Excess Payments Research Articles

Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany

The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations.

Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany

The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations.

Legal Means to Prevent Unjustified Payment of Pensions to Citizens Living Abroad

Introduction. The legislation of the Russian Federation provides for the possibility of paying most types of pensions to those citizens whose place of permanent residence is a foreign state. At the same time, permanent residence of a pensioner abroad increases the risk of unjustified payment of pensions and creates the need to use additional legal means aimed at preventing such consequences. Purpose. The purpose of the study is to describe the system of legal means that are aimed at preventing unjustified payment of Russian pensions to citizens living abroad, and to analyze the provisions of Russian and international legal acts that establish these legal means. Methodology. To achieve these goals, formal legal (dogmatic) method and comparative legal method were mainly used. Results. The system of legal means to prevent unjustified payments to those Russian citizens who permanently reside abroad includes legal means provided for by national legislation and the norms of international treaties concluded by the Russian Federation. The first group is represented mainly by additional obligations of the beneficiary to inform the pension agency about maintaining the grounds for payment of pensions (especially the duty to confirm being alive), failure to which, as a general rule, constitute grounds for the suspension of payment of pension. The legal means stipulated in international legal acts are based on the interaction of the competent institutions of the Contracting parties and are implemented, as a rule, without the participation of the pension recipient. Conclusion. The expansion of the list of States with which Russia has concluded international agreements on cooperation in the field of social security and the improvement of national legislation in this area should help reduce the number of cases of excessive payment of pensions to citizens living abroad.

The vexing relationship between socioeconomic status and health

In a recent issue of this Journal, Politzer, Shmueli, and Avni estimate the economic costs of health disparities due to socioeconomic status (SES) in Israel (Politzer et al., Isr J Health Policy Res 8: 46, 2019). Using three measures of SES, the socioeconomic ranking of localities, individual income, and individual education, Politzer and colleagues estimate welfare loss due to higher mortality, productivity loss due to poorer health, excess health care treatment costs, and excess disability payments for individuals with below median SES relative to those with above median SES. They find the economic costs of health disparities are substantial, adding up to between 1.1 and 3.1 billion USD annually—between 0.7 and 1.6% of Israel’s GDP.This paper is useful and informative. It is, to our knowledge, the first comprehensive quantification of the economic costs stemming from health disparities in Israel. In spite of many social policies designed to level economic opportunity and social welfare generally, by most measures, Israel is among the most unequal in the distribution of income among all OECD countries (Cornfeld and Danieli, Isr Econ Rev 12:51–95, 2015). Politzer and colleagues expose the magnitude and sources of health-related loss that Israel faces because of such inequality and shows how the costs of inequality are borne to some degree by all members of society. This short commentary discusses the complicated relationship between SES and health and puts the findings from Politzer and colleagues in the context of the international literature on the subject.

Feed-in tariff contract schemes and regulatory uncertainty

This paper presents a novel analysis of two feed-in tariffs (FIT) under market and regulatory uncertainty, namely a sliding premium with cap and floor and a minimum price guarantee. Regulatory uncertainty is modeled with a Poisson process, whereby a jump event may reduce the tariff before the signature of the contract. Using a semi-analytical real options framework, we derive the project value, the optimal investment threshold, and the value of the investment opportunity for these schemes. Taking into consideration the optimal investment threshold, we also compare the two aforementioned FITs with the fixed-price FIT and the fixed-premium FIT, which are policy schemes that have been extensively studied in the literature. Our results show that increasing the likelihood of a jump event lowers the investment threshold for all the schemes; moreover, the investment threshold also decreases when the tariff reduction increases. We also compare the four schemes in terms of the corresponding optimal investment thresholds. For example, we find that the investment threshold of the sliding premium is lower than the minimum price guarantee. This result suggests that the first regime is a better policy than the latter because it accelerates the investment while avoiding excessive earnings for producers or excessive payments for consumers.

