Tax Subsidies Research Articles

Subsydia podatkowe jako forma pomocy publicznej a dług sektora general government

This paper discusses guidelines for implementation of art. 107–109 of the Treaty on the Functioning of the European Union, from the perspective of tax aid. This should lead to verification of the thesis that due to economic recovery plan – in response to the effects of the financial and economic crisis – implemented at EU level, the support of the public authorities in the form of tax subsidies has become the most broadly used form of State aid due to the value among all the forms of aid granted by member states of the European Union. The adoption of such a thesis raises the question of the influence of state aid on the size of the general government sector debt in the EU member states, which have provided tax aid. This analysis was carried out based on the linear regression model. The response variable (dependent variable Y) is the size of the general government sector debt, and explanatory variable (independent variable X) is the expenditure on state aid.

THE ROLE OF INFORMATION ON RETIREMENT PLANNING: EVIDENCE FROM A FIELD STUDY

Many households neglect the pivotal task of planning for retirement. Proposals to stimulate employees to save for retirement in the workplace include tax subsidies, which are costly, and using automatic defaults, which may not complement the heterogeneous preferences of savers. This randomized field study shows that an information‐based intervention increases reported retirement plan participation, emergency savings, and using a budget. Employees offered access to education increased actual retirement deferrals by $26 per month. These results suggest that retirement education programs may be an effective strategy to increase retirement planning and saving behavior. (JEL J26, D14, D91)

How Do Nonprofit Firms Respond to Tax Policy?

We investigate the effects of variations in the value of the charitable contribution deduction on nonprofit firm behavior, including exploring for the first time the effects of the tax price of giving on fund-raising. We find that a 1 percent increase in tax subsidies is correlated with a 2.0 percent increase in fund-raising, while the elasticity of real charitable output to changes in tax price is less than one in absolute value for most firms. We derive a new equation for treasury efficiency in the presence of fund-raising and find that while our point estimates still support treasury efficiency, our confidence intervals are wide enough to allow some possibility that the deduction is not cost effective. Further, the modest elasticity of charitable output to tax price implies that tax subsidies can crowd out other revenue sources, such that the efficacy of the subsidy depends on the relative efficiency of these alternative sources.

The “Cadillac Tax” on Health Benefits in the United States Will Hit the Middle Class Hardest: Refuting the Myth That Health Benefit Tax Subsidies Are Regressive.

U.S. employment-based health benefits are exempt from income and payroll taxes, an exemption that provided tax subsidies of $326.2 billion in 2015. Both liberal and conservative economists have denounced these subsidies as “regressive” and lauded a provision of the Affordable Care Act—the Cadillac Tax—that would curtail them. The claim that the subsidies are regressive rests on estimates showing that the affluent receive the largest subsidies in absolute dollars. But this claim ignores the standard definition of regressivity, which is based on the share of income paid by the wealthy versus the poor, rather than on dollar amounts. In this study, we calculate the value of tax subsidies in 2009 as a share of income for each income quintile and for the wealthiest Americans. In absolute dollars, tax subsidies were highest for families between the 80th and 95th percentiles of family income and lowest for the poorest 20%. However, as shares of income, subsidies were largest for the middle and fourth income quintiles and smallest for the wealthiest 0.5% of Americans. We conclude that the tax subsidy to employment-based insurance is neither markedly regressive, nor progressive. The Cadillac Tax will disproportionately harm families with (2009) incomes between $38,550 and $100,000, while sparing the wealthy.

The Current and Projected Taxpayer Shares of US Health Costs.

We estimated taxpayers' current and projected share of US health expenditures, including government payments for public employees' health benefits as well as tax subsidies to private health spending. We tabulated official Centers for Medicare and Medicaid Services figures on direct government spending for health programs and public employees' health benefits for 2013, and projected figures through 2024. We calculated the value of tax subsidies for private spending from official federal budget documents and figures for state and local tax collections. Tax-funded health expenditures totaled $1.877 trillion in 2013 and are projected to increase to $3.642 trillion in 2024. Government's share of overall health spending was 64.3% of national health expenditures in 2013 and will rise to 67.1% in 2024. Government health expenditures in the United States account for a larger share of gross domestic product (11.2% in 2013) than do total health expenditures in any other nation. Contrary to public perceptions and official Centers for Medicare and Medicaid Services estimates, government funds most health care in the United States. Appreciation of government's predominant role in health funding might encourage more appropriate and equitable targeting of health expenditures.

