History Of Taxation Research Articles

A Historical Review and Prospective Modern-Day Assessment of the Non-Itemizer Charitable Contribution Deduction

ABSTRACT The direct charitable contribution deduction was an experimental deduction for the 1982–1986 tax years. It represents the only example in the tax laws in which non-itemizers were allowed a charitable contribution deduction in tandem with the standard deduction. This article offers a review of three distinct eras in tax history: the advent of the standard deduction, the enactment of the direct charitable contribution deduction, and its subsequent abandonment. This article clarifies the literature to demonstrate that the direct charitable contribution's demise was not a matter of course. The deduction was made permanent by the House of Representatives. Its extension was the subject of rigorous debate in the Senate and was tabled by only a few votes. This article also considers the prospect of a modern-day direct charitable contribution. Taken on balance, concerns of economic necessity, fiscal viability, and measurable impact on the charitable sector suggest that reinstatement is neither necessary nor a prudent tax subsidy. Modern-day data indicate that non-itemizers are already giving. The tax incentive, therefore, proffered through the non-itemizer charitable contribution deduction would likely have relatively minimal effect on the charitable sector.

Structural Tax Reform: What Should Be Brought to the Table?

This article canvasses what features of our current tax system should be brought to the table for consideration in the development of policies directed to structural tax reform. It does so against a background of political infection of the tax system over the last five years; the historical and current tax mix; the influence of global competitiveness on the corporate tax system; the confined income tax base for individuals including the current bias in favour of capital gains; and the base limitations of the GST vis-a-vis geographically close comparable jurisdictions. While the author puts forward his own views, he acknowledges the need for comprehensive discussion and understanding with a view to achieving some semblance of consensus. The author’s conclusion is that the reform required must implement a broader base upon which our income tax can operate and so facilitate a reduction in marginal rates to provide an equitable foundation to broaden the base of the GST.

Brief of Interested Law Professors in Direct Marketing Association v. Brohl (10th Circuit)

This case, Direct Marketing Association v. Brohl, was recently remanded by the U.S. Supreme Court to the Tenth Circuit Court of Appeals. The Tenth Circuit then requested a full supplemental briefing; amici law professors submitted this brief. Like all states with a sales tax, Colorado faced – and faces – a voluntary compliance problem with the collection of its use tax. The use tax is a complement to the sales tax; in-state vendors collect and remit the sales tax, while in-state consumers are responsible for remitting the use tax on purchases made from out-of-state vendors that do not collect the sales tax. To this compliance challenge, Colorado turned to a third-party reporting solution. In broad strokes, the Colorado Statute imposes a modest requirement on one party to a taxable transaction – specifically on relatively large retailers who do not collect the use tax - to report information on their Colorado sales both to the consumer/taxpayer and to the taxing authorities. Amici make three specific arguments. First, amici demonstrate that third-party reporting of tax information is a ubiquitous and longstanding feature of modern tax systems. When tax authorities rely on taxpayers to self-report their taxable activities, compliance rates for the collection of any tax is low. Therefore, from the broader perspective of tax collection theory and history, including the history of very similar transaction-based taxes that attempt to tax consumption, the Colorado Statute is an unexceptional response to an otherwise intractable problem. Second, amici argue that the Supreme Court’s decision in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), does not apply to the statute at issue in this case. Quill imposed a bright-line physical presence test as a precondition for a state to impose a use tax collection obligation on a retailer. Because of its own self-limiting language and logic, not to mention greatly changed circumstances, the rule of Quill should not be extended into a new area. Third, amici argue that, because sales and use taxes constitute a unified system, there is no discrimination simply because differently situated retailers are required to aid in the collection of what is essentially a single tax in different ways.

