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Lifestyle taxes in the presence of profit shifting

Levaggi, Rosella; Marchiori, Carmen; Panteghini, Paolo - 2020

Non-communicable diseases (NCDs) cause about 71% of all deaths globally and a considerable increase in health care costs. To tackle this problem, several Governments have designed "sin taxes", i.e, extra payments related to the quantity of unhealthy contents of specific goods. However, unhealthy...

Persistent link: https://www.econbiz.de/10012174697

Optimal taxation of capital income with heterogeneous rates of return

Gerritsen, Aart; Jacobs, Bas; Rusu, Alexandra V.; … - 2020

There is increasing empirical evidence that people systematically differ in their rates of return on capital. We derive optimal non-linear taxes on labor and capital income in the presence of such return heterogeneity. We allow for two distinct reasons why returns are heterogeneous: because...

Persistent link: https://www.econbiz.de/10012238502

Redistributive capital taxation revisited

Kina, Özlem; Slavík, Ctirad; Yazici, Hakki - 2020

This paper shows that capital-skill complementarity provides a quantitatively significant rationale to tax capital for redistributive governments. The optimal capital income tax rate is 60%, which is significantly higher than the optimal rate of 48% in an identically calibrated model without...

Persistent link: https://www.econbiz.de/10012299800

The optimal taxation of risky capital income : the Rate of Return Allowance

Spiritus, Kevin; Boadway, Robin W. - 2017

We study the optimality of taxing capital income according to a Rate-of-Return Allowance proposed by the Mirrlees Review. In a mean-variance framework the optimal tax on risk-free returns is zero with constant returns to scale in private investment, but positive with decreasing returns to scale,...

Persistent link: https://www.econbiz.de/10011588034

Petchey's (2015) extension of oates & Schwab's (1988) efficiency result revisited

Eichner, Thomas; Pethig, Rüdiger - 2017

Oates and Schwab (1988) consider an economy with mobil capital and jurisdictions that suffer from local pollution. They show that welfare-maximizing jurisdictions implement the first-best, if they take prices as given and have at their disposal a capital tax and an environmental standard....

Persistent link: https://www.econbiz.de/10011597738

Macroeconomic effects of capital tax rate changes

Bhattarai, Saroj; Lee, Jae Won; Park, Woong-yong; Yang, … - 2019

We study aggregate, distributional, and welfare effects of a permanent reduction in the capital tax rate in a dynamic equilibrium model with capital-skill complementarity. Such a tax reform leads to expansionary long-run aggregate effects, but is coupled with an increase in the skill premium....

Persistent link: https://www.econbiz.de/10012002979

Salience of inherited wealth and the support for inheritance taxation

Bastani, Spencer; Waldenström, Daniel - 2019

We study how attitudes to inheritance taxation are influenced by information about the role of inherited wealth in society. Using a randomized experiment in a register-linked Swedish survey, we find that informing individuals about the large aggregate importance of inherited wealth and its link...

Persistent link: https://www.econbiz.de/10011966731

Tax competition and the efficiency of "benefit-related" business taxes

Gugl, Elisabeth; Zodrow, George R. - 2015

We consider a model in which business public services must be financed with either a source-based tax on mobile capital, such as a property tax, or a tax on production, such as an origin-based VAT and assess which of the two tax instruments is more efficient. In general, both a capital tax and a...

Persistent link: https://www.econbiz.de/10011350213

How will Brexit affect tax competition and tax harmonization? : the role of discriminatory taxation

Fuest, Clemens; Sultan, Samina - 2017

This paper develops a model of tax competition with three countries, which initially form a union where countries refrain from using different tax rates in different sectors of the economy. We study the impact of one country leaving the union. We show that the introduction of discriminatory...

Persistent link: https://www.econbiz.de/10011780535

Switching from worldwide to territorial taxation : empirical evidence of FDI effects

Büttner, Thiess; Holzmann, Carolin - 2019

the importance of the actual tax rate. For Japan, which charges a higher tax rate on corporate profits than Germany, we … find a substantial increase of FDI in Germany after the switch from worldwide to territorial taxation. For the UK, which … imposes a lower tax rate than Germany, the switch to territorial taxation is not found to exert any significant effects on …

Persistent link: https://www.econbiz.de/10011958845