The Effect of Energy Subsidy Removal on Energy Demand and Potential Energy Savings in Malaysia

Abstract The aim of this paper is to measure the the effects of energy subsidy removal on total energy demand and potential energy savings in Malaysia. The Computable General Equilibrium Model are employed. Simulations based on different groups of scenarios have been developed. These are: (1) Simulating the implementation of energy subsidy reform by removing fuel subsidies. (2) Simulating the implementation of energy subsidy reform by removing fuel tax subsidies. (3) Simulating the implementation of energy subsidy reform by removing both fuel subsidies and fuel tax subsidies. The results showed that, the removing of both fuel and tax subsidy (Scenario 3) policy have a stronger effect on final energy demand and potential energy savings. The estimated results showing that the potential energy savings (7,036 ktoe) from the total energy demand that could be grabbed under total subsidy removal is above to the target of National Energy Efficiency Master Plan (2010), that is 4,000 ktoe across sectors, while the final energy demand itself contributed about 1,558 ktoe or 39% from the national target. Importantly, the energy subsidy reform policy has found to be an efficient policy mechanism that could support the National Energy Efficiency Master Plan, 2010, as well as support towards utilization of “fifth fuel” policy under the Malaysian Fuel Diversification Policy.

Brownfield regeneration: Towards strengthening social cohesion?

In broader terms, the paper refers to the topic of brownfield regeneration, as one of the most complex mechanisms for sustainable spatial development. In addition to the fact that brownfield regeneration demands a variety of instruments, such as: tax subsidies, the change of land use ownership, soil remediation, planning regulative amendments, etc., the complexity of brownfield regeneration is primarily seen in a number of stakeholders participating in such a process. Thus, the paper focuses on the social aspect of brownfield regeneration - precisely, on researching the community role and reviewing the possibilities for achieving the 'local' interests in complex developmental processes. The main research hypothesis is that brownfield regeneration positively affects the creation of and strengthening the social cohesion in the areas close to the brownfield site. More precisley, the paper presents the ways towards strenghtening social cohesion in the initial phase of the brownfield regeneration process, as well as the effects of such a process in its operationalisation phase on social cohesion. The thesis is examined by two main parameters: 1) participation of local community, and 2) social costs and benefits of brownfield regeneration versus greenfield investment. The research results are presented in the form of argumentative essay. In fact, the critical overview of arguments for and against the main research hypothesis is provided based on the review of interdisciplinary literature in the domain of brownfield regeneration. Such research organisation ensures the identification and description of the measures needed for strengthening social cohesion, as an utmost goal of this research. The final research contribution is about offering the guidelines for similar methodological approach in urban research.

Subfederal Taxes as Sources of Budgets of State

Achievement of sustainable economic growth in Russia and stable socio-economic development of regions is impossible without creation of optimal system of budget relations. In the modern world, it is very important to provide the focus of reforming the process of execution of regional budgets on creation of effective means of managing regional finances. Subfederal taxes directly influence the creation of the whole taxation system of the state and financial state of citizens and play a significant role in the formation of revenue side of regional and local budgets. Therefore, the necessity for thorough study and search for ways of improvement and transformation of calculation and payment of these taxes is the most important element of law on taxes and charges. The object of the study is relations that emerge between public authorities of various levels and taxpayers regarding the payment of subfederal taxes into budgets of various levels. The purpose of the article is to determine the place and role of subfederal taxes in revenue side of budgets of various levels. Analysis of existing practice of collection of subfederal taxes shows that revenues from the viewed taxes grow annually. In order to determine true and substantiated reasons for positive or negative dynamics of volume of budget revenues, the author analyzes factors that comprise the structure of each tax and are the basis for changing their size. These factors include: dynamics of tax base; change of the quantity of taxpayers which use tax subsidies; growth or reduction of the role of shortfall in income due to provision of tax subsidies; change of tax rate by subfederal public authorities and management. On the basis of results of the research, the offers and recommendations regarding the development of subfederal taxes and the increase of their role in revenue of corresponding budgets are formulated. DOI: 10.5901/mjss.2016.v7n1p150

Three Interventions That Reduce Childhood Obesity Are Projected To Save More Than They Cost To Implement.

Policy makers seeking to reduce childhood obesity must prioritize investment in treatment and primary prevention. We estimated the cost-effectiveness of seven interventions high on the obesity policy agenda: a sugar-sweetened beverage excise tax; elimination of the tax subsidy for advertising unhealthy food to children; restaurant menu calorie labeling; nutrition standards for school meals; nutrition standards for all other food and beverages sold in schools; improved early care and education; and increased access to adolescent bariatric surgery. We used systematic reviews and a microsimulation model of national implementation of the interventions over the period 2015-25 to estimate their impact on obesity prevalence and their cost-effectiveness for reducing the body mass index of individuals. In our model, three of the seven interventions--excise tax, elimination of the tax deduction, and nutrition standards for food and beverages sold in schools outside of meals--saved more in health care costs than they cost to implement. Each of the three interventions prevented 129,000-576,000 cases of childhood obesity in 2025. Adolescent bariatric surgery had a negligible impact on obesity prevalence. Our results highlight the importance of primary prevention for policy makers aiming to reduce childhood obesity.