States of obligation: taxes and citizenship in the Russian Empire and early Soviet Republic

Introduction. A Short History of Taxes: Russia and the World from the Eighteenth to the Twenty-First Centuries Part 1. People, Places, Things: The Old Regime, Economic Knowledge, and the Coming of the New Order 1. The Fiscal Instruments of Regime Change from the Eighteenth to the Nineteenth Centuries 2 Three Tax Reforms, Three Visions of the Polity Part 2. The Politics of Visibility, the Technologies of Intimacy: Taxes and the Remaking of Urban and Commercial Russia 3. Wealth in Motion: New Money, New Taxes, and a New Bureaucracy 4. Systematic Intimacy: Business Taxes and the Disciplining of Commercial Russia 5. Mass Taxation in the Age of the Individual: The New Personal Taxation in Russia and the World 6. The Income Tax as Modern Government: Assessment, Self-Assessment, and Mutual Surveillance Part 3. The Politics of Obscurity: Peasant Taxes, Excises, and the Vodka Monopoly to 1917 7. Everyone and No One: Indirect Taxes and the Vodka Monopoly to 1917 8. The Peasant and the Fisc: The State Budget and the Persistence of Collective Tax Apportionment 9. The Local Practices of Peasant Taxation Part 4. The State and Revolution, the State and Evolution: Fiscal Practices and a New Regime, 1917-30 10. Soviet Russia and the Continuing History of the Russian State 11. The Meanings of Utopia: Taxes, Urban Unities, and the Several Assaults on Peasant Separateness, 1917-21 12. The Economy of Licences: Taxes and the New Economic Policy Afterword. Russia, Socialism, and the Modern State

The Rise of Fiscal States: A Global History 1500–1914 ed. by Bartolomé Yun-Casalilla et al.

Reviewed by: The Rise of Fiscal States: A Global History 1500–1914 ed. by Bartolomé Yun-Casalilla et al. Wenkai He The Rise of Fiscal States: A Global History 1500–1914. Edited by bartolomé yun-casalilla and patrick k. o’brien, with francisco comín comín. Cambridge: Cambridge University Press, 2012. 471 pp. 41 figs. 45 tabs. $119.99 (cloth). The transition from the domain state (or demesne state), which drew income primarily from crown-owned property, such as estates and mines, to the fiscal or tax state, which rested upon tax revenue, has been widely considered a vital political and economic change in early modern Europe. But is the rise of the fiscal state a phenomenon unique to Europe? Did the institutions of fiscal states contribute not only to the ascendance of Western Europe, but also to the great divergence in economic development between Western Europe and the rest of the world in the nineteenth century? The Rise of Fiscal States: A Global History, edited by Bartolomé Yun-Casalilla and Patrick K. O’Brien with Francisco Comín Comín, represents an important effort to grapple with these questions by bringing together studies on the history of taxation in both European and non-European parts of the world primarily from the sixteenth to the early twentieth centuries. Part 1 of this book consists of chapters on fiscal development in the Netherlands, Belgium, France, and Britain. Part 2 focuses on the German state system, the Habsburg Empire, and the Russian Empire. Part 3 includes studies on Spain; Portugal; the republics, city-states, and Papal States in Italy; and the Ottoman Empire. Part IV is made up of chapters on China, Japan, and Mughal and British India. These empirically informative studies on particular fiscal developments in different parts of the world not only illustrate some common patterns, but also suggest certain research directions for future studies in comparative fiscal history. The connection between war and the development of fiscal states remains close across Eurasia even though the transition to fiscal states may occur at different times. The two chapters on China, for example, point out that war-fighting was vital to the emergence of a fiscal state in [End Page 650] China in the Song dynasty (960 c.e.–1279 c.e.), much earlier than the establishment of fiscal states in Western Europe. Contributors to this book also demonstrate that fiscal and financial innovations on the part of the state are closely related to the commercialization of the economy. As illustrated by the case-studies of the Netherlands (by Mantje Fritschy, Marjolein’t Hart, and Edwin Horlings), France (by Richard Bonney), and Britain (by Martin Daunton), the development of a market economy is a crucially important context against which we should investigate issues such as the change from taxation in kind to taxation in cash; the increasing percentage of indirect taxation extracted from mass consumption; and the financial methods that the state employed to obtain long-term loans from the financial markets. The causal relationship between economic growth and the rise of fiscal states is therefore not unidirectional, and more attention could be paid to the complex interactions between the economy and a given fiscal state. Contributors to this book at times use the term “fiscal state” to describe quite different methods or institutions by means of which the state collected taxes and borrowed money, such as direct collection by officials, tax-farming, and short-term versus long-term credits. As these financial techniques were employed in different political systems, one wonders how the history of fiscal states might be different from a fiscal history of non-state political units, such as empire. If we consider that the legitimation of coercive force is a vital component in state formation but not necessarily in territorial empires, the political aspects of fiscal states may be as important as the technical methods of collecting taxes. In fact, the chapters on the fiscal history of the Netherlands, Belgium, France, and Britain all address the political conflicts that arose in collecting income or property taxes, and how states attempted to legitimate the heavy burden of taxation to the people. The chapter by R. Bin Wong...

