Local Tax System Research Articles

Case Study of Central and Local Government Finance in Japan

This paper aims to provide an overview of the basics of Japan’s local public administration and finance system and to analyze how Japan’s municipalities restore their fiscal balance after a fiscal shock. In Japan, local governments play a major role in redistribution. Combined with regional disparities in tax capacities and an inflexible local tax system, there is a large vertical fiscal gap in Japan between the central and local governments — a gap that necessitates the transfer of funds from central to local governments. Under this system, the fiscal adjustments in Japan’s municipalities occur mainly via changes in government investment, and they account for 63%–95% of adjustments in permanent unit innovations in grants and own-source revenue. In contrast to the role of expenditure, the municipalities’ own-source revenue plays a limited role in balancing the local budget. The results of this study also reveal that 40% of the increase in own-source revenue is offset by a reduction in grants. Furthermore, municipalities can induce grants by expanding government current expenditure. Finally, this study offers and discusses some policy implications.

On reforming direction the local tax system considering the changed conditions

On reforming direction the local tax system considering the changed conditions

Multiplying the origins of mass schooling: an analysis of the preconditions common to schooling and the school building process in Sweden, 1840–1900

The emergence of mass schooling is undoubtedly one of the most significant transformations that took place during the eighteenth and nineteenth centuries. This article takes a new approach to this fundamental issue by analysing the historical conditions required for the construction of school buildings and the advent of mass schooling, in the 1840–1900 period. Using the school building process as a point of departure, the growth of schooling is tied not only to well-known factors such as industrialisation, state formation processes and the decentralisation of school systems, but also to the expansion of the market economy, modernisation of the credit market, liberalisation of the real property market, changes in local tax systems, and the expansion of the building materials market. Thus, a broader and largely novel explanation of the emergence of mass schooling is accomplished.

GOALS AND REFORMS OF CURRENT JAPANESE LOCAL TAX SYSTEM

This paper examines the structure of Japanese local revenue and the characteristics of the Japanese local tax system. Further, it examines the goal of financial autonomy in the Japanese context. Local revenue is mainly composed of the general revenue resources in terms of quantity and quality. These revenue sources accounted for 55.2% of the total local revenue in fiscal year 2012. Moreover, they are not earmarked for specific purposes and are essential for local autonomy. The key elements of the general revenue resources are the local taxes, the local transfer tax, the special local grants, and the local allocation tax. Local tax is the principal local revenue and the core method for the financial autonomy. However, the local tax system currently faces various issues. I identify several issues with the local tax systemdisparity, sensitivity, overlap between national taxes and local taxesand discuss the need to enrich local autonomy. These are architectural issues that are closely related to the characteristics of the Japanese local tax system. Further, I examine the Japanese local tax reforms. The Japanese tax reform strategy involves two approachesan urgent approach and a long-term approach. It would be preferable for the citizens to distinguish between these approaches when considering the local tax reforms. Finally, I suggest three goals for the Japanese local tax system. The first is to reduce disparity. In a manner, this is the hottest issue at present. The national government enacted several very important reforms such as the foundation of the local corporate special tax in 2008. The second goal is to enrich autonomy. In order to achieve this, the Trinity Reform was implemented in Japan from 2004 to 2006. Moreover, the local governments will receive addition al tax reven ue inthe form of anin crease incon sumptiontax in2014. However, the issue of the gap between revenue and expenditure has become rather remarkable. The third goal is to stabilize the tax revenue, which is a significant agenda. In this context, the local governments have made much of the asset tax and the consumption tax. Moreover, the expan sionof local con sumptiontax in2014 could con tribute to stability. However, the taxes on corporate income (which amount to 3 trillion yen) are still principal local taxes and they are very elastic to economic situation. How to deal with those elastic local taxes and to procure more stability for the local tax system seems to be more crucial. And as the concept of social values is becoming complicated, the reform of local tax system will be complex. But whenwe con sider the future financial autonomy, the following point is significant. The local governments are required to be more and more sensitive to community needs in the framework of financial autonomy. And relationship between sensitivity

Outlines and Issues of the 2015 Tax Reform in Japan (Especially on Local Tax System).

Outlines and Issues of the 2015 Tax Reform in Japan (Especially on Local Tax System).

Local finance expansion plans through the local tax system reform

Local finance expansion plans through the local tax system reform

Theoretical concepts of property tax, an essential source of local government revenue in Europe

The article explores the problems of theoretical aspects of local tax system rationalisation. The deliberations conducted concern possibilities of referring recommendations made by the contemporary theoretical achievements describing economic effects of property taxation to the tax practice of certain European countries (for example Poland). The content of the article indicates that conclusions resulting from the theory of property taxation should support the operational transformations of the local tax system..Having analysed influential studies on property taxation the author expresses his opinion that despite essential differences, both approaches (benefit view and capital view) have a great value. It should be stated, however, that we have to do with the tax which is not a pure tax on benefit because the owners of property, while improving it, are charged with higher taxes, being thus discouraged from any investments. Simultaneously, benefits resulting from social and economic programmes conducted at the local level are reflected in the local property value. The article applies the method of analysis and literature criticism as well as the intuition method.

