This aims to provide a perspective on the ideal tax system, using insights from optimal-tax theory supplemented with empirical evidence. These insights are applied to actual policy questions regarding the progressiveness of the labor-income tax, in-work tax credits, the design of the...

The German 2008 corporate tax reform followed the distinct and internationally prevalent pattern of tax-rate cut cum base broadening. Based on a new corporate microsimulation model, ZEW TaxCoMM, we assess the heterogeneous effects of the tax reform on firms, varying according to some of the...

Some noncompliant taxpayers fall outside the reach of third-party withholding and reporting. Revenue agencies may use enforcement and/or prosocial strategies to encourage compliance among such taxpayers. Revenue agencies should stand ready to use narrative as part of these efforts, despite...

We examine the effects of taxation on financing policy using the corporate tax reform in 2001 in Croatia as a quasi-natural experiment. Since the extant literature on tax effects on capital structure studies listed firms in developed countries, it is worth investigating whether the same results...

We investigate competition for FDI within a region when a foreign multinational firm can profitably exploit differences in statutory corporate tax rates by shifting taxable profits to lower-tax jurisdictions. In such a framework we show that targeted tax competition may lead to higher welfare...

This essay critically revisits the roles and influences of tax havens in the world economy. It combines various messages of available studies in one scheme, and uses various data sources to document regularities regarding multinational firms, financial assets, and other relevant information for...

This paper contributes to the literature providing indirect evidence for profit shifting within multinational companies. In contrast to the previous studies, we take account of the tax responsiveness of the capital stock and analyze the effect of corporate taxes on both pre- and posttax...

The European Commission is evaluating the performance of the common VAT, which has many shortcomings. The numerous exemptions and differentiated rate structures violate the logic and functionality of the VAT. The exemptions distort input choices and outsourcing policies. Reduced rates are...

Full movement from the destination principle to the origin principle would lead to changes in VAT revenues in EU countries. Hence a clearing mechanism is necessary to rectify such imbalances. To estimate the relevance of VAT evasion this study quantifies the annual amounts of hypothetical VAT...

This paper analyzes effects of an equalization tax on the decisions of a multinational company. An equalization tax is an extra corporation tax on dividend distributions to ensure that the underlying profit of a dividend has borne a tax in the corporate sector equal to the imputation credit...