“An Analysis of Corporate Sponsorship of Tax-Exempt Organizations and the Unrelated Business Income Tax”

“An Analysis of Corporate Sponsorship of Tax-Exempt Organizations and the Unrelated Business Income Tax” Brian K. Leonard Abstract Throughout the history of the unrelated business income tax (“UBIT”), corporate sponsorship of exempt organizations has been a controversial issue. This is because of the competing interests of corporate responsibility and citizenship and tax policy implications. Thus, this paper will examine this area of law and taxation and discuss how Congress, the courts, and the IRS have struggled to strike the right balance in between establishing consistent and appropriate tax regulations and the encouragement of funding for tax-exempt organizations. This paper will examine the history of corporate sponsorships and the UBIT, including the laws, cases, and regulations that have been promulgated in this area. In addition this paper will highlight the reality that due to the importance of these sponsorships to exempt organizations, and the resulting political sentiment surrounding them, it is unlikely that they will ever be completely subject to the UBIT, and as a result the debate over the taxation of these activities will continue for the foreseeable future. Full Text: PDF DOI: 10.15640/ijat.v3n1a1

Without Representation, No Taxation: Free Blacks, Taxes, and Tax Exemptions Between the Revolutionary and Civil Wars

This Essay is the first general survey of the taxation of free Blacks in free and slave states between the Revolutionary and Civil Wars. A few states treated all equally for tax purposes, but most states enacted taxation systems that subjected free Blacks to different requirements. Both free and slave states viewed free Blacks as an undesirable population, and this Essay posits that—within the relevant political constraints—states used taxes and tax exemptions to dissuade free Black immigration and limit the opportunities for free Blacks within their borders. This topic is salient for at least two reasons. First, the Essay sheds light on laws and events that the literature—and the American educational system—has largely ignored. It directly contradicts the commonly held belief that free Blacks largely enjoyed the same set of rights and privileges as their White counterparts until Jim Crow and the Black Codes set in after the Civil War. Second, by juxtaposing then-widely prevailing views with historical tax laws, this Essay underscores the inherent relationship between tax policy and social policy. Taxes have never been just about bolstering the public fisc. Although this Essay will hopefully never have direct applicability to contemporary events, it can provide insight into current and future tax policies and the extent to which history, prejudice, and economic concerns inform policymakers’ decisions.

RISKY BUSINESS: THE PROSOPOGRAPHY OF CORPORATE TAX PLANNING

We trace the history of corporate tax planning from a compliance-focused activity to a profit-enhancing endeavor to a risk management center. Tax directors of U.S. multinational corporations face unprecedented global pressures from taxing jurisdictions seeking to increase their share of the enterprise's worldwide taxes. Increasingly, corporations must consider the risks that a tax strategy will impose on them, not only in terms of potential lost revenue, but also in terms of reputation and market share. We discuss the components of tax risk management in today's global environment and speculate how future corporate tax planning will change in light of the Organisation for Economic Co-operation and Development Base Erosion and Profit Shifting project.

Application of Flow Methods for Material and Financial Resources Management to Forecast Oil Production in Russia

The paper considers the impact of flow methods on long-term development of oil extracting industry, the impactbeing associated with mineral resources production tax variation. Six oil production scenarios for Russia havebeen considered, comparative analysis of these scenarios is presented. By the end of the calculation period, thescenario that provides for 5% decrease of tax burden closely approximates the scenario of oil production undereffective taxation system In terms of budget receipts volumes. The scenario with mineral resources productiontax rate increase is the worst in terms of oil industry growth leading to the industry collapse. According to thisscenario, an operating company’s tax burden increases to 78%. So far, the world practice has not witnessedeconomic growth under conditions of taxes as high as this; furthermore, taxation history testifies that too hightaxes have not been paid. In terms of oil industry growth, the scenario that provides for 5% decrease of taxburden is the most credible and promising, provided the released flows are invested in production. The samelevel of tax burden decrease (5%) is required to attain oil production levels in Russia in 2018-2020s according tothe 2030 Development Strategy.