Taxation of Real Estate in Sweden from 1862 to 2010

This paper examines the development and role of the real estate taxation in Sweden during the period between 1862 and 2010. Real estate has historically been taxed at both the local and state levels in Sweden. The importance of real estate taxation in Sweden is nevertheless difficult to assess directly because of the limited availability of data and the specific construction of the local tax system after 1920. The real estate tax initially aimed to provide municipalities with a stable tax base; however, its importance in this respect has diminished over time. After the tax reform of 1990–1991 in Sweden, real estate was taxed exclusively at the national level, generating tax revenue of approximately one percent of GDP. Further, in 2008, part of the tax was transformed to a “local fee”.

(A Study on Japanese Fiscal Sustainability and Fiscal Discipline)

(A Study on Japanese Fiscal Sustainability and Fiscal Discipline)

Rebuilding Local Government Finance after Conflict: The Political Economy of Property Tax Reform in Post-Conflict Sierra Leone

This research explores relatively successful reforms of the local property tax system in the four largest city councils in Sierra Leone. Deriving lessons from differing outcomes across the four councils, it highlights three key messages about the determinants of successful reform. First, relatively modest and targeted support from the international community and the central government has been critical. However, the success of such initiatives must be grounded in a focus on longer-term, hands-on, local-level partnerships. Second, success is critically dependent on high-level reform leadership to overcome resistance, particularly from large property owners. In turn, the emergence of such political leadership appears to have been shaped by the relationship between political and economic elites, the relationship between local and central political parties, and the extent of local-level political competition. Finally, alongside the general importance of political leadership, reform strategies that are comparatively contractual can contribute to a virtuous cycle of improved governance, and help to build sustainable political support for continued reform.

Redistribution territoriale des perspectives de croissance des budgets locaux après la réforme de la fiscalité locale des entreprises

La réforme de la fiscalité locale des entreprises redistribue à grande échelle les perspectives de croissance des ressources et des budgets des collectivités territoriales. Le remplacement de l’investissement par la valeur ajoutée dans l’assiette fiscale des entreprises et la réaffectation des taxes sur les ménages déplacent le potentiel fiscal des territoires industriels vers les territoires de services et les territoires résidentiels. La réforme opère également une redistribution, inter et intra-catégorielle, du pouvoir fiscal. L’autonomie fiscale disparaît pour les régions, recule pour les départements et demeure stable pour le bloc communal mais avec une redistribution interne de grande ampleur.

A Study on Japanese Fiscal Sustainability and Fiscal Discipline

A Study on Japanese Fiscal Sustainability and Fiscal Discipline

American VAT – The Carousel Fraud Threat: Will the EU Show the US the 'Way Forward'

On Thursday, March 29, 2007 the European Commission, Directorate-General for Taxation and Customs Union, will host a one-day Conference on Fiscal Fraud – Tackling VAT Fraud: Possible Ways Forward. The conference is based on the Communication of May 31, 2006 explaining the need to develop a coordinated strategy to improve the fight against fiscal fraud. This paper indicates that the EU examination of carousel fraud points the way forward for advocates of a US VAT as well. About 40% of EU VAT fraud appears to be 'missing trader intra-community' (MTIC) or carousel fraud. The best estimates of EU losses to carousel fraud are put at 23 billion euros annually. UK studies put domestic losses from carousel fraud at 2.98 to 4.47 billion euros.Fraud concerns understandably resonate deeply among American advocates of a federal level VAT in the US. It needs to be taken into consideration that inserting a national credit-invoice VAT into the US fiscal fabric would be to set out the welcome mat for an American carousel fraud, as well as the more traditional VAT frauds. The vulnerability of a US VAT to carousel fraud is a direct result of the American tendency for national, state and local tax systems to 'piggy backing' on one another is taken into account.

The Distributional Effects of Recent Changes to Maine’s Tax System

Both classical economic theory and recent empirical research support the notion that taxes should be progressive: that the wealthiest citizens should pay a larger share of their income in taxes than the middle class, and the middle class should pay a larger share of their income in taxes than the poor. Like every other state in the U.S., Maine’s state and local tax system is not progressive, or even proportional with respect to income, but regressive. This article summarizes recent changes to income, sales, and property taxes that have made Maine’s state and local tax system more regressive.

Conceptual framework of forming local taxation system in industrial city

The article seeks to determine the conceptual framework of forming local taxation system in an industrial city. The special set of the main principles suitable for forming the local taxation system in an industrial city is given (principles of tax autonomy, localization, compliance, self-determination, earned income, certainty, and direction) with the proposed scientific and methodological method of identifying an industrial city among the others.

