Tax Discrimination Research Articles

МЕХАНІЗМ ОПОДАТКУВАННЯ В СИСТЕМІ ДЕРЖАВНОЇ ПІДТРИМКИ СІЛЬСЬКОГОСПОДАРСЬКИХ ТОВАРОВИРОБНИКІВ

Reforming the tax mechanism in agriculture should include not only the optimal size of the tax burden, but also responsible for the structure of payments and fiscal instruments applicable level of economic development of Ukraine in general and agriculture in particular. In the light of current integration processes in reforming the national system of taxation should be based on the fact that one of the basic principles of the WTO is no tax discrimination. This includes ensuring that national tax regime, in which imported goods granted the same tax conditions as domestic products. The article further scientific substantiation of directions of the national system of state support for agricultural producers, in particular through the mechanism of taxation.The reform of state aid involves creating comfortable conditions for small farms and stimulate production of products with added value. The main principles of state support should be targeted and transparency.

Between Assembly and Crown

This article explores the issue of discriminatory taxation against colonial Jamaican Jews and the trans-Atlantic Jewish lobby. Based on colonial correspondences, this article makes two main arguments. First, Collective Jewish taxation was debated in colonial correspondences to a far greater extent than its actual financial significance, as it became an issue symbolic of the growing rift between the Jamaican Assembly and the Board of Trade/Crown. Second, while Caribbean Jewish communities are usually understood as satellite dependencies on the Western Sephardic metropoles of Amsterdam or London, placing the Jewish tax in local Jamaican context reveals that colonial Jews deferred to Europe to intercede on their behalf by necessity rather than default. When local circumstances favored the Jews they attempted to lobby against it themselves.

Tax My Ride: Taxing Commuters in Our National Economy

States constitutionally impose individual income taxes on two bases: (1) Residency: a state of residence can tax its residents and domiciliaries and (2) Source: the state in which income is earned can tax the individual earner. At present, there is no articulated constitutional barrier to of individual income. That is, there is no requirement that the state and residence state collaborate to tax no more than 100% of an individual's income, and there is no requirement that only one state consider itself the source of a particular item of income. In the realm of corporate income taxation the Commerce Clause has been interpreted as requiring each state to tax only the income fairly apportioned to that state. This article argues that the commerce clause applies to check the discriminatory taxation of individual income as well. In addition, the article synthesizes the goals of the Privileges and Immunities Clause with those of the dormant Commerce Clause, and demonstrates that the Privileges and Immunities Clause does not occupy the field to the exclusion of the dormant Commerce Clause. In fact, even absent application of the dormant Commerce Clause, the article posits a separate, arguably more fundamental rationale to avoid double taxation: Both the Article IV and the 14th Amendment Privileges and Immunities Clauses share the animating constitutional principle of national unity and true national citizenship. Retaliatory and protectionist taxing regimes undermine the interest in national unity, and should fall under these clauses.

Self-protection, Psychological Externalities, and the Social Dynamics of Fear

We examine the social dynamics of crime by means of evolutionary game theory, and we model the choice of boundedly rational potential victims to privately self-protect against prospective offenders. Negative externalities from self-protection, as the socially transmitted fear of victimization, can influence the strategic choices of victims even with constant or declining crime rates, and this circumstance may lead to Pareto inefficient equilibria with excessive expenses for private protection. Providing higher levels of public security (or of appropriate social care) financed through discriminatory taxation of private defensive behaviors can prevent crime and reduce superfluous self-protection, thus driving the social dynamics toward a more efficient equilibrium. Public policy can therefore be effective in implementing the social optimum. This article extends previous work by Cressman, Morrison, and Wen by increasing the range of possible dynamics and the scope for public intervention. Consequently, in our model, public policy can deter crime and improve the welfare of victims by addressing the intangible aspects of crime, that is, the social dynamics of fear.

Tolerance in the United States: Does economic freedom transform racial, religious, political and sexual attitudes?

Tolerance is a distinguishing feature of Western culture. Still, it varies between and within countries, as well as over time, and irrespective of whether one values it for its own sake or for its beneficial consequences, it becomes important to identify its determinants. In this study, we investigate whether the character of economic policy plays a role, by looking at the effect of changes in economic freedom (i.e., lower government expenditures, lower and more general taxes and more modest regulation) on tolerance in one of the most market-oriented countries, the United States. In comparing U.S. states, we find that an increase in the willingness to let atheists, homosexuals and communists speak, keep books in libraries and teach college students is, overall, positively related to preceding increases in economic freedom, more specifically in the form of more general taxes. We suggest, as one explanation, that a discriminatory tax system, which is susceptible to the influence of special interests and which treats people differently, gives rise to feelings of tension and conflict. In contrast, the positive association for tolerance towards racists only applies to speech and books, not to teaching, which may indicate that when it comes to educating the young, (in)tolerant attitudes towards racists are more fixed.

