Tax Support Research Articles

Quantifying the net impact and redistribution effects of airlines’ exits on passenger traffic

This paper studies the impact of airlines’ exits on passenger traffic. In this regard, univariate and multivariate structural time series have been applied. They have proved useful to quantify the net impact on passenger traffic and redistribution effects among incumbent airlines. As an application, a natural experiment is studied, in which two relevant airlines filed for bankruptcy in different periods. In the first, policymakers employed a laissez faire strategy, whereas in the second, they applied an incentive scheme programme. The programme was based on the support of destination promotion, tax and tariff discounts. Overall, the paper shows that under laissez faire, the incumbent airlines did not take over the passenger traffic left by the airline that exited the route. However, in the second case, following approval of the incentive scheme, the loss of passengers was mitigated by the incumbent airlines.

Supporting carbon taxes: The role of fairness

While the economic case for carbon pricing is compelling, public support for it remains low. Using a stated-choice experiment with a sample of 6000 German household heads, we examine how their fairness preferences influence support for carbon taxes under different revenue uses. We find that respondents who prefer green spending are more likely to support a carbon tax, but the support diminishes considerably for higher tax rates – in contrast to respondents who support social cushioning. When restricted to options for direct revenue redistribution, Germans prefer lump-sum payments over directing payments to the poorest or the most affected. Preferences over these options depend both on genuinely different concepts of fairness and economic circumstances. Our findings have implications for advancing carbon pricing, as its support can be increased substantially when designed according to citizens' fairness preferences.

Knowing behavior matters doesn’t hurt: the effect of individual climate behavior messaging on green policy support

Abstract Individual behavior change offers a large potential to curb greenhouse gas emissions. However, messaging promoting individual behavior change has been criticized as a strategy for addressing climate change due to its potential to diminish climate policy support. In a pre-registered study with a representative sample of American adults (n = 1069), we found that messages recommending the adoption of high-impact individual climate behaviors, such as flying less, eating less meat and reducing food waste, and highlighting their large impact do not affect support for a carbon tax. In an exploratory analysis, we found that this messaging results in a higher intention to adopt several climate behaviors. We recommend that interventions that advocate for individual climate action be best understood as complements, rather than undermining substitutes, to broad carbon regulatory policy.

Danes’ attitudes towards climate taxes on air travel and beef

Climate taxes are among the most important political tools in the green transition. In Denmark, debates about this often focus on air travel and beef. The study is based on a survey collected after the 2019 national election and shows that there is great support for a climate tax on air travel but not on beef. Moreover, the study shows that support varies across age groups, income, education, and political trust. The effect of these explanations varies between climate taxes on air travel and beef.

India's Public Education Subsidies

The purpose of this paper is to examine how higher education in India is currently supported, as well as the viability as well as feasibility of alternative financing plans. In India, the government pays for the majority of higher education. Furthermore, since higher education helps both individuals and communities, and since it draws society's wealthier members, a case might be made for moving the economic strain from the social to the private realm. Given financial constraints and concerns about justice, it is suggested that paying higher education largely via general tax revenue may not be the best long-term plan. As a consequence, many policy solutions are considered, including public support of higher education, student loans, graduate tax, student fees, and private sector engagement. A discriminating pricing system, it is said, would be the most efficient and equitable of the possibilities. While the government will continue to fund a large portion of higher education costs owing to socioeconomic and political realities, efforts should be made to build a funding model that integrates a range of techniques rather than relying on a single one. Fee and subsidy policies should also be differentiated across several levels as well as varieties of higher education, according to the authors.

Зарубіжний досвід формування та реалізації податкової політикита його імплементація в Україні

Проаналізовано зарубіжний досвід формування та реалізації податкової політики, з огляду на стимулювання економічної активності суб’єктів підприємницької діяльності. Виявлено, що податкова політика здебільшого орієнтована на спрощення умов для підприємницької діяльності та стимулювання інноваційної діяльності суб’єктів підприємництва. Країни Європи націлені на гармонізацію податкового законодавства. Найактуальнішими для України є такі напрями податкової політики: державна допомога суб’єктам малого й середнього бізнесу; державна допомога, пов’язана із енергозбереженням і захистом довкілля; надання податкових пільг інвестиційно-інноваційного спрямування.

