Interaction Of Tax Research Articles

Tax Interaction Dynamics Among Belgian Municipalities 1984-1997

The purpose of this paper is to test econometrically the existence of fiscal interactions between Belgian municipalities. At the time of writing, the motivation was to provide scientific support to the lively debate on fiscal competition that took place among Belgian politicians in the late nineties. Two types of taxes are considered, for which Belgian municipalities have the decision power as to rates: the centimes additionnels on the personal income tax and the precompte immobilier which is a property tax. A dynamic adjustment model is specified and estimated using panel data for 598 municipalities over 15 years. The empirical results obtained bear upon two main points: (i) Some interaction definitely has prevailed between the municipalities' fiscal choices made during the observation period, for both taxes; (ii) However, the adjustment reactions to the other municipalities' fiscal choices have occurred over time at the very low yearly pace of 6% and 10%, respectively, of the discrepancy between the actual rates and the preferred rates.

Book-Tax Conformity and the Information Content of Earnings

We examine whether the information content of earnings is inversely related to the degree of conformity between financial accounting income and taxable income. Our inquiry exploits a natural experiment first examined by Guenther et al. (1997) in which a set of U.S. firms were forced to increase their book-tax conformity as a result of a change in the tax law. We find evidence consistent with the increase in book-tax conformity reducing the usefulness of financial accounting earnings. The information content of earnings as measured by the long-window earnings response coefficients and the R- squared from a regression of returns on earnings decreases for this set of firms after the tax law required greater book-tax conformity. We find that the declines are significantly larger than the changes in the same measures for an industry-matched sample of firms not required to increase conformity. These results add to the academic literature on the interaction of taxes and financial reporting as well as to the policy debate about whether the U.S. should conform the tax law to GAAP, a debate that has recently intensified. Hanlon acknowledges financial support from an Ernst & Young Faculty Fellowship. Maydew acknowledges financial assistance from the University of North Carolina Kenan- Flagler Business School. Shevlin acknowledges financial assistance from the Accounting Development Fund at the University of Washington. We thank Nader Hafzalla for research assistance and Scott Dyreng and Dave Guenther for comments on an earlier draft. We appreciate Dave Guenther and Sarah Nutter sharing the identification of the firms required to switch to accrual basis accounting for tax purposes.

SUV39H1 interacts with HTLV-1 Tax and abrogates Tax transactivation of HTLV-1 LTR

BackgroundTax is the oncoprotein of HTLV-1 which deregulates signal transduction pathways, transcription of genes and cell cycle regulation of host cells. Transacting function of Tax is mainly mediated by its protein-protein interactions with host cellular factors. As to Tax-mediated regulation of gene expression of HTLV-1 and cellular genes, Tax was shown to regulate histone acetylation through its physical interaction with histone acetylases and deacetylases. However, functional interaction of Tax with histone methyltransferases (HMTase) has not been studied. Here we examined the ability of Tax to interact with a histone methyltransferase SUV39H1 that methylates histone H3 lysine 9 (H3K9) and represses transcription of genes, and studied the functional effects of the interaction on HTLV-1 gene expression.ResultsTax was shown to interact with SUV39H1 in vitro, and the interaction is largely dependent on the C-terminal half of SUV39H1 containing the SET domain. Tax does not affect the methyltransferase activity of SUV39H1 but tethers SUV39H1 to a Tax containing complex in the nuclei. In reporter gene assays, co-expression of SUV39H1 represses Tax transactivation of HTLV-1 LTR promoter activity, which was dependent on the methyltransferase activity of SUV39H1. Furthermore, SUV39H1 expression is induced along with Tax in JPX9 cells. Chromatin immunoprecipitation (ChIP) analysis shows localization of SUV39H1 on the LTR after Tax induction, but not in the absence of Tax induction, in JPX9 transformants retaining HTLV-1-Luc plasmid. Immunoblotting shows higher levels of SUV39H1 expression in HTLV-1 transformed and latently infected cell lines.ConclusionOur study revealed for the first time the interaction between Tax and SUV39H1 and apparent tethering of SUV39H1 by Tax to the HTLV-1 LTR. It is speculated that Tax-mediated tethering of SUV39H1 to the LTR and induction of the repressive histone modification on the chromatin through H3 K9 methylation may be the basis for the dose-dependent repression of Tax transactivation of LTR by SUV39H1. Tax-induced SUV39H1 expression, Tax-SUV39H1 interaction and tethering to the LTR may provide a support for an idea that the above sequence of events may form a negative feedback loop that self-limits HTLV-1 viral gene expression in infected cells.

