitation and fell into the hands of a small number of landowners. As the protection and aid of modern industries and modern preparedness for war, under the strong pressure of higher capitalism in foreign nations, made it necessary to solidify the financial basis of the country, the government, in 1873, revised the system of land taxation from the tax in kind (rice) in proportion to the annual yield to a 3 per cent tax in money on the assessed value of land. This revision of the land tax system, with the rapid progress of moneyeconomy, and especially with the unbalanced progress between urban and rural communities, facilitated the capitalization and concentration of land. The 0.5 per cent reduction in the land tax in 1877, and the inflation policy since the same year, favored the primitive accumulation of capital in the hands of landowners. The reduced amount was a gain to landowners, and an abnormal rise in the price of rice owing to the inflation of the currency added to the profits of landowners. On the other hand, the independent farmers got nothing from the re

A Philosophy for Exploration

Factors Influencing Exploration Oil finding is not a precise science; therefore, it must be guided along philosophic lines. Oil is where you find it, and potential oil areas can be classified as either fairway or long-shot, with all shades of gradation between the two. True fairway areas, themselves, have many gradations and classifications. In South Texas along the Frio-Vicksburg trend, for example, oil is found from 4,000 to 6,000 ft in wells which cost a bare $50,000. The majority of land there is held in small tracts, and it is not uncommon for a wildcat well to be drilled on a 320-acre lease. The ratio of discovery to dry hole is good, but it is exceedingly difficult to find large oil accumulations. Nothing is more discouraging than to have made a discovery or two and then find that only 1 million bbl have been added to reserves. Admittedly 1 million bbl of oil is a real asset, but for the company that produces that amount in a week or a month it does not help much to maintain reserves. The Miocene belt of Coastal Louisiana is another typical fairway area. Ratios of discoveries to dry holes are favorable there also, and leases on relatively large tracts of land are sometimes available. Producing sands are sometimes thick, and discovery often leads to developing important large oil and gas reserves. On the other hand, most of the area is inaccessible and the pay sands are deep. Wells usually cost more than $250,000 to drill and, in some areas, can consistently cost twice that much. Large reserves can be discovered so that costs per barrel for finding oil are competitive. In such an area, the larger companies can hope to build reserves. Other factors influence the choice of an area for exploration. Competition is always present, and the type of this competition is an important consideration. Areas such as South Texas are ideally suited for the small operator, to whom drilling of a $50,000 well is a big event in the year. The small operator will find ready financial assistance from the "high tax rate boys", and he probably will spread his risk by having only a piece of several wildcats. Something about being in the 75 to 90 per cent tax bracket causes people to want to participate in any old play-particularly in the last quarter of the tax year. As a result of this urge and the willing cooperation of small wild-catters, lease costs, royalty rates and brokers overrides all increase-and the sizes of lease blocks decrease. A pattern becomes established for the area.