Current Tax Base Research Articles

“There’s nothing left to tax”: the effects of automobility on the downtowns of America’s mid-size cities 1913–2013

ABSTRACT This article uses digitized Sanborn fire insurance maps and property tax data to assess the combined effects of highway construction and the increase in parking in downtown Bridgeport, CT. We find that between 1913 and 2013, Bridgeport lost nearly 1.9 million square feet of taxed effective square feet to interstate construction and devoted another roughly 2.2 million square feet to surface parking. Using 2013 tax rates, we find that property tax revenue shrank to just over a quarter of 1913 levels, from a projected $19 million (in 2013 dollars) in 1913 to $5 million in 2013. Land use also became less diverse and more concentrated, dominated by large commercial and tax-exempt parcels. The concentration and lower tax revenue reduced the resilience of downtown. This paper provides a new method to estimate the effects of highway construction and develop predictions for the effects of highway removal. We estimate that $3 million in tax revenue could be restored by highway removal, and a further $2 million by building housing on surface parking lots, doubling the current tax base. Increasing residential uses downtown would be particularly useful in restoring the diversity of uses, supporting neighborhood retail, and providing citizen advocates for downtown.

The Rent Tax Is Too Damn Low

Economists and philosophers discuss taxation in the context of the prevailing tax base. This prevailing tax base primarily consists of levies on earned income, capital, and consumption. In the optimal tax literature, economists find that this tax base possesses a problematic tradeoff between equity and efficiency. This tax base is also controversial amongst moral philosophers because it diminishes the principle of labor ownership. I explore a tax base that does not possess these two drawbacks and hence sidesteps problems with the current tax base raised both by optimal tax theorists and moral philosophers. Even partial replacement of the current tax base with the proposed tax base would increase efficiency, improve equity, and preserve labor ownership.

The arithmetics and politics of domestic resource mobilization for poverty eradication

The Addis Ababa Action Agenda stresses the importance of effective resource mobilization and use of domestic resources to pursue sustainable development. The first Sustainable Development Goal is to eradicate extreme poverty for all people everywhere by 2030. This paper explores how feasible it would be for developing countries to achieve the goal of eradicating poverty using only domestic resources, given their current tax base and political equilibrium. To answer this question, we propose two new metrics: a Poverty Eradication Capacity Index and a Political Influence Concentration Index. The first metric looks at the “arithmetics” of the issue, and uses an accounting approach to assess whether the existing tax base is rich enough to end poverty through monetary redistribution. The second metric looks at the “politics” of the issue, and approximates the degree to which political power is concentrated among the rich—following the notion that a high concentration of power would likely hinder the effective implementation of fiscal policies (in terms of both revenue collection and social spending). We calculate these two metrics using data for over 120 developing countries, and find that: (i) a large proportion of countries simply do not have an affluent enough tax base to finance their own poverty eradication through redistribution; (ii) countries with the same arithmetic capacity to mobilize resources for poverty eradication differ widely in terms of the political feasibility of such policies; and (iii) a higher capacity for poverty eradication and a lower concentration of political influence is associated with a higher collection of tax revenue as a share of GDP. These results suggest that countries facing binding arithmetic and/or political constraints may need to complement domestic resources with foreign aid in the short-term. Such financial flows, however, should be designed to support the reduction of these constraints in the long-term.

PERPPU NOMOR 1 TAHUN 2017 TENTANG “AKSES INFORMASI KEUANGAN UNTUK KEPENTINGAN PERPAJAKAN” DAN IMPLIKASINYA TERHADAP LEMBAGA KEUANGAN DI INDONESIA

<p>Access of tax officers to the financial industry customers is set forth in Perppu No. 1 2017Th, the issuance of this rule is closely linked to the financial information exchange agreement between the Automatic Exchange of Financial Account Informce (AEoFIA) organized by Member States of the Organization for Economic Co-operation and Development (OECD), including Indonesia. At the same time the Perppu is at the same time the capital of the tax authorities to pursue the tax target. The tax authorities are authorized to request additional information and evidence from financial institutions, as the latter annuls several articles which have been the secret locking of financial industry customers. This Perppu will raise tax revenues given the low acceptance of the current tax base. Nevertheless this Perppu would be perfect if it could be metamorphosed into Law.</p>

Poverty and distributional effects of a carbon tax in Mexico

Mexico recently declared ambitious goals in reducing domestic CO2 emissions and introduced a carbon tax in 2014. Although negative effects on household welfare and related poverty measures are widely discussed as possible consequences, empirical evidence is missing. We try to fill this gap by simulating an input-output model coupled with household survey data to examine the welfare effects of different carbon tax rates over the income distribution. The currently effective tax rate is small and has negligible effects on household welfare. Higher simulated tax rates, maintaining the current tax base, show a slight progressivity but welfare losses remain moderate. Welfare losses, regressivity and poverty rise more with widening the tax base towards natural gas and the other greenhouse gases methane (CH4) and nitrous oxide (N2O) mainly through food price increases. For a complete analysis of the policy, we simulate a redistribution of calculated tax revenues and find that the resulting effects become highly progressive, also for high rates, wider tax bases and even in the absence of perfect targeting of social welfare programs.

