Tax Rate Adjustments Research Articles

Research on the Reasons and Impacts of The Implementation of The New Stamp Duty Law and Tax Rate Adjustment

On June 10, 2021, the Standing Committee of the National People's Congress adopted the Stamp Tax Law of the People's Republic of China, which was officially implemented on July 1, 2022. This is the first official legal document issued for stamp duty since the Provisional Regulations of the People's Republic of China on Stamp Duty issued by the State Council in 1988. The new stamp tax law redefines the stamp duty items, tax rates, tax bases, etc. on the premise of ensuring that the current tax system framework remains unchanged and the tax burden level is relatively stable. This article will analyze the impact of the reform of the new stamp tax law from the perspective of legislative thinking, market background, etc., and put forward suggestions on the direction of tax law reform based on this.

Optimal industry tax rate adjustment for investors in Denmark

The paper considers the possibility of setting differentiated corporate profit rates on foreign direct investment in various industries in Denmark in order to increase the country's economic growth. The development of one of the authors regarding the determination of equilibrium prices in retail trade was taken as the main method. According to this method, prices were raised for those goods that sold better. On the contrary, the prices of low-demand goods decreased. A test of that technique in the retail trade proved that customers who bought goods that went up in price did not abandon those goods. On the other hand, the sales of low-demand goods increased, as a result of which the traders' incomes increased. The adaptation of this principle for the reorganization of the taxation system was based on the idea that if the tax on a certain branch of the economy, which gives the largest income to the budget, is increased, investors will not refuse to invest it in the future, and a decrease in the tax on the branch that gives small deductions to the budget of the country, on the contrary , will attract additional investments. In order to limit the possible changes in tax rates for various sectors of the Danish economy, five Danish economists were involved, who expressed their opinion on the permissible limits of tax rate changes. The level of agreement between experts' opinions, determined by the Kendall concordance coefficient, was sufficient. The problem of mathematical programming was formulated in such a way that the total percentage of tax changes was equal to zero and that the tax change did not exceed the limits determined in advance by the experts. The optimal calculation of corporate tax rates for each industry in Denmark was performed using 2022 data, showing the following results: Agriculture, Forestry and Fisheries 20.96%, Mining 20.92%, Manufacturing 22.2%, Utilities 22 ,44%, Construction 21.93%, Trade and transport 22.25% , Information and communication 22.62%, Finance and insurance 22.93%, Real estate transactions and lease of non-residential buildings 22.13%, Residential houses 22.11%, Other business services 22.25%, Government, education and health care 21.01%, Arts, entertainment and other services 22.25%.

Steuertarif nicht der richtige Hebel für gezielte Entlastungen

AbstractWith the current high inflation, bracket creep is back on the agenda. The federal government has introduced a bill to compensate for this effect, among other things, by shifting income tax brackets. In the debate on bracket creep, the point of reference is very important. Results differ greatly depending on the period and the income concept considered. Moreover, the income tax burden must be seen in the context of the overall fiscal policy. The decision on tax rate adjustments is a political issue.

Tax Salience and Cyclical Asymmetry in Tax Rate Adjustments: Testing the Indirect Tax Hypothesis

In this paper, we explore the hypothesis that politicians prefer using direct taxes with relatively high salience for tax cuts during booms, while they prefer using indirect taxes with relatively low salience for tax increases during recessions. Using a panel data set of U.S. states from 1992 to 2014, we analyzed how cyclical fluctuations in resource availability affect the statutory rates of five major state taxes: general sales tax, personal income tax, corporate income tax, and two excise taxes (gasoline and cigarette taxes). Our results suggest that cyclical improvements in resource availability during booms lead to reductions in personal income tax rates, whereas cyclical deteriorations in resource availability during recessions result in increases in general sales tax rates.