Le rôle des interactions dans les choix fiscaux des agglomérations françaises

The Role of Interactions in the Tax Choices of the French Cities The aim of this article is to explain the French agglomerations tax choices and more particularly the role of horizontal and vertical tax interactions in the choice of their local business tax. Initially, we build a model of local tax choice which takes into account both externalities. Then we estimate this model using the spatial econometrics techniques for the year 2004. We test the assumption that the rate of local business tax chosen by an agglomeration depends on those of the concurrent agglomerations, the departmental rate and the regional rate. We observe significant tax interactions between the French agglomerations. In addition, the local and departmental tax rates appear to be strategic complements. On the other hand, the regional rates do not seem to influence significandy the French agglomerations tax choices.

Protein-protein Interaction Between HTLV-1 Tax Protein and the Components of the Cellular Secretory Pathway

Tax protein has been shown to play an integral role in HTLV-1-induced diseases including adult T cell leukemia (ATL) and HTLV-1-associated myelopathy/tropical spastic paraparesis (HAM/TSP). Extracellular Tax has been detected in the cerebrospinal fluid of HAM/TSP patients, suggesting that cell-free Tax may be physiologically involved in the progression of neurologic disease. We have previously demonstrated the secretion of full-length Tax and its co-localization with the cytoplasmic organelles relevant to secretion. The present study elucidates the mechanism of Tax secretion. To identify Tax interacting proteins within cell, we have used an antibody array spotted with antibodies directed against cellular secretory pathway proteins. Upon reaction with protein extracts from Tax-treated cells, antibody array analyses have suggested the interaction of Tax with SCAMP1, SCAMP2, SNAP23, and COPII; proteins that facilitate transport between nucleus and cytoplasm, and between endoplasmic reticulum, Golgi complex, and plasma membrane. Subsequently, these specific protein-protein interactions have been confirmed by co-immunoprecipitation and GST pull-down assays. Collectively, these studies have demonstrated the interaction of Tax with multiple proteins in the secretory pathway and that Tax may be secreted and act as an extracellular effector molecule.

Social Security, Taxation, and Redistribution in Japan

The paper examines the social security tax and benefit system in Japan. We offer an analysis of the interaction of taxes and benefits showing that the system has evolved to the point where it may no longer fulfill the original intentions. The system today appears to redistribute income from working people, who on average have lower incomes, to the aged population, which today have higher incomes. We suggest the system is in need of significant reform.

Does tax competition soften regional budget constraint?

This paper analyses the impact of both horizontal and vertical tax competition on central government transfers towards regions, as well as on the softness of the regional budget constraint. We show that tax interactions have no impact on the optimal central government grant whereas they harden the regional budget constraint when the regional debt is not too heavy.