Taxes, Investors, and Managers: Exploring the Taxation of Foreign Investors in U.S. REITs

ABSTRACTExploiting a 2004 reduction in a unique capital gains withholding tax for foreign investors in U.S. publicly traded REITs, this paper explores both the sensitivity of real estate investors to changes in their own taxes and the reaction of real estate managers to changes in their investors' taxes. We find that both foreign investors and REIT managers responded to the tax change. This is consistent with taxes both restricting the flow of foreign capital into U.S. REITs and affecting the management of their real estate properties. To our knowledge, this is the first paper documenting that U.S. managers change their U.S. operations in response to the tax positions of foreign investors. This work should spur further study of the interplay between real estate and income taxes, the role of taxes on foreign portfolio investment, and the role of taxes on real managerial decisions. It should also be informative to policymakers who recently relaxed the discriminatory tax treatment for foreign investors in U.S. real estate after considering the issue for many years.

Taxes and bank capital structure

This paper shows that a reduction in tax discrimination between debt and equity funding leads to better capitalized financial institutions. The paper exploits exogenous variation in the tax treatment of debt and equity created by the introduction of a tax shield for equity. The results demonstrate that a more equal treatment of debt and equity increases bank capital ratios, driven by an increase in common equity. The change also leads to a significant reduction in risk taking for ex-ante low capitalized banks. Overall, the findings suggest that tax shields could be a valuable and innovative policy tool for bank regulators.

Can the CCCTB alleviate tax discrimination against loss-making European multinational groups?

In March 2011, the European Commission submitted a proposal for a Council Directive on an optional common consolidated corporate tax base (CCCTB). If this proposed CCCTB system comes into force, taxes calculated under the currently existing system of separate accounting might be replaced by a system of group consolidation and formulary apportionment. Then, multinational groups (MNGs) would face the decision as to whether to opt for the CCCTB system. Prior research focuses mainly on the differences in economic behaviour under both systems in general. By contrast, we study the conditions under which one or the other tax system is preferable from the perspective of an MNG, with a particular focus on loss-offsets. We identify four effects that determine the decision of an MNG: the tax-utilization of losses, the allocation of the tax base, the dividend and intragroup interest taxation. We find mixed results, e.g., that the CCCTB system proves advantageous for increasing loss/profit streams (e.g. from start-ups or R&D projects) of the individual group entities, whereas the system of separate accounting is beneficial for decreasing profit/loss streams (e.g. caused by a decrease in return from a mature product). The results of our analysis are helpful for MNGs facing the decision as to whether to opt for the CCCTB system and can also support legislators and politicians in the EU but also in other regions in their tax reform discussions.

The Influences of the Tax System, Tax Rate, Tax Audit and Tax Discrimination on Tax Evasion by Body Taxpayer

Abstract: The objective of this research is to analyze the influence of the tax system, tax rate, tax audit and tax discrimination on tax evasion. This survey research is using the questionnaire as an instrument. The population in this research are all body taxpayers in the form of Incorporate Company or Commmanditaire Vennootschaap located in Yogyakarta Province. The research samples are selected using a random sampling method. Total of samples is 42 body taxpayers in Yogyakarta Province in the form of Incorporate Company and Commmanditaire Vennootschaap. The data is analyzed using multiple regression analysis with SPSS (Statistical Product and Service Solution) version 23. The result of hypothesis testing conclude that: (1) tax system variable has positive and significant effect toward tax evasion, (2) tax rate has negative and insignificant effect toward tax evasion, (3) tax audit has negative and insignificant effect to tax evasion and (4) tax discrimination has positive and significant effect to tax evasion. Abstrak : Tujuan dari penelitian ini adalah untuk menganalisis pengaruh sistem perpajakan, tarif pajak, pemeriksaan pajak, dan diskriminasi pajak terhadap penggelapan pajak. Penelitian ini menggunakan kuesioner sebagai instrumen. Populasi dalam penelitian ini adalah seluruh wajib pajak badan dalam bentuk Perseroan Terbatas (PT) atau Commmanditaire Vennootschaap (CV) yang berada di Provinsi Yogyakarta. Sampel penelitian dipilih dengan menggunakan metode random sampling. Total sampel dalam penelitian ini adalah sebanyak 42 wajib pajak badan di Provinsi Yogyakarta dalam bentuk Perseroan Terbatas (PT) dan Commmanditaire Vennootschaap (CV). Data dianalisis menggunakan analisis regresi berganda dengan software SPSS (Statistical Product and Service Solution) versi 23. Dari hasil pengujian hipotesis dapat disimpulkan bahwa: (1) variabel sistem perpajakan berpengaruh positif dan signifikan terhadap penggelapan pajak, (2) variabel tarif pajak berpengaruh negatif dan tidak signifikan terhadap penggelapan pajak, (3) variabel pemeriksaan pajak berpengaruh negatif dan tidak signifikan terhadap penggelapan pajak, dan (4) variabel diskriminasi pajak berpengaruh positif dan signifikan terhadap penggelapan pajak.