Interest Rate in Pension Plan Premium Calculation

This research aims to analyze the relationship between the interest rate relationship is inversely proportional to the amount of the premium on the pension plan. The method used is to measure several variables, among others FSL (Future Service Liability), PVFSAL (Present Value Future Salary), PR (Pension Rate) and Premiums. Calculation, life annuity uses actuarial assumptions, one of which is the interest rate assumption, if the assumptions used are not in accordance with the actual conditions, then what happens is excessive payments or deficient payments. The interest rate has an influence in the process of calculating the defined benefit pension plan premium. Using the assumption of different interest rates (11%, 12 % and 13%), it is found that the interest rate relationship is inversely proportional to the amount of the premium. The results of this study are FSL, PVFSAL, PR and Premiums for the interest of 11%, 12% and 13% (participants aged 25 years) as follows 720,187.97; 554,000,24; 430,570.07 (FSL in Rupiah); 27,155,187.70; 24,922,770,59; 23,002,699.40 (PVFSAL in Rupiah); 2.6521; 2.2229; 1.8718 (PR in%) and 55,535.38; 46,546.85; 39,196.00 (Premiums in Rupiah)The higher the interest rate, the smaller the pension premium and vice versa.

Transfer Pricing on Intra-Group Financing in the Manufacturing Industry in Indonesia – An Essay on Tax Court Decisions (2014-2019)

The manufacturing industry has become the leading sector in Indonesia but also the most common source of transfer pricing disputes. The excessive payment of interest expenses that has caused the MNEs to suffer from years of consecutive losses remains questionable, compounded by the illogical debt-to-equity ratio. The Indonesian government formally introduced a set debt-to-equity ratio in 2016 for the second time. Its first introduction in 1983 was revoked in 1984 in a bid to attract foreign investors. Currently, an entity has to meet the enforced Indonesian anti-abuse rule, arm’s length principle and debt-to-equity ratio.

Fairtrade and Market Efficiency: Fairtrade-Labeled Coffee in the Swedish Coffee Market

Fairtrade labeling has the potential to increase market efficiency by connecting farmers to altruistic consumers who are willing to pay a premium for sustainability-certified products. A requirement for increased efficiency, though, is that the farmers’ benefits are larger than the Fairtrade processing costs and the excess payment by consumers that does not accrue to farmers; otherwise direct transfers to farmers would be more efficient. This paper analyzes how excess payment for Fairtrade-labeled coffee is distributed in the Swedish market, using information on production costs and scanner data on almost all roasted and ground coffee products sold by retailers. A key finding is that roasters and retailers get 61–70%, while producer countries, in this paper comprising coffee farmers, cooperatives, middlemen, exporters, and Fairtrade International, get 24–31%; Fairtrade Sweden gets 6–8%. These values are the upper and lower bounds that reflect assumptions made about the additional costs of producing roasted and ground Fairtrade coffee, given the cost of beans and the Fairtrade license. The Fairtrade label thus seems to create a coffee product that roasters and retailers can use to exploit their market power.

Israel's Bilateral Agreements with Source Countries of Migrant Workers: What is Covered, What is Ignored and Why?

The article explores the variety of matters that bilateral labor agreements (BLAs) could and should regulate for the protection of migrant workers, and then asks what led Israel, in the BLAs that it signed with source countries of migrant workers, to put such emphasis on protecting migrants during their recruitment (and especially to unsure non-payment of excessive recruitment fees) yet show so little concern in protecting them while in Israel and on their way back home. Three distinct theses are presented as possible explanations to this ostensible discrepancy: the care thesis (Israeli civil servants sincerely cared for the special hardships that recruitment fees inflicted on migrant workers on their way to Israel); the pressure thesis (the American State Department and the Israeli Supreme Court compelled Israel to address recruitment fees via BLAs), and the control thesis (Israeli Ministry of Interior realized that excessive recruitment fee payments curtail its power over migrant workers – as Courts are reluctant to confirm deportation of migrants who did not cover the cost of the recruitment fees that they paid – hence acted to eliminate such payments). Based on these three theses, the article also explores what could potentially motivate Israel to expand its future BLAs, in a way that they would not only protect migrants on their way to Israel, but also while they are in the country and on their way back home.