HTLV-1 Tax nucleocytoplasmic shuttling, interaction with the secretory pathway, extracellular signaling, and implications for neurologic disease

The human T cell leukemia virus type 1 (HTLV-1) oncoprotein Tax interacts with numerous cellular pathways promoting both the survival and pathogenesis of the virus in the human population. Tax has been studied extensively with respect to its role in transcriptional transactivation and its involvement in the up-regulation of a number of cellular genes during the process of oncogenic transformation. These processes are dependent on Tax localization to the nucleus where it interacts with a number of cellular transcription factors during its course of nuclear action. However, there is mounting evidence suggesting that Tax may shuttle between the nucleus and cytoplasm, localize to several cytoplasmic organelles with subsequent secretion from both Tax-transfected cells as well as HTLV-1-infected cells. In addition, the presence of cell-free Tax in cerebral spinal fluid (CSF) was recently demonstrated to occur during all stages of HAM/TSP. This has brought about an increased interest in the cytoplasmic localization of Tax and the implications this localization may have with respect to the progression of HTLV-1-associated disease processes. This review addresses the functional implications relevant to the localization and accumulation of Tax in the cytoplasm including the Tax amino acid signals and cellular protein interactions that may regulate this process. Specifically, we have discussed three important processes associated with the cytoplasmic localization of Tax. First, the process of Tax shuttling between the nucleus and cytoplasm will be described and how this process may be involved in regulating different transcriptional activation pathways. Second, cytoplasmic localization of Tax will be discussed with relevance to Tax secretion and the interaction of Tax with proteins in the cellular secretory pathway. Finally, the secretion of Tax and the effects of extracellular Tax on HTLV-1 pathogenesis will be addressed.

Optimal environmental taxes under relative consumption effects

This paper explores the interactions between carbon dioxide emissions taxes and a pre-existing income tax in a numerically calibrated model of climate change and the world economy. Based on evidence from the recent empirical literature, the model allows for the presence of relative consumption effects in the specification of preferences. In the absence of relative consumption effects, optimal emissions taxes would rise from US$44 to US$229 per tonne of carbon (in year 2000 dollars) over the course of the next century. These tax rates, which arise when emissions tax revenues are used to reduce taxes on personal income, are slightly above the present value marginal benefits of emissions control. Given realistic assumptions concerning the empirical magnitude of relative consumption effects, the optimal emissions tax rises from US$63 per tonne in 2005 and US$384 per tonne in 2105. Accounting for relative consumption effects reduces the perceived social benefits of consumption, thus increasing social willingness to pay for environmental quality while reducing both the costs of tax interaction effects and the benefits of efficient revenue recycling. Taken together, these factors support the implementation of comparatively high environmental taxes in the face of relative consumption effects.

Human T-cell leukemia virus type 1 Tax attenuates γ-irradiation-induced apoptosis through physical interaction with Chk2

Checkpoint kinase 2 (Chk2) is known to mediate diverse cellular responses to genotoxic stress. The fundamental role of Chk2 is to regulate the network of genome-surveillance pathways that coordinate cell-cycle progression with DNA repair and cell survival or death. Defects in Chk2 contribute to the development of both hereditary and sporadic human cancers. We now present evidence that the human T-cell leukemia virus type-1 (HTLV-1) Tax protein directly interacts with Chk2 and the kinase activity of Chk2 is inhibited by Tax. The physical interaction of Chk2 and Tax was observed by co-immunoprecipitation assays in HTLV-1-infected T cells (C81) as well as GST pull-down assays using purified proteins. Binding and kinase activity inhibition studies with Tax deletion mutants indicated that at least two domains of Tax mediate the interaction with Chk2. We have analysed the functional consequence of de novo expression of Tax upon the cellular DNA-damage-induced apoptosis, which is mediated by Chk2. Using transient transfection and TUNEL assay, we found that gamma-irradiation-induced apoptosis was decreased in 293T and HCT-116 (p53(-/-)) cells expressing HTLV-1 Tax. Our studies demonstrate an important potential target of Tax in cellular transformation.