The effect of Health Savings Accounts on group health insurance coverage

This paper presents new empirical evidence on the impact of tax subsidies for Health Savings Accounts (HSAs) on group insurance coverage. HSAs are tax-free health care expenditure savings accounts. Coupled with high deductible health insurance plans (HDHPs), they together represent new health insurance options. The tax advantage of HSAs expands the group health insurance market by making health care more affordable. Using individual level data from the Current Population Survey and exploiting policy variation by state and year from 2004 to 2012, I find that HSA tax subsidies increase small-group coverage by a statistically significant 2.5 percentage points, although not coverage in larger firms. Moreover, if the tax price of HSA contribution decreases by 10 cents, small-group insurance coverage increases by almost 2 percentage points. I also find that for older workers or less-educated workers, HSA subsidies are associated with 2–3 percentage point increase in their group insurance coverage.

Supreme Court and Health Care Providers Weigh in on PPACA

•This column discusses the issues surrounding the Supreme Court decision on tax subsidies and a recent study from the Kaiser Family Foundation about what primary care providers think about the Affordable Care Act. Angela Golden, DNP, FNP-C, FAANP, is a past president of the American Association of Nurse Practitioners and is a family nurse practitioner in her own practice in Munds Park, AZ. She can be reached at .

Health Care and the Myth of Self-Reliance

Both pillars of the Affordable Care Act that are designed to facilitate universal coverage — the low-income tax subsidy and Medicaid expansion — have been subject to high-profile Supreme Court cases. While in King v. Burwell the Court saved the ACA’s low-income subsidy, in NFIB v. Sebelius the Court frustrated Medicaid expansion, at least temporarily. We argue that there is a deeper story about health care access for the poor. Drawing from the history of the American health care system, vulnerability theory, and demographic data, we demonstrate that all Americans lead subsidized lives and could find themselves quickly moving from the private to the public system. We contend that the apparent political preference for private, or “hidden,” government assistance over public, or “visible,” government assistance has its roots in the American myth of self-reliance. Our analysis debunks this myth and reveals that the line between hidden and visible government assistance fails both theoretically and empirically. We conclude that a single government program for the poor would be more economically and administratively efficient.

Medicaid Expansion Could Expand Funding, Increase Use of MH Services

Health center patients living below the federal poverty level in states that have chosen not to expand their Medicaid programs are likely to remain uninsured.

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

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

U.S. Supreme Court upholds subsidies in the Affordable Care Act

Millions of Americans will be able to keep their health insurance. In a 6-to-3 decision handed down on June 25, the U.S. Supreme Court ruled in favor of keeping tax subsidy credits intact for Americans purchasing health insurance under the Affordable Care Act's (ACA) health insurance exchanges.

Emerging challenges in implementing universal health coverage in Asia

As countries in Asia converge on the goal of universal health coverage (UHC), some common challenges are emerging. One is how to ensure coverage of the informal sector so as to make UHC truly universal; a second is how to design a benefit package that is responsive and appropriate to current health challenges, yet fiscally sustainable; and a third is how to ensure “supply-side readiness”, i.e. the availability and quality of services, which is a necessary condition for translating coverage into improvements in health outcomes. Using examples from the Asia region, this paper discusses these three challenges and how they are being addressed.On the first challenge, two promising approaches emerge: using general revenues to fully cover the informal sector, or employing a combination of tax subsidies, non-financial incentives and contributory requirements. The former can produce fast results, but places pressure on government budgets and may induce informality, while the latter will require a strong administrative mandate and systems to track the ability-to-pay. With respect to benefit packages, we find considerable variation in the nature and rigor of processes underlying the selection and updating of the services included. Also, in general, packages do not yet focus sufficiently on non-communicable diseases (NCDs) and related preventive outpatient care. Finally, there are large variations and inequities in the supply-side readiness, in terms of availability of infrastructure, equipment, essential drugs and staffing, to deliver on the promises of UHC. Health worker competencies are also a constraint.While the UHC challenges are common, experience in overcoming these challenges is varied and many of the successes appear to be highly context-specific. This implies that researchers and policymakers need to rigorously, and regularly, assess different approaches, and share these findings across countries in Asia – and across the world.