Rising skill premium and the dynamics of optimal capital and labor taxation

With capital‐skill complementarity, the secular decline in the price of capital equipment due to equipment‐specific technological progress (ESTP) keeps pushing up the demand for skilled relative to unskilled labor and raising the skill premium. This paper quantitatively characterizes the dynamics of optimal taxation in response. Two main results emerge, regardless of whether the Ramsey (1927) or the Mirrlees (1971) approach is adopted. First, a tax on capital equipment corrects the “pecuniary externalities” caused by ESTP. The correction prescribes a downward or an upward adjustment of tax rates over time, depending on whether ESTP takes place at an accelerated or a decelerated pace. Second, both Ramsey and Mirrlees approaches prescribe an increasing marginal tax rate on labor income over time. Interestingly, we find that the prescribed pattern of optimal taxation resembles the empirical decline in capital taxes and the increase in labor taxes observed in the United States. In particular, despite the significant rise in the skill premium, the welfare gains of tax reform toward optimal Ramsey taxes are modest and small.

Designing tax levy scenarios for environmental taxes in China

The "Environmental Protection Tax Law of the People's Republic of China" came into effect on January 1, 2018. However, it's unclear whether the current tax rates, taxpayers, and levy scenarios are scientific and effective. Thus, determining how to improve the environmental tax can better protect and improve China's environment by reducing pollutant emissions. First, we developed a tax rate adjustment (TRA) model based on a directional distance function. Next, we used a multi-regional input-output analysis to construct a production- and consumption-based tax (PCT) model. Then, based on the current tax levy, we proposed three new levy scenarios by combining the TRA and PCT models, and on this basis, identified two gradual environmental tax reform paths. To demonstrate our approach, we selected China's 30 provinces or provincial-scale administrations for an empirical analysis of sulfur dioxide (SO2) and nitrogen oxides (NOx). We found that China should prioritize raising tax rates in the short term, especially for NOx. In the long term, China should consider incorporating consumption-based environmental responsibility into the framework of the tax model. Our results provide theoretical support for gradual reform of environmental taxes and a scientific basis for promoting more sustainable development and rational planning of emission reduction plans.

Primary Suppliers Driving Atmospheric Mercury Emissions through Global Supply Chains

Summary The Minamata Convention on Mercury, which came into force in 2017, aims to control mercury-related risks to human beings and ecosystems by reducing anthropogenic mercury (Hg) emissions. Existing studies have identified direct atmospheric Hg emitters and final consumers causing atmospheric Hg emissions but overlooked primary suppliers driving atmospheric Hg emissions through global supply chains. Here, we identify critical primary suppliers and supply-chain paths for global atmospheric Hg emissions in 2015. Results show that China, Indonesia, and India are major primary suppliers causing global atmospheric Hg emissions. Major sectors and critical supply-chain paths from the supply viewpoint are related to resource extraction and power generation. Findings of this study can support supply-side measures to implement the Minamata Convention on Mercury, such as the optimization of labor and capital input structures and the optimization of product-allocation behaviors to downstream producers.

The impacts on CO2 emission reduction and haze by coal resource tax reform based on dynamic CGE model

The paper builds a dynamic computable general equilibrium model (Dynamic CGE Model) to evaluate the impact on carbon emissions reduction and haze with different scenarios of coal resource tax rate adjustment. The results shows that: Overall speaking, coal resource tax reform can be conducive to promote CO2 emission reduction and environmental benefits from a longer time rang, but the impacts are different with the three kinds of policy design which are 2%,5% and 10% respectively. Increased coal resources tax inhibits resources consumption, improves resource utilization efficiency, and reduces haze emission; meanwhile, the implementation of resource value compensation policy plays a more positive role in improving the environment quality. Compared with the impact by 2% and 10% tax rate, 5% Ad valorem tax should be a reasonable and effective choice for decreasing CO2 emission and PM2.5&PM10, and improving environment welfare. Therefore, some suggestions are given as following: 1) it is necessary to choose coal resource tax rate properly and scientifically. 2) Integrating the policy of resource compensation into the category of resource tax, and further clarify the form of resource compensation standards. 3) Paying more attention to the coordination of resources policy; 4) important mineral resources, forest resources should be incorporated into the resource tax policy.