Deregulation of cell-signaling pathways in HTLV-1 infection

Human T-lymphotropic virus type 1 (HTLV-1) infection is associated with the clonal expansion and transformation of mature T lymphocytes. While the mechanisms involved are incompletely understood the viral regulatory protein Tax plays a central role in these processes. Recent studies employing genomic and proteomic approaches have demonstrated the marked complexity of gene deregulation associated with Tax expression and confirmed the remarkable pleiotropism of this protein as evidenced by the numerous Tax-cellular protein interactions in infected cells. In this review, we summarize the role of Tax in the deregulation of selected cellular-signaling pathways. Specifically, this has focused on the influence and interaction of Tax with the AP-1 and NF-AT transcription factors, PDZ domain-containing proteins, Rho-GTPases, and the Janus kinase/signal transducer and activator of transcription and transforming growth factor-beta-signaling pathways. In addition to identifying the deregulation of events within these pathways, attempts have been made to highlight differences between HTLV-1 and -2, which may relate to differences in their pathogenic properties.

The bZIP Transcription Factor ATFx Binds Human T-Cell Leukemia Virus Type 1 (HTLV-1) Tax and Represses HTLV-1 Long Terminal Repeat-Mediated Transcription

The human T-cell leukemia virus type 1 (HTLV-1) viral protein Tax is a transactivator of transcription driven by the cognate viral long terminal repeat (LTR). Tax exerts its effect through three nonidentical copies of the Tax-responsive element (TxRE), a member of the asymmetric cyclic AMP response element (CRE) family of enhancer sequences. Transactivation is mediated via interaction of Tax with members of the CREB/ATF family bound to TxRE. We have identified a cellular repressor of transcription, activating transcription factor x (ATFx), as a novel Tax-binding protein. In addition to binding directly to Tax we show by electrophoretic mobility shift assay that ATFx binds to the TxRE enhancer element via the bZIP domain. The functional impact of this bridging interaction results in repression of both basal and Tax-induced transcription from the HTLV-1 LTR. ATFx is unique among ATF family of proteins in that it is cell cycle regulated and exerts a tight repressive control over apoptotic signaling. We propose that recruitment of ATFx to the HTLV-1 LTR serves to link viral transcription with critical events in cellular homeostasis.

Taxes and dividend clientele: Evidence from trading and ownership structure

Although dividend clientele have been studied over several decades, their existence remains controversial. We study the interaction of dividends and taxes by exploiting a unique dataset from Taiwan, where the capital gains tax is zero. We find strong evidence of a clientele effect. Agents subject to high rates of taxation on dividends tend to hold stocks with lower dividends and sell (buy) stocks that raise (lower) dividends. Agents in lower tax brackets behave in the opposite manner. After legalization of repurchases in 2000, firms with higher concentrations of more heavily taxed shareholders were more apt to begin repurchase programs.

A Novel NF-κB Pathway Involving IKKβ and p65/RelA Ser-536 Phosphorylation Results in p53 Inhibition in the Absence of NF-κB Transcriptional Activity

Nuclear factor kappaB (NF-kappaB) plays an important role in regulating cellular transformation and apoptosis. The human T-cell lymphotropic virus type I protein, Tax, which is critical for viral transformation, modulates the transcription of several cellular genes through activation of NF-kappaB. We have demonstrated previously that Tax inhibits p53 activity through the p65/RelA subunit of NF-kappaB. We now present evidence that suggests that the upstream kinase IKKbeta plays an important role in Tax-induced p53 inhibition through phosphorylation of p65/RelA at Ser-536. First, mouse embryo fibroblast (MEF) IKKbeta-/-cells did not support Tax-mediated p53 inhibition, whereas MEFs lacking IKKalpha allowed Tax inhibition of p53. Second, transfection of IKKbeta wild type (WT), but not a kinase-dead mutant, into IKKbeta-/-cells rescued p53 inhibition by Tax. Third, the IKKbeta-specific inhibitor SC-514 decreased the ability of Tax to inhibit p53. Fourth, we show that phosphorylation of p65/RelA at Ser-536 is important for Tax inhibition of p53 using MEF p65/RelA-/-cells transfected with p65/RelA WT or mutant plasmids. Moreover, Tax induced p65/RelA Ser-536 phosphorylation in WT or IKKalpha-/- cells but failed to induce the phosphorylation of p65/RelA Ser-536 in IKKbeta-/-cells, suggesting a link between IKKbeta and p65/RelA phosphorylation. Consistent with this observation, blocking IKKbeta kinase activity by SC-514 decreases the phosphorylation of p65/RelA at Ser-536 in the presence of Tax in human T-cell lymphotropic virus type I-transformed cells. Finally, the ability of Tax to inhibit p53 is distinguished from the NF-kappaB transcription activation pathway. Our work, therefore, describes a novel Tax-NF-kappaB p65/RelA pathway that functions to inhibit p53 but does not require NF-kappaB transcription activity.