ПОДАТКОВЕ СТИМУЛЮВАННЯ ВИРОБНИЧИХ ПРОЦЕСІВ АГРОПРОМИСЛОВОГО КОМПЛЕКСУ

The article considers tax incentives as one of the ways of economic development and creating the effect of tax assistance to the agro-industrial complex, which is expressed in tax support for crop production, animal husbandry, as well as the ratio of tax support to GDP, value added, agricultural output, profit. In this article, the main purpose of tax incentives is, first of all, to encourage business activity of business structures, which aims, when expanding their activities, to accumulate funds in budgets through the payment of tax payments. A component of the formation and implementation of the system of tax incentives for the production processes of the agro-industrial complex is the implementation of obligations to ensure the priority development of this sector of the national economy. The article uses the method of analysis for strategic tax planning, as well as to determine the level of influence of economic and financial factors on the performance of indicators for the payment of taxes and fees. Also, the generalization of the work is based on the use of the indicator of fiscal efficiency of the tax system in order to implement the obligations to ensure the priority development of this sector of the national economy. The organization of the process of tax stimulation of the agrarian complex in the national economy is offered. Indicated and provided the main purpose of tax incentives. The priority directions of formation and realization of the system of tax stimulation of production processes of the agro-industrial complex concerning maintenance of priority development of the given sector of national economy are offered also. The main stages of development of an effective tax policy of an agro-industrial enterprise are considered.

НАПРЯМИ ПІДВИЩЕННЯ КОНКУРЕНТОСПРОМОЖНОСТІ МОРСЬКОЇ ТРАНСПОРТНОЇ ІНФРАСТРУКТУРИ УКРАЇНИ

The article summarizes the main directions for increasing the competitiveness of the maritime transport infrastructure of Ukraine, taking into account European integration. To improve the competitiveness of maritime transport infrastructure in Ukraine, it is necessary to identify and justify strategic directions for the modernization and restructuring of maritime transport infrastructure, with the help of investment and tax support, improve state regulation through the introduction of promising achievements of scientific and technological progress, technological and organizational innovations, promote the constancy of foreign economic interests of subjects of the maritime industry of Ukraine on the world stage. It was noted that for the effective implementation of foreign economic activity in the field of maritime transport infrastructure, first of all, to bring the institutional and legal support in line with the requirements of international standards. The next step to improve the competitiveness of maritime transport infrastructure is the introduction of «port-landlord» management modules, the formation of centers for the development of maritime transport infrastructure (clusters), as well as the implementation of the «dry ports» logistics technology. Also, an integral part of increasing the competitiveness of maritime transport infrastructure is the improvement of information logistics and an increase in the overall level of informatization of port activities. These include trade facilitation, with the help of the European customs information system NCTS (The New Computerized Transit System), the implementation of “the Maritime Single Window” and “SafeSeaNet” systems. Another key area for increasing the competitiveness of the maritime transport infrastructure is to ensure the environmental safety of the functioning of the maritime transport infrastructure. The proposed directions will ensure the constant, efficient, competitive, and stable development of Ukraine’s maritime transport infrastructure. The presented strategic directions for increasing the competitiveness of the maritime transport infrastructure of Ukraine will make it possible to get closer to European standards and ensure the adoption of effective administrative and managerial decisions. The implementation of the proposed directions will ensure an increase in the competitiveness of the maritime transport infrastructure of Ukraine, aimed at consistent integration into the European and world maritime transport markets.

НАЛОГОВАЯ И БЮДЖЕТНАЯ ПОДДЕРЖКА IT-КОМПАНИЙ В УСЛОВИЯХ ДЕЙСТВИЙ ОГРАНИЧИТЕЛЬНЫХ МЕР

The article examines the measures of tax and budget support for the IT sector in the Russian Federation, adopted under restrictive measures, analyzes their effectiveness, and formulates proposals for their improvement.