An Empirical Analysis of Payment Card Usage in India

A paradigm shift in the modus operandi of commerce across the globe has been significantly influenced by the payment card industry with brisk strides in digital technology. The blooming payment card industry has escorted the prosperity in economic growth of most of the countries. Besides, there exists a divergent level in subsuming card payment by different countries due to distinct social, economic and cultural background. In India, excessive use cash payments are due to offbeat business models and varied distinction in literacy levels. This paper aims to analyse outstanding payment cards in India by examining the number of cards in operation and the value of transaction in the past decade. Data from RBI source is collected to analyse for a period of eight years (2011-2019). The research finds that credit card penetration has increased by threefold with average growth of 15% YoY and debit cards increased by more than threefold with average growth of 19% YoY during the period of analysis. Yet, asymmetry between debit cards holders and credit card holders exists in India indicating credit card is still niche product. This provides platform for the payment card industry to unleash the potential to tap market in India.

The Myths and Facts of Patent Troll and Excessive Payment: Have Non-Practicing Entities (NPEs) Been Overcompensated? - A Commentary

The much-cited article ‘the Myths and Facts of Patent Troll and Excessive Payment: Have Non-Practicing Entities (NPEs) Been Overcompensated ’ by Jack J. Lu is fundamentally flawed and based on data which cannot be retrieved. The key error results from poorly defined samples, selected to substantiate the statement that hold-up does not exist and that Non-Practicing Entities are not overcompensated. Even if the article had succeeded in adequately selecting the samples subject to the analysis, the document would still fall short of determining what constitutes a comparable licensing agreement. Also, the findings cannot be verified as the article does not disclose the underlying data that leads to the conclusion that NPEs are not overpaid. Hence, the paper falls short of meeting three fundamental requirements of empirical research. There is no adequate selection of the two samples that are compared (the NPE sample and a vaguely defined sample of ‘other companies’), there is also no adequate selection of comparable rates and last but not least, the data cannot be retrieved. Other than that, the research paper suffers from the application of concepts which are not defined and lacks adequate references to the academic literature. These aspects taken together mean that it is not possible to draw any sorts of conclusions on the grounds of the analysis presented and render the article obsolete.

Proof-of-Work (PoW) Blockchain Network and Its Viability as a Payment System

This paper analyzes PoW blockchain network’s long-term cost ef- ficiency and short-term stability. Our equilibrium model builds upon the optimization problems of blockchain users and miners, and allows us to simultaneously determine token price, network hashrate, and user transaction fee. We prove that transaction fee bidding mechanism creates two types of welfare loss in the long- term: over-competition among users leads to excessive transaction fee payment; failure to realize fee’s positive externality on network security in user fee decision making also leads to a non-optimal fee level. By studying short-term feedback loop between network hashrate and miner income, we also prove that the network over- corrects itself and diverges when subject to a hashrate shock. We conclude that it has unstable equilibrium.

Decreasing the Premium Rate of Pension Insurance and the Sustainability of Pension Insurance Fund: Can You Have Your Cake and Eat It?