СОВЕРШЕНСТВОВАНИЕ НАЛОГОВОГО АДМИНИСТРИРОВАНИЯ НДС В ИНТЕРЕСАХ ГОСУДАРСТВА И НАЛОГОПЛАТЕЛЬЩИКОВ

Despite the fact that the tax regulation of VAT has been improving since its introduction in Russia, disputes over its further reformation are still ongoing. In this regard, the paper describes an attempt to justify the need of reforming the method of VAT calculation and administration not only in the interests of the state, but also in the interests of the taxpayers, which requires thorough weighting of all the positive and negative consequences of the proposed changes in tax legislation. The analysis of the quality of administration and structure of VAT revenues to the state budget of Russia showed imperfection of the structure of the tax on relation to the value added tax calculated for payment to the budget and the amount of tax deductions. With this structure more than 93% of the VAT amounts are subject to reimbursement from the budget. In such proportions, the administration of VAP is not effective, despite the annual improvement in the quality of tax control. For the solution of the revealed problems, it has been offered to carry out inventory of tax privileges and exemptions on VAT for their further processing in respect to the contents and structure. Representatives of the expert community warn against risky options for raising VAT rates, which will cause fast growth of inflation in Russia and neutralize the activities of the Central Bank of Russia to reduce inflation. The possible variants of complex adjustment of tax rates of VAT and insurance contributions to extra-budgetary funds, which will not only increase the tax revenues of the budget, but also reduce the tax burden on the activities of economic entities, are considered.

Capital Structure Model (CSM): correction, constraints, and applications

This paper extends the Capital Structure Model (CSM) research by performing the following tasks. First, a correction is offered on the corporate tax rate adjustment found in the break-through concept of the levered equity growth rate (gL) given by Hull (2010). This correction is important because gL links the plowback-payout and debt-equity choices and so its accuracy is paramount. Second, this paper introduces a retained earnings (RE) constraint missing from the CSM growth research when a firm finances with internal equity. The RE constraint governs the plowback-payout and debt-equity choices through the interdependent relation between RE and interest payments (I). Third, a by-product of the RE constraint is a second constraint that governs a no-growth situation so that I does not exceed the available cash flows. Fourth, with the gL correction and two constraints in place, updated applications of prior research and new applications are provided. These applications reveal lower gain to leverage (GL) values than previously reported with more symmetry around the optimal debt-to-equity ratio (ODE) while minimizing steep drop-offs in firm value. For larger plowback ratios, the optimal debt level choice can change. The new constraints serve to point out the need for further research to incorporate external financing within the CSM framework.

The CCCTB Relaunch: A Critical Assessment and Some Suggestions for Modification

textabstractWinds of change have been blowing through the world of international company taxation, with company tax planning and country tax competition increasingly attracting questions from the general public, the media, politics and academia. The most systemic corporate tax reform proposal in the EU so far has come from the European Commission: on 25 October 2016, as part of a broader package of corporate tax reforms, the Commission released proposals for a Council Directive on a Common Corporate Tax Base (CCTB) and a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB), thus relaunching its original CCCTB proposal of 16 March 2011 in two stages. The CCTB/CCCTB proposals have not, however, been particularly warmly welcomed in the EU Member States. The Commission regards the CCCTB as the holistic solution for BEPS issues in the EU, while the impact assessment it presented stated that the expected economic benefits of a CCCTB for the internal market would be slightly positive (assuming an absence of tax planning under a CCCTB and tax rate adjustments in EU Member States to stabilise corporate tax revenues). Yet various EU Member State parliaments raised formal objections to the CCTB/CCCTB proposals, while others were very critical, but did not formally issue an objection. The objections raised show that at least a number of Member States are quite explicit in considering the proposals to fall outside EU competences. What has gone wrong? How come a perceived holistic and growth-friendly solution to a societally relevant problem is facing such political resistance in the EU Member States, or at least in a significant number of them? This paper asks whether the CCTB/CCCTB proposals adequately respond to societal calls for a properly functioning company taxation system in the EU; in other words, a system that reflects the spirit of the internal market, as well as the needs and interests of the individual EU Member States? If the answer to this question is negative, how, then, should we seek to tax multinationals in the internal market?