Tax Support for the Service Industry in Korea

Tax Support for the Service Industry in Korea

Налоговые способы поддержки бизнеса в России в период коронавируса

The current events caused by the COVID-19 pandemic concern all spheres of life of every citizen and every enterprise (organization). Forced changes pose a lot of urgent issues to the leadership of the state, regions, municipalities, and individual economic entities. Among such issues, the most important ones are the retention of income and sources of salary payments, the possibility of obtaining tax breaks, the search for attracting additional resources to the turnover of enterprises when revenues from current activities are reduced, possible sanctions for non-fulfillment or improper fulfillment of obligations. A significant tool during the pandemic is the state tax policy. In the context of the coronavirus pandemic, there have been changes in the system of business and economic relations around the world. The first introduction of quarantine immediately showed how much businesses, especially small and medium-sized ones, were not ready for such situations, how difficult it was for them to survive and save jobs. In order to provide anti-crisis support to enterprises, the state introduces tax incentives and relief, since it is in these conditions that state support is extremely important for economic entities. If in stable economic conditions tax instruments for supporting and stimulating business are benefits, especially in terms of innovative developments and investments, in crisis economic conditions these are, as a rule, deferrals and installments of payments for taxes and fees. The tax burden on Russian business is quite heavy in any situation due to the economic nature of tax payments, but in crisis circumstances, including those caused by the coronavirus pandemic, the tax burden becomes unbearable for many business entities that naturally expect effective measures of support from the state. At the same time, it is necessary to achieve a balance of interests of business and the state in matters of taxation in order to protect against threats and challenges of the external environment. The article discusses state measures of tax support for Russian business during the coronavirus pandemic, the so-called “quarantine assistance”. This is exemption from taxes and fees for the reporting tax periods, as well as postponement of tax payments, reduction of insurance premiums, and other measures of state support for entrepreneurs. An effective state tax policy in difficult epidemiological conditions, which necessitates a partial or complete shutdown of some industries, will contribute to a successful way out of the crisis and strengthen the economic security of the state. The article also suggests possible tax measures so that taxpayers do not feel the pressure of an excessive tax burden where it is not required, both during the pandemic and on the way out of the crisis situation. Contribution of the authors: the authors contributed equally to this article. The authors declare no conflicts of interests.

THE STATE OF THE PENSION INSURANCE ACCOUNTING PROVISION ENVIRONMENT

The subject of the article is theoretical and applied principles of accounting support of pension provision in Ukraine. The purpose of the publication is the formation of theoretical and methodological and applied aspects of accounting and tax support of pensions in Ukraine. In the course of the research such methods were used as: systematization and generalization, retrospective analysis of the state of pension provision. The main aspects of providing pension insurance in Ukraine are considered. The issue of essential characteristics and structure of the pension system in accordance with the Law of Ukraine "On Compulsory State Pension Insurance" was updated. The main problems of the current state of pension provision have been identified, namely: imbalance of the Pension Fund budget revenues with its expenditures, which leads to a constant deficit of funds in it; a sharp increase, as a result of the 2011 pension reform, retirement age and length of service; rapid growth of the ratio between citizens of working and working age; a fairly high percentage of payment of cash contributions to the pension fund; low level of pension benefits, sometimes less than the subsistence level; underdeveloped system of private pension provision and ignorance of Ukrainian citizens with the pension system. The main aspects of pension reform in Ukraine are presented and the main principles that will help to improve the situation are highlighted. These include, in particular, such as: recalculation of pensions using modern indicators of the salary base; strengthening the requirements for insurance experience. The research of scientific works revealed the types of private pension funds, the expediency and efficiency of their activities, systematized the benefits of creating enterprises to ensure future costs and payments. The article examines the peculiarities of creating preferential pensions at the enterprise, outlines the main aspects of accounting for pensions, taxation of contributions to private pension funds, summarizes the impact of costs incurred in creating the provision of pension benefits for income tax.

Critical Analysis of the Significance of Tax Incentives for the Cultural Industry in the Pre-digital Era and in the Context of Digitalization

The article is devoted to the assessment of historical experience, modern solutions and prospects for the use of tax instruments to influence the cultural industry as a creative component of national economic systems, as well as the world economy. The purpose of the article is to conduct a critical analysis of the significance of fiscal measures to promote the development of culture both at the pre-digital stage of the formation of the system of world economic relations, and in the modern digital world. The article verifies two hypotheses: (H1) the postulate about the need for tax support for culture in order to obtain noticeable material and intangible results of the cultural industry in the context of the transition to a digital economy; (H2) the assumption that tax incentives stimulate research and development activities in the cultural industry. The authors reveal the consistency and continuity of the use of appropriate methods throughout the history of the development of human civilization in civilizations and states of different degrees and levels of their economic and institutional development. It is concluded that from the time of the emergence of ancient classical states to the present, the tools of tax policy necessarily include mechanisms of tax benefits in the cultural industry. At the same time, the fiscal function of taxes in the sphere of culture is insignificant in terms of its economic consequences; the highest priority here is given to tax incentive measures, which include, first and foremost, corresponding tax benefits. The importance of tax incentives as leading instruments in this context is empirically substantiated by the example of China. In the modern digital world, the cultural industry is under the influence of regulatory tax measures that are transforming under new conditions, which include both innovative taxes (a tax on digital services) and new forms of fiscal interaction (interstate cooperation that has spread to the field of cultural interaction in the field of activities of transnational corporations in the digital sector).