Amendments to the VAT systems of EU Member States on 1 January 2015

In this article, the editors give an overview of the history of taxation of TBE services in the European Union and of the state of affairs, at the beginning of November 2014, of the transposition process of the rules that must enter into force on 1 January 2015 in the individual Member States.

Essay on the Prehistory of Taxes and Taxation (Invitation to a Discussion)

The author proposes to view the history of taxation existed before the rise of state formation. Concluded that property in one form or another is immanent in the whole of human history. The author believes that the history of taxes and taxation to be significantly older than the history of the state itself. Such payments as taxes had appeared at pre-state epoch already. Availability of property objectively generates relations on its redistribution in the form of change of material resources from personal to collective ownership. Some forms of such redistribution relations in the prestate era created prerequisites for the emergence of taxes and taxation. In this case, taxation is defined as alienation of labor or property which belongs to individuals by the public authorities for its own benefit with the purpose of its further redistribution.

The Dutch East India Company's Tax Farming in 18th Century Malacca

This study concerns eighteenth century Dutch East India Company (VOC) tax farming practices in the Southeast Asian port town of Malacca. Empirical data from VOC archives are used to determine the value of VOC’s tax farming. Adopting a qualitative methodology, and drawing on perspectives from Adam Smith’s tax maxims, the study focuses on determining the impact of the VOC’s tax farming practices on Malacca’s taxpayers, whether they were inter-continental or local intra-island traders, townspeople, or Malay farmers. The study facilitates a further understanding of the global phenomenon of tax farming practice and its demise. Findings suggest that the impact of the VOC’s Malacca tax farming varied across groups of taxpayers, but more negatively affected minority and local Malay groups, demonstrating why Adam Smith’s governance maxims still guide government tax policy in many countries today. The study complements the paper published from the 2012 Tax History Conference in Cambridge, which covered the nineteenth century handover of Malacca by the Dutch to the British.

Embedding Big Business. The Political Economy of the 1938 Corporate Tax Reform in Sweden

This article examines the business–government relations during the policy and decision-making processes that preceded the 1938 corporate tax reform in Sweden. This reform involved creating a new tax system under the turbulent economic conditions of the interwar period. But while literature on tax history has found that such circumstances often disable actors from agreeing on tax policies, a constructive outcome was still reached in the Swedish case. In this regard, it is demonstrated that one crucial factor behind the creation of the 1938 corporate tax reform was the formation of a coalition between the Social Democratic party and the business peak associations around a number of areas where their taxation interests coincided. Here, the Social Democrats agreed to shelter profits from corporations as long as they were managed according to the intentions of their countercyclical economic policy that encouraged industrial investments and employment expansion.

Research Methods in Taxation History

This paper is an attempt to consider the research methods used in taxation history, which is an area that has attracted increased academic interest in recent years. The paper looks at the various routes that may provide an entry into studying taxation generally and at the inherently interdisciplinary/multidisciplinary nature of the subject. If taxation is researched through disciplinary lenses, the focus of research changes, which brings to the forefront questions about the most appropriate research methods to use – questions which become more complex when taxation history is considered, along with fact that the disciplines have their own histories which may themselves impact on taxation history research. The paper looks in detail at social science research methods, also legal research (as different from other social science disciplines to which taxation is linked), as well as history and legal history, to evaluate research methods used in those areas. It shows that tax history can be researched in several ways from perspectives, which show an underlying rigour and more similarity than is at first apparent.

The Relative Cost of Internal vs. External Equity in South Africa: The Impact of Capital Gains and Dividend Taxes

In order to investigate the impact of South Africa’s unique historical secondary tax on companies (STC) on optimal capital structure, we adapt the US methodology developed by Lewellen and Lewellen (2006) to cater for STC. Using our derived STC-models, we examine the combined effect of South Africa’s capital gains tax and, respectively, its historical and current dividend tax regimes, on the relative costs of internal and external equity, and thus the theoretical optimal South African capital structure both historically and currently. We examine the expected position of each of these areas in light of South Africa’s transition from STC to the new shareholder dividend tax (SDT) regime that replaced it on 1 April 2012. We conclude that there is a net tax benefit to utilising internal equity under certain conditions and that firm financing and payout decisions that ignore this benefit are fundamentally incomplete.