At present, the social insurance contribution rate of urban employees in China is as high as 40%. The excessive payment rate will bring heavy burden to enterprises and employees. Report of the Nineteenth National Congress of the Communist Party of China emphasizes the need to continue to reduce the premium rate of social insurance. However, as the degree of population aging deepens, the sustainability of social insurance funds is gradually being impacted. In this background, can we simultaneously achieve the two goals of reducing the social insurance contribution rate and fund sustainability? Taken the basic pension insurance for urban employees as an example, in the context of lowering the premium rate of social insurance, this paper uses the actuarial model to analyze whether social insurance funds can operate sustainably in the short-term （2019−2025） and medium-term （2019−2050）. Therefore, it provides an empirical reference for the government to promote the implementation of the tax reduction and fee reduction policy. The study finds that: （1） If there is no policy intervention, the fund will start to have a cumulative deficit around 2027. Since then, the cumulative deficit has expanded year by year. （2） In the short term, regardless of whether or not to introduce a policy to improve the financial operation of the fund, a further 1% reduction in the premium rate will not affect the sustainability of the fund. （3） After the implementation of the universal two-child policy, the fund is still running a cumulative deficit in 2027. （4） In the medium term, even if the universal two-child policy is implemented and the payment compliance is improved, the fund will start to have a cumulative deficit between 2029 and 2045; however, with the increase of payment compliance, the cumulative deficit scale shows a downward trend, and improving the payment compliance and implementing the universal two-child policy will not guarantee the realization of the two goals of reducing the payment rate and sustainable fund development in the medium term （2019−2050）. （5） After further delaying the retirement age, the fund will not run a cumulative deficit until 2050, and the cumulative balance will be 10.63−150.06 trillion yuan by 2050. Under this assumption, the fund will have a balance in 2050, thus creating a reduction room for 0.5−4.75 percentage point in the contribution rate; at the same time, it does not affect the sustainability of the fund. In summary, in the short term, the goals of reducing the premium rate of social insurance and fund sustainability can be achieved. But in the medium term, the introduction of policy adjustments can achieve the above two goals. Therefore, in order to reduce the burden of corporate contributions and ensure the sustainability of the fund, the government should encourage fertility, improve payment compliance, and implement a delayed retirement age policy as soon as possible.

A Multi-Objective Video Crowdsourcing Method in Mobile Environment

With the rapid development of mobile video services, HD and UHD videos are attractive for mobile users due to the realistic visual enjoyment and the accurate representation. However, the limited transmission bit rate in 4G communication network affects the experience of the users for watching videos. Crowdsourcing is considered as a reasonable and effective solution to alleviate the resource limitation. Through employing the crowdsourcing participants to download and transmit video segments, mobile users can get enhanced video services. However, it is still a significant challenge that how to avoid excessive payment and energy consumption when the crowdsourcing participants download the video segments for the mobile users. To address this challenge, a multi-objective video crowdsourcing method in mobile environment is proposed in this paper. Technically, the crowdsourcing participants apply device-to-device (D2D) communication technique rather than the cellular network or bluetooth transmission to transmit video segments to the mobile users. Here, we divide our problem into two situations, the single participant case and the multi-participants case. In the single participant case, we apply the improved dynamic programming algorithm to find strategies with more enhanced video service time that the crowdsourcing participants provide for the mobile users. Then Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) and Multiple Criteria Decision Making (MCDM) techniques are applied to find a balanced strategy to maximize the enhanced video service time and minimize the payment and the energy consumption. In the multi-participants case, through DBSCAN clustering, the problem with multi-participants is divided into several problems with single participant. Finally, extensive experimental evaluations are conducted to demonstrate the effectiveness and efficiency of our proposed method.

IMPACT OF THE VAT REVERSE-CHARGE MECHANISM ON THE CASH FLOWS OF CONSTRUCTION COMPANIES IN THE SLOVAK REPUBLIC

In 2015, the Slovak Parliament adopted the Law on Amendments to the Law on Value-Added Tax. This law came into force on January 1, 2016. One of the most significant changes was the introduction of a reverse-charge for the provision of construction works. A government statement of its positive influence on the business environment is inconsistent with the two-year experience in the building sector. The main goal of this paper is to establish the reason for the practical effects of the value-added tax reverse-charge mechanism on the construction companies. The hypothesis is that the negative effect on the cash flows of the construction companies increases ‘opportunity costs’ connected to excessive deductions. The paper focuses on evaluating and quantifying such an effect. It presents a comparison of the conditions before and after the adoption of the Act. No. 222/2004 Coll., as amended in 2016 and includes factors that influence costs and cash flows of construction companies. It but does not consider factors related to turnover and the economic situation. The reverse-charge mechanism affects the total of tax owing, the total deductible tax, the total excessive deduction, and the construction companies’ cash flows. In this study, the data from the information system of the Slovak Republic, under the condition of anonymity, are analyzed for the period 2014–2017. The effect of the value-added tax is quantified by way of financial interest expenses. These expenses depend on time limits for the excessive deduction, total of tax owing, and on the excessive deduction amount. Indicators of ‘Financial Burden 1’ and ‘Financial Burden 2’ are calculated. The results show that the Law on Amendments of Value Added Tax has significantly affected the constructions companies since January 2016. The reverse-charge system has not changed the delay in excessive deduction payments to the taxpayer’s bank account. It has changed the amount of excessive deduction expressed through money and the total tax owing. Based on the study results, this change markedly affects the financial burden of construction companies and provides an ‘opportunity cost’ Value Added Tax payers‘ construction company.