Straight to the (Revenue) Source: Contextual and Individual-Level Determinants of Attitudes Toward Local Taxes

In this article, we investigate the relative roles of local tax policies and respondent attitudes and characteristics in shaping support for local taxes. Using a unique set of survey data collected across dozens of cities over several years, combined with contextual data on local tax systems, we can offer a comprehensive picture of who supports, and who opposes local taxes. The contributions of our approach are three-fold: We use measures of satisfaction with local taxes, using data gathered across dozens of localities; we incorporate measures of the local tax systems to help account for city-to-city variation in local tax attitudes; and we incorporate measures of racial attitudes to account for an important non-material element heretofore not incorporated in studies of local tax attitudes. Integrating these factors into an explanation of local tax policies rounds out and offers a more realistic understanding of attitudes in this critical policy area.

Regions of the North-West of Russia: Analysis of the Conditions for the Implementation of Social Innovation

Introduction. International experience shows that social innovation is an important tool for regional development, although this type of innovation is a relatively new phenomenon for Russia. On the basis of the research conducted, the article analyzes the conditions for the implementation of social innovation which has a significant potential to meet the challenges of territorial development. Materials and Methods. Based on materials from open sources, as well as on an expert survey conducted by the Vologda Research Center of the Russian Academy of Sciences with the direct participation of the author, the conditions for the implementation of social innovation prevailing in the constituent entities of the Northwestern Federal District of the Russian Federation were analyzed in the context of legal, infrastructural, economic, and socio-cultural components. Using the results of the expert survey, a quantitative assessment of the level of development of the conditions for the implementation of social innovation was given. The main barriers preventing the reproduction of social innovation within the territory under consideration were revealed. Results. The study has revealed that in the regions of the Northwestern Federal District the conditions for the implementation of social innovation are at the stage of active development: infrastructure and legislation are being formed; financial, tax and property support is being provided; educational programs are being implemented. The study has also shown that there are a number of problematic aspects associated with the underdevelopment of the regulatory framework, with the lack of Centers for innovation in the social sphere in a number of constituent entities, with the limited availability of some financial instruments, with low social and innovative activity of people, etc. Discussion and Conclusion. The results obtained are supported by other studies, which substantiates the need for policy adjustment towards improving the relevant regulatory framework, economic conditions, infrastructure, and socio-cultural environment. The research materials can be used by regional authorities when making managerial decisions to support social innovation; they can also be useful for further studies within the framework of the issues under consideration.

Regions of the North-West of Russia: Analysis of the Conditions for the Implementation of Social Innovation

Introduction. International experience shows that social innovation is an important tool for regional development, although this type of innovation is a relatively new phenomenon for Russia. On the basis of the research conducted, the article analyzes the conditions for the implementation of social innovation which has a significant potential to meet the challenges of territorial development. Materials and Methods. Based on materials from open sources, as well as on an expert survey conducted by the Vologda Research Center of the Russian Academy of Sciences with the direct participation of the author, the conditions for the implementation of social innovation prevailing in the constituent entities of the Northwestern Federal District of the Russian Federation were analyzed in the context of legal, infrastructural, economic, and socio-cultural components. Using the results of the expert survey, a quantitative assessment of the level of development of the conditions for the implementation of social innovation was given. The main barriers preventing the reproduction of social innovation within the territory under consideration were revealed. Results. The study has revealed that in the regions of the Northwestern Federal District the conditions for the implementation of social innovation are at the stage of active development: infrastructure and legislation are being formed; financial, tax and property support is being provided; educational programs are being implemented. The study has also shown that there are a number of problematic aspects associated with the underdevelopment of the regulatory framework, with the lack of Centers for innovation in the social sphere in a number of constituent entities, with the limited availability of some financial instruments, with low social and innovative activity of people, etc. Discussion and Conclusion. The results obtained are supported by other studies, which substantiates the need for policy adjustment towards improving the relevant regulatory framework, economic conditions, infrastructure, and socio-cultural environment. The research materials can be used by regional authorities when making managerial decisions to support social innovation; they can also be useful for further studies within the framework of the issues under consideration.