Tax Implications of Selling Electronic Books in the European Union

In recent years, the publishing industry has undergone significant change related to the emergence of information technology and communication, leading to the emergence of electronic books substitutes the traditional book. This new reality has an impact on the cultural industry and requires the adaptation of public regulations affecting the production and consumption of eBooks, avoiding situations of tax discrimination against these paper publications, which result in lower consumption thereof, as well as significant tax revenue losses. Since two substitute goods must have the same taxation not vary in response to the medium on which they are distributed.

Export Policies and the General Agreement on Trade in Services

Compared to its counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT) of 1947, the General Agreement on Trade in Services (GATS) contains a variety of conceptual innovations. In addition to cross-border supplies, the Agreement covers three additional types of transactions, i.e. supplies in a foreign country to consumers that have moved abroad as well as supplies provided by foreign-owned firms and foreign service professionals in a host market. At the same time, the GATS accommodates a range of measures, including the use of quantitative restrictions and discriminatory taxes and subsidies, which is clearly constrained under the GATT. Most notably in the current context, the Agreement offers particularly broad scope for various types of export-related interventions, regardless of ensuing market distortions. The social and economic relevance of such measures, not only in sectors such as education or health, but also in producer-oriented services, including transport, telecommunications or finance, is immediately evident. This article seeks to provide an overview and assessment in the light of relevant GATS provisions and WTO dispute rulings.

Export Policies and the General Agreement on Trade in Services

Compared to its counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT) of 1947, the General Agreement on Trade in Services (GATS) contains a variety of conceptual innovations. In addition to cross-border supplies, the Agreement covers three additional types of transactions, i.e. supplies in a foreign country to consumers that have moved abroad as well as supplies provided by foreign-owned firms and foreign service professionals in a host market. At the same time, the GATS accommodates a range of measures, including the use of quantitative restrictions and discriminatory taxes and subsidies, which is clearly constrained under the GATT. Most notably in the current context, the Agreement offers particularly broad scope for various types of export-related interventions, regardless of ensuing market distortions. The social and economic relevance of such measures, not only in sectors such as education or health, but also in producer-oriented services, including transport, telecommunications or finance, is immediately evident. This article seeks to provide an overview and assessment in the light of relevant GATS provisions and WTO dispute rulings.

Different VAT rates for digital and paperback publications in the EU, a breach of ‘fiscal neutrality’? A tentative answer and broader reflection on the coherence of the EU rules prohibiting indirect tax discrimination

Should we apply the same VAT rates to digital and paperback publications for the sake of fiscal neutrality? The debate has been raging on for some time but the question has not yet been analysed in detail, nor in the literature, nor even by the Court of Justice of the European Union in its recent decisions concerning the application by France and Luxembourg of reduced rates for e-books. This is the objective of this paper, and also the occasion to suggest a new perspective on the scope and objective of the case-law based VAT ‘principle of fiscal neutrality’.