Is energy performance too taxing?

PurposeBuildings contribute significantly to CO2 production. They are also subject to considerable taxation based on value. Analysis shows that while similar attributes contribute to both value and CO2 production, there is only a loose relationship between the two. If we wish to use taxation to affect policy change (drive energy efficiency behaviour), we are unlikely to achieve this using only the current tax base (value), or by increasing the tax take off this current tax base (unlike extra taxation of cigarettes to discourage smoking, for example). Taxation of buildings on the basis of energy efficiency is hampered by the lack of current evidence of performance. This paper aims to model the now-obligatory (at sale or letting) energy performance certificate (EPC) data to derive an acceptable appraisal model (marked to market, being the EPC scores) and deploys this to the entire population of properties. This provides an alternative tax base with which to model the effects of a tax base switch to energy efficiency and to understand the tax incidence effects of such a policy.Design/methodology/approachThe research uses a multiplicative hedonic approach to model energy efficiency utilising EPC holding properties in a UK jurisdiction [Northern Ireland (NI)] as the sample. This model is then used to estimate discrete energy assessments for each property in the wider population, using attributes held in the domestic rating (property tax) database for NI (700,000+ properties). This produces a robust estimate of the EPC for every property in its current condition and its cost-effective improved condition. This energy assessment based tax base is further used to estimate a new millage rate and property tax bill (green property tax) which is compared against the existing property tax based on value to allow tax incidence changes to be analysed.FindingsThe findings show that such a policy would significantly redistribute the tax burden and would have a variety of expected and some unexpected effects. The results indicate that while assessing the energy performance of houses can be a complex process involving many parameters, much of the explanatory power can be achieved via a relatively small number of input variables, often already held by property tax jurisdictions. This offers the opportunity for useful housing stock modelling – such as the savings possible from power switching. The research also identifies that whilst urban areas display the expected “heat island” effect in terms of energy consumption, urban properties are on average more efficient than suburban/rural properties. This facilitates spatial targeting of policy messages and initiatives.Research limitations/implicationsAnalogous with other studies, data deficiencies introduce the risk of omitted variable bias. Modelling of the energy efficiency in the sample is limited to property attributes that are available for the wider population of properties. While this limits the modelling exercise, it is a perennial issue facing mass appraisal worldwide (where knowledge of the transacted sample attributes generally exceeds knowledge of the unsold properties). That said, the research demonstrates the benefits of sharing data and improving knowledge of the housing stock, as taxation databases would be stronger, augmented with EPC-derived property attributes for example.Originality/valueThe EPC lead in time for wide residential coverage is likely to be considerable. The paper contributes to emerging literature and policy debate surrounding the effect, performance measurement and implementation of energy efficiency certification, through a greater understanding of the sectorial and geographical dispersion of energy efficiency. It provides high level research to help guide policy and decision-making, identifying key locales where there is more of a physical problem and locations where there is more to gain in terms of targeting energy improvement and/or encouraging behavioural change. The paper also allows a glimpse of the implications of a change towards a taxation regime based on energy efficiency, which contributes to the debate surrounding the “greening” of property based taxes.

Raise Top Tax Rates, Not the GST

This paper argues that increasing the GST, by raising the rate above 10 per cent while retaining the current tax base, or by broadening the base to include all forms of consumption expenditure, does not offer a solution to the widely perceived problems of the Australian tax system. The direct, regressive effects of such GST changes are well understood. We argue here that when we also take into account the effects of the measures, generally accepted as a corollary of the policy, that are required to compensate low income households, not only will the regressive distributional effects be exacerbated, but serious losses of economic efficiency will also result. Our analysis supports the proposition that raising tax rates across top incomes would be a far more equitable and less distortionary reform than raising the GST.

Komparace zdanění CO2 v zemích evropské unie

The European Commission is going to discuss a revision of Directive 2003/96/ EC, restructuring the Community framework for the taxation of energy products and electricity. The first proposals include a new energy taxation system, where the current energy tax is divided into two components - an energy component and a CO2 component. This article first presents theoretical concepts regarding environmental and CO2 taxation; then it concentrates on current national systems of CO2 taxation in European Union Member States with a focus on the energy and transport sectors. After making an overview of CO2 taxation, the article focuses on a comparison of national systems of CO2 taxation and indicates similarities in the taxes in their application in both the energy and transport sectors. The authors deal with all taxes that have their current tax base based on CO2 emissions or have CO2 emissions as one part of their tax base. The analysis is provided for a period until the end of 2009. Finally, the results of the comparison of CO2 taxation are discussed. The article also includes a brief overview of existing ex-post analysis of CO2 taxation in the Nordic countries of the European Union.