Interaction of HTLV-1 Tax and methyl-CpG-binding domain 2 positively regulates the gene expression from the hypermethylated LTR

Epigenetic regulation of gene expression is critical in the maintenance of cellular homeostasis. Dysregulation of normal epigenetic transcription occurs in abnormal physiological conditions, such as those seen in cancer cells and cells infected with parasites, making the mechanism underlying abnormal epigenetic transcription of great interest. Gene expression of human T-cell leukemia virus type 1 (HTLV-1) is regulated by a viral transcriptional stimulator, Tax. We herein report a novel mechanism of transcription from the HTLV-1 long terminal repeat (LTR) that is regulated by Tax. In this study, we determined that Tax is able to activate transcription from the LTR, even when it was heavily methylated. In addition, the methyl-CpG-binding domain 2 (MBD2) protein played an important role in Tax-mediated transcriptional activation. We demonstrated the importance of a physical interaction between Tax and MBD2 in enhancing the transcriptional activity of Tax against the methylated LTR. Furthermore, we identified the formation of a protein complex composed of MBD2 and Tax bound to the methylated LTR. We propose a new model of epigenetic regulation by MBD2 acting in concert with a virally encoded transactivator, Tax. Our observation provides insight into the epigenetic regulation of gene expression and the diverse mechanisms of transcriptional regulation using methylated promoters.

Tax Interaction Effects, Environmental Regulation, and ?Rule of Thumb? Adjustments to Social Cost

Preexisting distortions in factor markets complicate the estimation of the social welfare effects of regulatory interventions. The existence of these tax interaction effects (TIEs) suggests that general equilibrium (GE) approaches should be used to evaluate regulatory policies. However, formal GE analysis is not always feasible for the numerous environmental regulations proposed by federal, state, and local agencies. The question addressed in this paper is whether an empirically based ‘‘rule of thumb’’ upward adjustment factor is appropriate to properly scale social cost estimates in environmental policy. We argue that such rule of thumb adjustments are significantly less reliable than estimates based on a detailed general equilibrium analysis because of the uncertainty about both the magnitude and sign of the social cost distortion. In addition to addressing this question, the paper gives an overview of TIEs and their relevance to environmental policy.

Les stratégies fiscales des collectivités locales

The purpose of this article is to deal with the theoretical funding, the consequences and the empirical relevance of strategic tax interactions among governments. Theoretically, tax competition and yardstick competition models may explain the existence of horizontal interactions namely among similar types of local governments. In addition, vertical interactions may arise between two overlapping governments sharing the same tax base. Empirically, many articles provide evidence of the existence of such strategic interactions. Various solutions have been developed to reduce the induced inefficiencies.