Effectiveness of Tax Policies in Corporate Restructuring: Evidence from China

ABSTRACT As an international practice, tax policies generally provide the required support to corporate restructuring. Accordingly, we used the regression discontinuity approach to analyze and evaluate the effectiveness of China’s tax policies in corporate restructuring in recent years. The study results revealed that developing policies in a targeted manner can promote corporate restructuring. Furthermore, the development of policies in China in 2014 has resulted in a compound effect. Therefore, the Chinese government may consider further improving the tax support for corporate restructuring through the following strategies: lowering the threshold for applying restructuring tax incentives, improving the design of restructuring tax policies, improving tax services, and strengthening tax supervision of high-risk restructuring issues.

Public support for local adaptation policy: The role of social-psychological factors, perceived climatic stimuli, and social structural characteristics

Climate change presents serious risks to human communities around the world. To ensure rapid, widespread and equitable adaptation to these risks, government policy must be enacted to support community-wide adaptation. Public support for adaptation policy will be key to its passage. To date, few studies have focused on what factors motivate public support for adaptation policy, especially at the subnational level. To address these gaps, we develop a conceptual model that draws on and synthesizes past conceptual frameworks and literature related to environmental behavior and adaptation specifically. Using structural equation modeling with latent variables, we examine this model, drawing on data from a statewide survey of over 2700 individuals from the state of Indiana in the Midwestern United States. We assess the drivers of two distinct measures of policy support: support for climate adaptation policy and support for climate adaptation taxes. We find that threat appraisal, climate risk perception, perceived efficacy of government, respondent’s climate change beliefs, perceived descriptive and dynamic norms around policy support, and social structural characteristics such as political affiliation are important drivers of support for adaptation policy, but that their effects differ across our two outcome measures. These findings point to opportunities to better engage the public in policy discourse, while also suggesting that distinct motivations shape support for policy compared to the taxes likely needed to support these new programs.

Податкове стимулювання НДДКР у контексті розширення фіскального простору

The article deals with the main R&D expenditure based tax incentives such as tax credit and enhanced allowances in the context of the development of fiscal space due to their impact on innovative activities of loss-making, small and medium enterprises as well as startups. The author disclosed basic features of R&D expenditure based tax incentives in comparison with tax exemptions and accelerated depreciation. Cross-country comparisons in OECD revealed that it is often a case when SMEs and startups enjoy R&D tax credit and enhanced allowance with higher rates. In addition, they can also claim full reimbursement of unused tax benefits for R&D while large companies can only count on partial or even non-reimbursement of unused tax benefits and limited carry over period. Implied tax subsidy rates on R&D are analyzed through different OECD countries, as well as through enterprises different in size and profitability. In 2019 the largest R&D tax benefits were offered to profitable SMEs in France (ITSR was 43%) and Portugal (ITSR was 39%). The ITSR methodology is used to work out scenarios of introduction of R&D expenditure -based tax incentives in Ukraine. Calculation results are presented. The state of R&D tax incentives in Ukraine in the case of aircraft industry is analyzed. The introduction R&D expenditure -based tax incentives is argued as a replacement of tax exemptions which are currently used as a measure for R&D promotion in the aircraft industry in Ukraine in terms of improvement of R&D tax support efficiency and spur successful development of high value-added industries as an important prerequisite for the development of fiscal space in Ukraine.

Analysis of Public Testimony About Philadelphia's Sweetened Beverage Tax

Although interest in beverage taxes has increased in recent years, industry opposition and other challenges have limited their spread in the U.S. Because beverage tax proposals are often unsuccessful, there is limited empirical evidence to inform advocacy efforts. Philadelphia's 1.5 cent-per-ounce tax on sweetened beverages provides an opportunity to understand how public testimony for and against the tax was framed in a city that ultimately passed the policy. A content analysis of all public testimony about the beverage tax presented to the Philadelphia City Council in 2016 was conducted. Testimonies were coded for policy stance (protax or antitax), speaker type, and specific protax or antitax arguments. Quantitative data were analyzed in 2018-2019 using chi-square tests. A total of 177 unique testimonies were identified, which included 40 protax arguments (grouped into 11 themes) and 31 antitax arguments (grouped into 10 themes). Most testimonies were delivered orally, and most speakers argued in favor of the tax (58%). Among tax supporters, funding early childhood education was the most common argument (71%), whereas tax opponents most frequently argued that sugar-sweetened beverages were the wrong target for the tax (50%). This analysis of public testimony revealed that protax advocacy efforts highlighted the revenue benefits for early childhood education and community infrastructure rather than the tax's potential to reduce sweetened beverage consumption and improve health. By contrast, antitax arguments centered on the unfairness of targeting a single industry, potential negative economic impacts, and the perceived lack of evidence that the tax would influence consumer behavior.