Intergovernmental Grant and Tax Collecting Efforts in Japan: Estimating the Effect of Local Allocation Tax Grants on Local Tax Collection Rates

As part of the Trinity Reform, the Japanese Ministry of Internal Affairs and Communications (MIC) established the Administrative Reform Incentive Assessment (ARIA) program under the local allocation tax (LAT) system during the fiscal year 2005. This program was aimed at motivating local governments with LAT grants to raise their tax collection rates (TCRs) since a number of economists had asserted that LAT grants were eroding the fiscal discipline of local governments. Our paper uses empirical methods to estimate the average treatment effect (ATE) of the program and finds that it does not provide such an incentive and that the TCRs of local governments are unchanged by the Trinity Reform, irrespective of whether these governments receive LAT grants. We also conclude that the TCRs do not support the argument that LAT grants diminish the tax collection incentives of local governments.

Sustainable Water Management, Labelling and Water-metering - Strategies Towards Conservation of Water in the UK

Water is a vital commodity for our health and wellbeing and for our life in general, for example drinking, cooking, cleaning, bathing, gardening, cooling, growing crops in agriculture, and product processing in industries. There are important social, economic and environmental impacts associated with water use [1]. Our health and environment are dependent on a sustainable use of water as well as an effective management of our polluted and waste water. Population growth and climate change are already posing an important pressure on our water resources all over the world, thereby increasing water demand and leading to more widespread water stresses, which in turn require a further increase in water abstraction and cause further water quality problems in many regions and countries. In an island country that has been blessed with regular rainfalls and even occasional floods, can UK really be short of water?! Well, the residents in the UK have experienced water hosepipe ban before in the late eighties and nineties, and almost every year there is a threat from the Environmental Agency that there is a chronic shortage of water in the reservoirs. How on earth do we manage so regularly to run short of water? Surely those running the water industry would have a strategic plan to put enough aside for a rainy day – or, rather, when the weather fails to rain! In the southeast of England, which is the most affluent and densely populated part of the UK, where majority of busy commercial companies, restaurants, hotels and industries operate; there is a high demand of water usage, but receives less rain than some parts of the Mediterranean and actually has less water per person than the largely desert countries of Syria and Sudan [2,3]. The water shortage problem is made worse due to the growing demand of housing development there, with 1.5 million more homes projected by 2026. There has been projection that permanent water rationing in the South East may have to be introduced by 2025. There is a prediction that, due to the increasing likelihood of hot, dry summers, that by 2080, rainfall in southern and eastern England may fall by half [4]. Against this background, there is an urgent need to save water and the huge amount of water leakage in the out-of-date water supply system throughout the UK should be an important consideration for the water companies. In London alone, 60% of potable water is leaked to waste and more than 3 billion litres of water in England and Wales never supplied to people’s homes. The UK, particularly in the North is known for the rainy weather and water supply in the UK was previously not a problem and households used to pay for their water usage and sewage treatment included in the local tax system against their properties. This was changed after privatisation of the water companies and water charging is now one of the rateable utility bills the UK citizen has to pay and again this is a set rate based on the rateable value (RV) of the home for the residents of England and Wales. There is an option to install water meter in your own home at a cost of the owner and the water charge would be based on the units of water consumed as indicated by the meter

The Growth and Stability of the Local Tax Revenue in Japan

This paper estimates the elasticity of the local tax revenue in Japan and analyzes the growth and stability of the Japanese local tax system. The main estimated results are as follows. The growth taxes in the long run are the Individual Enterprise Tax and the Fixed Asset Tax. There are no stable taxes in the short run. The total amount of prefectural tax revenue is low growth in the long run and unstable in the short run. The total amount of municipal tax revenue is low growth in the long run and neutral in the short run. The total amount of the local tax revenue in the prefecture and the municipality does not have stability and growth.

Multilingual literacy at the Lusignan court: the Cypriot royal chancery and its Byzantine heritage

An important aspect of the social and administrative transformations resulting from the establishment of Western feudal lordships and colonial regimes in Byzantium and the Eastern Mediterranean was the emergence of a multilingual literacy in the contact zones between foreign elites and the native population. This article examines these phenomena with respect to the royal chancery of the Lusignan kingdom of Cyprus from the late twelfth until the beginning of the fourteenth century. It is argued that the Frankish ruling class of the island opted for a parallel use of Latin and Byzantine chancery practices without fusing them into hybrid mixtures. The Lusignan lords adopted Byzantine titles, symbols of authority and modes of expression for legal transactions with Greek subjects and the local tax system. Another area in which the heritage of the imperial chancery helped express new forms of hegemonial self-representation was the kingdom’s diplomatic relations with non-Frankish rulers.

Tax mimicking among local governments: some evidence from Spanish municipalities

The aim of this paper is to study the spatial patterns in the Spanish local tax system. The three most relevant taxes are analyzed: the property tax, the motor vehicle tax and the building activities tax, which jointly represent 80% of the tax revenue at local level in Spain. Using spatial econometrics procedures, three alternative weight specifications to define competitors are explored: contiguity, distance and a combination of economic and geographical characteristics. After carrying out an exploratory spatial analysis, the results of the estimation of spatial lag and spatial error models confirm positive spatial-autocorrelation for the property tax and the building activities tax, with an order of magnitude between 0.3 and 0.5. On the contrary, the motor vehicle tax does not exhibit a significant spatial pattern.