A Study on the Single Tax Rate Adjustment and the Compound Proportional Rate Application for Value Added Tax

A Study on the Single Tax Rate Adjustment and the Compound Proportional Rate Application for Value Added Tax

Local-central Intergovernmental Fiscal Relations of China

For a large country like China, handling of intergovernmental fiscal relations must create compatible incentives to central and local governments. China initially created a fiscal management system characterized by tax sharing in 1994, basically meeting the needs of its socialist market economic system. Yet further improvements must be made to the assignment of administrative authority and expenditure responsibilities, revenue allocation and the fiscal transfer payment system. This paper is based on the author’s previous research and the recent situation of adjustment in China’s intergovernmental fiscal relations. The paper examines the problems of local-central fiscal relations: insufficient alignment between fiscal revenues and administrative authority; uncertainty of sharing the revenue from income tax and value-added tax; imperfect tax rebate and transfer payment system. Concludes that uncertainties of local fiscal resources inevitably affected the behavior of local governments. The paper describes the land sales revenues of local government as the example how the interplay intergovernmental fiscal relations with other systems threatens socio-economic sustain-ability of China. The following measures in tax reforming are suggested: increasing the share of local governments in VAT distribution; reducing the property tax rates; canceling tax rebates; endowing local governments with certain taxing authority, including legislation and tax rate adjustment. In handling intergovernmental fiscal relations, great attention must be paid to the system’s stability to give play to its function of incentives and restraints. Highlights China must create a hierarchical fiscal management system in line with its modern fiscal system and further standardize the division between administrative authority and expenditure responsibilities China should formalize a fiscal transfer payment system, and develop a hierarchical fiscal management system encompassing the sharing of tax, rents and profits For citation Yang Zhiyong. Local-central Intergovernmental Fiscal Relations of China. Journal of Tax Reform, 2017, vol. 3, no. 2, pp. 92–102. DOI: 10.15826/jtr.2017.3.2.033 Article info Received April 10, 2017; accepted July 31, 2017

Tax Stimulation of Innovation Activities Enterprises

Purpose: Russia’s transition to innovation economy is one of the main ways to restore and develop the economic potential of the country. To achieve these objectives, it is necessary to ensure corresponding conditions and environment for the effective functioning of all economic entities. That concerns, first of all, tax incentives for innovative activities of enterprises. Methods: The study used a technique for comparative analysis. Results: In this regard, the article offers a scheme demonstrating the impact of the tax component, at every stage of the innovation life cycle, on the operating rate of enterprises as well as innovative development of the country. The system allows changing the rate of tax burden on economic entities by means of applying tax rate adjustment factors for the identified types of taxes, levies, duties and expenses with regard to expenditure pattern and export and import operations of current and permanent assets. Conclusions: basing on the analysis conducted, interdependencies between the fluctuations in interest rates on securities, income tax rate, capital tax (including the progressive, regressive and proportional taxation) and the rate of income on securities and revenue (before tax and retained profits) have been identified, which appear in the course of relations between state revenue (fiscal control) bodies, innovation-active economic entities and investors. DOI: 10.5901/mjss.2015.v6n1s2p42

Assessing the Impact of Introducing an ACE Regime - A Behavioural Corporate Microsimulation Analysis for Germany

In their famous Mirrlees review (2011) on reforming the tax system for the 21st century, the authors put forward the introduction of an allowance for corporate equity regime. In recent years, several countries introduced an ACE regime. The main feature of an ACE regime is that it removes tax distortions on marginal investment and finance distortions. Yet, by narrowing the tax base an ACE regime potentially requires an increase in tax rates which might affect location choices and profit shifting activity negatively. In this paper, we employ a microsimulation model to determine the consequences of introducing an ACE regime in Germany. The simulation results show that granting an ACE for corporate income tax purposes results in a revenue loss of about 18%. This could be financed by an increase of the combined profit tax rate by 6 percentage points. At firm level, our analysis illustrates the heterogeneous distribution of the reform effect accross the sample. For 50% of firms between the 25th and 75th percentile, introducing an ACE regime reduces tax payments between 35% and 2%. If the ACE is combined with a tax rate adjustment, the tax effect ranges between -32% and +7.1% for firms between the 25th and 75th percentile. With respect to behavioural responses on decision margins, we find that introducing the ACE reduces the mean debt-ratio by about 1.5 percentage points in the short run. For the capital-stock we arrive at a mean short-term increase of 2.4%. Finally, our computations show that the ACE regime with adjusted profit tax rate cannot be overall tax neutral. In particular, the increase in the profit tax rate required to finance the equity allowance induces intensified outward profit-shifting activities and affects location choices negatively. In the short-run the tax revenue is therefore shown to decline to about 95% of its original level.