Discriminatory tax treatment of CFC’s losses towards losses of partnerships, economic double taxation, exchange of tax information and future developments of the Norwegian CFC rules

Discriminatory tax treatment of CFC’s losses towards losses of partnerships, economic double taxation, exchange of tax information and future developments of the Norwegian CFC rules

Taxes and Bank Capital Strucucture

This paper shows that a reduction in tax discrimination between debt and equity funding leads to better capitalized financial institutions. In many countries, the cost of debt is tax-deductible while the remuneration for equity (dividends) is not deductible. Theoretically, this unequal treatment gives a bank - as any other firm - an incentive to take on more debt. This paper exploits exogenous variation in the tax treatment of debt and equity created by the introduction of a tax shield for equity in Belgium. This quasi-natural experiment demonstrates that a more equal treatment of debt and equity significantly increases bank capital ratios, driven by an increase in common equity. Additionally, the results illustrate that both high and low capitalized banks react to the change in tax legislation, but that the latter profit more in terms of overall risk reduction. Overall, the findings confirm that reducing the tax discrimination between debt and equity could be an innovative policy tool for bank regulators.

CORPORATE TAX CUTS AND FOREIGN DIRECT INVESTMENT

Accurate policy evaluation is central to optimal policymaking, but difficult to achieve. Most often, analysts have to work with observational data and cannot directly observe the counterfactual of a policy to assess its effect accurately. In this paper, we craft a quasi-experimental design and apply two relatively new methodsthe difference-in-differences estimation and the synthetic controls methodto the policy debate on whether corporate tax cuts increase foreign direct investment (FDI). The taxation-FDI relationship has attracted wide attention because of mixed findings. We exploit a quasi-experimental design for Russian regions, which were granted autonomy to reduce corporate profit tax in 2003, enabling them to simultaneously experiment with different tax policies. We estimate both the average and local treatment effects of two types of tax cuts on FDI inflows. We find that, on average, relative to the absence of tax cuts, nondiscriminatory tax cuts on direct investment profit increase FDI, but discriminatory tax cuts on selected government-sanctioned investment projects do not. Yet for both types of tax cuts, local treatment effects vary dramatically from region to region. Our research has important implications for the design of tax policy and fiscal incentive, and the assessment of fiscal policy reforms. (Less)

Tax discrimination against inter-firm networks

The purpose of this study is to investigate how local and central governments utilize inter-firm transaction network information for corporate tax discrimination. We assume a two-stage game with two asymmetric emerging regional markets and no prior investors. First, governments offer a different tax level to each firm. Next, firms embedded in a fixed transaction network choose a region in which to invest, prompted by the incentive of co-locating with their direct transaction partners. The game is played with incomplete information on the stand-alone payoffs of other firms. First, we find that when two competitive regional governments play the first stage to maximize their tax revenue, they both propose lower tax levels to firms with more direct partners. Second, when the central government plays the game to maximize social welfare, it offers a tax incentive to concentrate firms in the advantageous region. In addition, this tax incentive is greater for firms that have a higher Katz–Bonacich centrality. Furthermore, when a uniform tax is the only practical option for the central government, the level of the uniform tax depends on the average value and variance of the Katz–Bonacich centrality of the network.

Discriminatory Taxation in Light of Fortescue: Its Implications for the Development of Northern Australia

Discriminatory Taxation in Light of Fortescue: Its Implications for the Development of Northern Australia

Discriminatory Taxation in Light of Fortescue: Its Implications for the Development of Northern Australia

In the recent Fortescue decision, the High Court made some interesting observations regarding interpretation of the word ‘discrimination’ in the context of the Federal Government's power with respect to taxation in s 51(2) of the Australian Constitution. Coincidentally, the Federal Government has commenced consideration of options for the development of northern regions of Australia. Of course, one option would be to introduce a variable taxation system to encourage businesses and individuals to be based, and/or invest, in northern Australia. This article considers possible constitutional issues associated with variable taxation schemes overtly favouring businesses and individuals based in the ‘north’, given the recent High Court decision.

Discriminatory taxes are unpopular—Even when they are efficient and distributionally fair

We explore the political acceptance of taxation in commodity markets. Participants in our experiment earn incomes by trading and must collectively choose one of the two tax regimes to raise a given tax revenue. A “uniform tax” (UT) imposes the same tax rate on all markets and is fair in that it yields the same – but low – income to participants in all markets. The “discriminatory tax” (DT) imposes a higher burden on markets with inelastic demand and is therefore efficient but it is also unfair in that incomes are unequal across markets. We find that DT is unpopular, as predicted. Surprisingly, however, DT remains unpopular when they are both efficient and produce a fair (equal) distribution. We conclude that non-discrimination (equal treatment) is a salient fairness principle in taxation that shapes voting on commodity taxes above and beyond concerns for efficiency and equal distribution.