A Behavioral Contract Theory Perspective on Retirement Savings

The primary motivation for retirement savings policy is the view that many of us, if left to our own devices, will not save enough for retirement. Special tax subsidies for employer-sponsored retirement plans — a principal component of the federal policy scheme — have made such plans the predominant vehicle for private savings for retirement. A growing body of evidence shows that the details of plan design can have large effects on savings outcomes. The design of the “choice architecture” of these plans, however, is delegated to employers. We analyze the incentives for employer plan design produced by the labor market. Employers offer retirement plans to attract workers. If those workers make systematic mistakes in their retirement savings decisions, then the labor market will produce incentives for plan designs that generally fail to effectively address the problems. Indeed, the presence of workers who undersave due to myopia results in equilibrium employer plan designs that exploit the myopic by lowering their total compensation. Our analytic framework provides novel explanations for a range of features of plan design, including the high prevalence of matching contributions, the use of low default contribution rates in automatic enrollment plans, the shift away from annuities toward lump sum distributions, and the offering of investment options with excessive fees. The regulation of these plans should be reformed to address the problems with employer incentives that we identify. More fundamentally, our analysis calls for a rethinking of the current scheme’s special subsidies for employer-sponsored plans.

Limitations, Legacies, and Lessons

Over the past two decades, federal block grants and spatially targeted tax subsidies have become popular forms of federal assistance to disaster-affected areas. This article provides an overview and critical evaluation of the impact of the Gulf Opportunity Zone and the Community Development Block Grant–Disaster Recovery program in the years after Hurricane Katrina. I focus particular attention on the limitations, problems, and inequality reinforcing characteristics of the two programs. The experience in the Gulf South suggests that the effectiveness of the Community Development Block Grant program and spatially targeted tax incentives could be enhanced if policy makers build in clear rules and procedures for delivery of aid, enforce antidiscrimination statutes and fair housing laws, and exercise strong oversight over program implementation at the state and local levels. I conclude that the success of federal disaster recovery programs in realizing their recovery goals depends on political efforts to reduce class and racial inequalities and promote social justice.

BMI and Healthcare Cost Impact of Eliminating Tax Subsidy for Advertising Unhealthy Food to Youth.

Food and beverage TV advertising contributes to childhood obesity. The current tax treatment of advertising as an ordinary business expense in the U.S. subsidizes marketing of nutritionally poor foods and beverages to children. This study models the effect of a national intervention that eliminates the tax subsidy of advertising nutritionally poor foods and beverages on TV to children aged 2-19 years. We adapted and modified the Assessing Cost Effectiveness framework and methods to create the Childhood Obesity Intervention Cost Effectiveness Study model to simulate the impact of the intervention over the 2015-2025 period for the U.S. population, including short-term effects on BMI and 10-year healthcare expenditures. We simulated uncertainty intervals (UIs) using probabilistic sensitivity analysis and discounted outcomes at 3% annually. Data were analyzed in 2014. We estimated the intervention would reduce an aggregate 2.13 million (95% UI=0.83 million, 3.52 million) BMI units in the population and would cost $1.16 per BMI unit reduced (95% UI=$0.51, $2.63). From 2015 to 2025, the intervention would result in $352 million (95% UI=$138 million, $581 million) in healthcare cost savings and gain 4,538 (95% UI=1,752, 7,489) quality-adjusted life-years. Eliminating the tax subsidy of TV advertising costs for nutritionally poor foods and beverages advertised to children and adolescents would likely be a cost-saving strategy to reduce childhood obesity and related healthcare expenditures.

Cost Effectiveness of Childhood Obesity Interventions: Evidence and Methods for CHOICES.

The childhood obesity epidemic continues in the U.S., and fiscal crises are leading policymakers to ask not only whether an intervention works but also whether it offers value for money. However, cost-effectiveness analyses have been limited. This paper discusses methods and outcomes of four childhood obesity interventions: (1) sugar-sweetened beverage excise tax (SSB); (2) eliminating tax subsidy of TV advertising to children (TV AD); (3) early care and education policy change (ECE); and (4) active physical education (Active PE). Cost-effectiveness models of nationwide implementation of interventions were estimated for a simulated cohort representative of the 2015 U.S. population over 10 years (2015-2025). A societal perspective was used; future outcomes were discounted at 3%. Data were analyzed in 2014. Effectiveness, implementation, and equity issues were reviewed. Population reach varied widely, and cost per BMI change ranged from $1.16 (TV AD) to $401 (Active PE). At 10 years, assuming maintenance of the intervention effect, three interventions would save net costs, with SSB and TV AD saving $55 and $38 for every dollar spent. The SSB intervention would avert disability-adjusted life years, and both SSB and TV AD would increase quality-adjusted life years. Both SSB ($12.5 billion) and TV AD ($80 million) would produce yearly tax revenue. The cost effectiveness of these preventive interventions is greater than that seen for published clinical interventions to treat obesity. Cost-effectiveness evaluations of childhood obesity interventions can provide decision makers with information demonstrating best value for the money.