Provincial Tax Rate Adjustments in Canada

Changes to tax rates are important fiscal events in Canada. They affect the amount of taxes that Canadian households and businesses pay to governments, and the level of economic activity by affecting incentives to work, save, and invest. Thus it is important to understand what factors cause governments to increase or reduce their tax rates.A recent study by Ergete Ferede, Bev Dahlby, and Ebenezer Adjei sheds some light on some of the factors that determine the timing and direction of tax rate adjustments by provincial governments. The main conclusions from the study are: A province’s fiscal position affects the direction and timing of its tax policy:• Provincial governments that start with higher corporate, personal, and sales tax rates are more likely to cut, and less likely to raise, their tax rates.• A higher provincial budget deficit reduces the probability of a corporate tax rate cut and raises the probability of a sales tax rate increase. • An increase in the provincial corporate income tax rate is more likely in a year in which the provincial government raises its personal income tax rate and vice versa.

Provincial Tax Rate Adjustments in Canada

Provincial Tax Rate Adjustments in Canada

Experimental evidence on dynamic pollution tax policies

This paper uses laboratory experiments to provide primary empirical evidence on dynamic pollution tax policies. In particular, we investigate a setting where a regulator with incomplete information uses a pollution tax mechanism with a simple, endogenous tax rate adjustment rule to cost-effectively meet a pollution standard. This mechanism provides the opportunity for firms to strategically abate in order to reduce future tax rates. The experiments vary important policy design features such as the type of tax (ambient or emissions), the initial tax rate, and the tax rate adjustment speed. We find that in equilibrium the pollution standard is met on average for each of these settings. The observed long-run tax rates vary considerably across policy designs, which can be explained with a theory that allows for a mix of strategic and myopic firms, along with the recognition that the incentives generated by the policy design can influence whether an agent plays myopically or strategically.

Efficient and incentive-compatible resource allocation mechanism for P2P-assisted content delivery systems

In this paper, we propose an efficient resource allocation mechanism for Peer-to-peer(P2P) assisted content delivery systems. The key component of the mechanism is a novel distributed data bartering protocol that can redistribute the bandwidth resources among peers according to their contributions. It is formally proved that the proposed mechanism is incentive-compatible, i.e., the only optimal strategy of each peer is to behave honestly and to contribute as much as possible. Based on the proposed mechanism, we design a general P2P-assisted content delivery system for delivering both live video streams and static files. We also propose the design of some key modules including peer/data organization, bandwidth allocation, data scheduling, and tax rate adjustment. We implement our system on a packet-level simulator and simulate two scenarios: P2P live streaming and P2P file sharing. Experimental results on real world traces show that the system can provide both differentiated services and satisfactory performance to peers. Furthermore, when bandwidth resource levels are dynamic, the system can still guarantee consistent service quality by adjusting the global tax rate adaptively. We also find that our system can effectively defend against dishonest behaviors even when the percentage of cheating peers is as high as 50%.

Trade policy dynamics, entry costs, and exchange rate uncertainty

This article analyzes trade policy dynamics when there are sunk costs of entry and demand uncertainty. A natural generalization of the classic export tax prescription for a domestic industry facing downward-sloping foreign demand is defined and implemented as a dynamic competitive equilibrium with fully rational firms. The optimal tax rate adjustment policy is a trigger strategy. This provides a rationale for infrequent revisions of trade policy in response to exogenous shocks.