Firm Valuation and the Uncertainty of Future Tax Avoidance

The paper studies the effect of uncertainty in firm-specific tax avoidance on firm value. We first show in a clean surplus valuation model that expectations about future profitability interact with corporate tax avoidance. Two dimensions of corporate tax avoidance strategies matter for valuation: uncertainty and level of expected future tax rates. We confirm the importance of level and uncertainty of tax avoidance for forecasts of future tax rates using a small sample of analyst tax rate forecasts. Consistent with the model and the implications from analyst forecasts, we derive a tax signal-to-noise ratio based on historical tax information. In our sample of 2,820 firms, we show empirically that this tax signal-to-noise ratio amplifies the effect of pre-tax earnings on firm value. Pre-tax earnings have a stronger effect on firm value for firms with effective and persistent tax avoidance. Firms with volatile effective tax rates receive a discount on their earnings.

Data Resource Profile: 1991 Canadian Census Cohort

The 1991 Canadian Census Cohort is the largest population-based cohort in Canada (N=2,734,835). Prior to the creation of this Cohort, no national population-based Canadian cohort was available to examine mortality by socioeconomic indicators. The 1991 Canadian Census Cohort was created via the linkage of a sub-sample of respondents from the mandatory 1991 Canadian Census long-form to historical tax summary files, Canadian Mortality Database, Canadian Cancer Database, 1991 Health and Activity Limitation Survey and a sub-sample of the Longitudinal Worker File. Overall ascertainment of mortality and cancer is anticipated to be nearly complete and the Cohort is broadly representative of most groups in the Canadian population. The Cohort has been used to examine mortality outcomes by different indicators of socioeconomic status, occupational categories, ethnic groups, educational attainment, and for exposure to ambient air pollution. Results have shown that the estimated remaining years of life at age 25 differed substantially by income adequacy quintile, educational attainment, housing type and Aboriginal ancestry.

Tax rate to maximize the revenue: Laffer curve for the Czech Republic

The aim of this article is to model the relationship between the rate of personal income tax and the revenue it generates, and to derive a tax rate that would maximize this revenue within the Czech Republic, using methodologies described in earlier works (Hsing, 1996). This tax rate represents an upper limit. Overstepping it has negative consequences for corporate finances and government budgetary funding alike, because it undermines the workers’ motivation to work, reduces buying power, and shifts work activities in favor of gray economy. The period of interest is a time series from 1993 to 2010. Two models were devised. The basic research instrument was a second-degree polynomial regression with a logarithmic transformation of the input data. The explaining variable was the tax revenue, the explanatory variable in Model 1 was the ratio of tax revenue to personal gross annual income. Model 2 featured the ratio of tax revenue to gross domestic product. To limit model instability, all data was stated per capita, in 2010 prices. Both models are statistically significant. By comparison, it was determined that, in the period of 1994–2010, the historical tax rate was lower than the rate designed to maximize the revenue. It approached the theoretical optimum most closely in 2007, and deviated from it most severely in 1995.

Taxation and Society in Twentieth-Century Argentina

Taxation and Society in Twentieth-Century Argentina

A Place at the Table: Bush v. Gore Through the Lens of Race

Although African Americans cast a majority of ballots rejected by counting machines following the 2000 presidential election in Florida, legal academic commentators have not grappled with the significance of race in their discussions of Bush v. Gore. This Essay uses race to expose structural shortcomings of merit-based assumptions about democracy embedded in the U.S. Supreme Court's majority per curiam. The Court prohibited a manual count of imperfectly marked ballots, effectively conditioning membership in political community on individual capacity to produce a machine-readable ballot. Despite the Court's individualized focus, however, merit-based assumptions about democracy interfere primarily not with individual rights, but with the ability of groups of voters like African Americans to identify with one another as a political community, to create alliances with others of different backgrounds, and to use the vote to enact political change. Further, merit-based criteria convey an expressive harm of exclusion that carries particular potency in light of a history of poll taxes, literacy tests, and other devices used to suppress political participation. While the merit-based vision's adverse impact on African Americans should prompt concern in and of itself, the shortcomings of the vision adversely impact many other Americans.