THE IMPACT OF VALUE ADDED TAX ON CASH FLOWS OF ROAD TRAFFIC COMPANIES IN THE SLOVAK REPUBLIC

Within the Member States of the European Union, value added tax (VAT) is the most harmonized form of tax from all types of direct and indirect taxes. It does not affect the costs or the revenues of the company, but it affects taxpayers on the other hand. The impact on the company's cash flows is most significantly affected. The basic principle of VAT taxation consists of the following idea. The Member State of final consumption of the goods or services is the state to whom the VAT finally belongs to. The free movement of goods and services between the Member States resulted in many new traffic companies being created. The measure of VAT influence on Cash Flows depends mainly on two impact factors. The first is the length of excessive deduction payment period to taxpayer bank account. The second impact factor is the amount of excessive deduction expressed through money. The objective of this study is an evaluation and quantification of the impact of value added tax on the road traffic companies’ cash flows. The financial burden of traffic companies had an upward trend only during the first and second year of the analyzed period. Since 2006, the financial burden had a downward trend. This decrease was more significant until 2009 (the end of the financial crisis in European countries). After this year, the declining rate had moderated. This development results not only from declining interest rates of the European Central Bank but also from economic growth and development in European countries.

Study on Interest Game and Allocation Mechanism in Allocation of China’s Environmental Management Right

China’s environmental protection issue is increasingly highlighted with its rapid economic development. Related theories and practices demonstrate that both market and government failures exist in the environmental governance issue. At present, the core issue for China’s environmental governance is the allocation of environmental management right between governments, non-governmental organizations, enterprises, and communities. The local governments function as the link among them. It is very important to study the Central Government’s mechanism design in the allocation of environmental management right and the local governments’ behavior choice. This paper analyzes the principal-agent relation between both the Central Government and local governments, and studies their selections respectively in symmetric and asymmetric information conditions. By analyzing, it holds that in the case of satisfying a certain constraint conditions, the Central Government can ensure that local governments can comply with more strictly the environmental regulation mechanism by giving them an excessive payment, whereas the local governments should truthfully select an optimal effort level.

Recovery of Excess Payments from Government Employees

Many instances of excess payments made to Government Employees and recovery of such payments have come up for consideration. While the employees cannot claim any right to such excess payments the right of the employer to recover has been eclipsed on grounds of equitable relief to mitigate the hardship arising out of such recoveries.

Firm‐Driven Management of Longevity Risk: Analysis of Lump‐Sum Forward Payments in Japanese Nursing Homes

This study analyzes a unique economic circumstance of longevity risk management in the Japanese private nursing home market. This circumstance takes the form of a lump‐sum forward payment of lifetime rent by residents, which leaves most longevity risk to be covered by homes. To analyze this circumstance, I construct a structural econometric model of industrial organization for this market. For the underlying structure of longevity risk, I assume that both individual consumers and nursing homes utilize the subjective evaluation. My empirical analysis detects excess payments that can be compensated for only by an unrealistically long stay in nursing homes. This finding implies the existence of the exaggerated evaluation of longevity by economic agents. Thus, appropriate government intervention to help hedge longevity risk might improve social welfare.

Using goal linear programming to manage natural gas take-or-pay contract clauses in electricity generation

In this paper, we focused on natural gas suppliers' contracts, in which clauses (provisions) on minimum quantities of outputs are imposed over some period of time (e.g., a year, a day, or an hour). We developed two mathematical models to manage the portfolio of take-or-pay contracts. The first model deals with all of the constraints related to the existing inhomogeneous clauses, and it is used to avoid undesirable penalty payments on some contracts and excess payments on others. The second model extends the first model to support power plants in meeting electricity demands, while taking gas from the point of delivery and fulfilling the contract's specifications.