The Cost of Reducing Gasoline Consumption

High nominal gas prices, new awareness of threats to national security, and growing concern about global warming have reignited discussion of ways to reduce gasoline consumption in the United States. Debate centers on changing two policies already in place: the federal gas tax and Corporate Average Fuel Economy (CAFE) standards. Two influential recent reports find that increasing the gas tax would attain a given reduction in gas consumption at lower cost than would tightening CAFE standards (National Research Council, 2002; Congressional Budget Office, 2003). The gas tax has this advantage because it encourages not just increases in fuel efficiency, but also reductions in miles driven. In contrast, CAFE standards actually encourage more driving, because increases in fuel efficiency reduce the cost of gas per mile driven. We also compare the costs of the gas tax and CAFE standard but take into account interactions with preexisting tax distortions. Many papers examine the effects of these tax interactions in other contexts, but to our knowledge none of them considers the CAFE standard (see e.g., Lars Bovenberg and Ruud de Mooij, 1994; Ian Parry, 1995; Lawrence Goulder, 1995; Bovenberg and Goulder, 1996; Parry et al., 1999; Don Fullerton and Gilbert Metcalf, 2001). These interactions reduce the cost of the gas tax but increase the cost of CAFE, thus expanding the cost advantage enjoyed by the gas tax. This difference does not arise because the gas tax raises revenue, while the CAFE standard does not. Rather, this result is similar to that in West and Williams (2004a), which showed that, since gasoline and leisure are relative complements, raising the gas tax will increase labor supply, generating additional efficiency gains. In this paper, we estimate a consumer demand system using data from the Consumer Expenditure Survey and the California Air Resources Board and find that miles driven and leisure are relative complements. Thus, the gas tax encourages labor supply by raising the cost per mile driven, producing an additional efficiency gain. Conversely, because CAFE reduces the cost per mile, it discourages labor supply and yields an additional efficiency loss. While the induced changes in labor supply are tiny relative to the labor market, they are still substantial relative to the gas market and thus have a dramatic effect on the relative costs of the two policies. Our point estimates imply that they reduce the social marginal cost of the gas tax (starting from the status quo gas tax rate and ignoring the benefits of reduced gas consumption) by almost 30 percent, while increasing the marginal cost of CAFE by nearly 60 percent. This result implies that the case for raising the gas tax rather than tightening the CAFE standard is far stronger than previous studies suggest. Indeed, it strongly suggests that any tightening at all of the CAFE standard would lower welfare unless the benefits of reduced gas consumption have been seriously underestimated.

Enhanced Activation of Tax-dependent Transcription of Human T-cell Leukemia Virus Type I (HTLV-I) Long Terminal Repeat by TORC3

Tax, a protein encoded by the env-pX gene of human T-cell leukemia virus type I (HTLV-I), interacts with various host cell transcription factors. Tax activates transcription from the long terminal repeat (LTR) of HTLV-I through association with cyclic AMP-responsive element-binding protein (CREB). Here, we present evidence that transducer of regulated cyclic AMP-response element-binding protein 3 (TORC3), a co-activator of CREB, is involved in Tax-induced transcriptional activation from the HTLV-I LTR. By using a luciferase assay system, we show that TORC3 alone can enhance transcription from the HTLV-I LTR, as well as from a cellular cyclic AMP-response element (CRE). Interestingly, we find that co-expression of TORC3 and Tax dramatically increased transcriptional activation at the HTLV-I LTR. We also show by glutathione S-transferase pull-down and co-immunoprecipitation experiments that TORC3 interacts with Tax. Using deletion mutant analysis, we identify the Tax interaction domain of TORC3 as a region spanning from amino acid 1 to 103, which contains a coiled-coil domain. These results provide important clues toward understanding the molecular mechanism of Tax-dependent transcriptional activation of the HTLV-I LTR.

Environmental Amenities and General Equilibrium Deadweight Loss

This paper develops an analytical extension and numerical assessment of the importance of market and non-market distortions for the measurement of the deadweight losses associated with new tax or regulations. We build on the Goulder & Williams (2003) evaluation of tax interactions for Harbergerian measures of excess burden. Our primary focus is on the demand for environmental amenities. We find that treating air quality as a non-separable argument in the description of aggregate demands for the US economy changes estimates of excess burden as much as 30% in simulations where the benchmark value of the amenity represents less than 1% of GDP.