The Taxation of Income Available for Discretionary Use

The signature tax policy tension of the last two decades (at least) has been whether the federal tax base ought to reach income or only consumption. At the individual level, the current Internal Revenue Code (payroll taxes aside) incorporates an income tax base with numerous consumption tax components - provisions that allow either immediate deduction of a non-consumption capital expenditure (as under a cash-flow consumption tax), such as qualified pension plan and IRA savings, or exclusion of the returns to capital (as under a wage tax), such as the exclusion for home sale gain and Section 103 interest. (A more subtle wage tax feature is the reduced tax rate, at the individual level, of most capital gain and dividend income; a pure wage tax would apply a zero rate.) The hybrid nature of the current Code is often said to be the chief indicator that it is theoretically dysfunctional (as well as inexcusably complex on an administrative level). The confluence of income and consumption tax provisions seems to indicate that we simply can't make up our minds which base is best, and thus we've enacted a hodgepodge of provisions from both worlds, picking and choosing here and there from both menus. But there is, I believe, a persuasive argument that this debate misses the point, after all. I think the key to understanding the theoretical construct underlying our desires for the ideal tax base - as well as the key to improving current law - is that we wish to protect from taxation wealth accessions spent on nondiscretionary consumption or saved for future nondiscretionary consumption. This distinction between discretionary and nondiscretionary income, first explored several decades ago by Canada's Royal Commission on Taxation in connection with a progressive rate structure, has significant explanatory force with respect to several key provisions in our current tax base and offers a promising route to significant reform. After discussing that study, the paper discusses the Nondiscretionary Deduction that is proposed as a replacement for the Standard Deduction, the Personal and Dependent Exemption Deductions, the Child Tax Credit, the Qualified Residence Interest Deduction, the Deduction for State and Local Taxes, and perhaps the Dependent Care Credit and the Hope and Lifetime Learning Credits. The Nondiscretionary Deduction that I propose would be keyed to median nondiscretionary outlays rather than the actual outlays of each taxpayer, although the amount of the deduction would be derived under a check-the-box format that takes into account relevant taxpayer status criteria (such as household size, whether the taxpayer owns or rents a home, perhaps whether the taxpayer or dependent is a full-time student in higher education, etc.). While a nice side effect of this approach would likely be significant simplification, it is based in principle - in a rationalization of the implicit values underlying current law - and not on a desire for simplicity for its own sake. If discretionary income is more fairly taxed than nondiscretionary income, the paper also argues that the reduced tax rate for net capital gain and dividend income, as well as a blanket exclusion for home sale gain, is not defensible (though integration of the individual and corporate taxes would be). Moreover, large gratuitous receipts (above an administratively feasible exemption amount of, say, $25,000 per year), whether received as an inter vivos receipt or at death of the transferor, should be included in the recipient's tax base. All included in-kind receipts could then take a fresh, fair market value basis, as under current section 1014 (section 1015 would be retained only for in-kind receipts excluded under the de minimis rule), and the wealth transfer taxes (the estate, gift, and generation-skipping tax regimes) could be permanently repealed.

The Politics of Revenue Mobilisation: Explaining Continuity in Namibian Tax Policies

The article analyses the development of Namibia's system of taxation since independence in 1990. Drawing on the institutional literature derived from Western historical experiences, it suggests that politicians face four main constraints when seeking to increase revenue. These constraints relate to (a) the governments' bargaining position vis-à-vis their citizens, (b) the nature and capacity of the political institutions of government, (c) the structure of the economy, and (d) the international context. These four constraining factors structure the analysis of Namibia's tax policies since independence in 1990. Ten years after Namibia gained its independence from South Africa, the system of taxation is only marginally different from that established under colonial rule. This article argues that the SWAPO government has maintained a dualism of liberal economic policies and relatively progressive social policies due to the revenue windfalls from the Southern African Customs Union (SACU). Namibia's current tax base is challenged, however. The ongoing processes of regional and international trade liberalisation may reduce the revenues from SACU by one-third within the next few years. In the near future the Namibian government may therefore have to make a choice between extracting more revenues from its wealthy minority or widening the tax net to include a greater share of the population currently not included in the tax net. Based on the economic, political, institutional and international constraints on the government's revenue mobilisation, the article suggests that in the short run, there will be few ‘politically easy’ solutions open to the Namibian government.