There are substantial differences in output per worker across states that have persisted over time.  This study demonstrates that in the context of a neoclassical growth model, differences in marginal tax rates on income from capital investment, capital ownership, and consumption will lead to...

GST as introduced in India being a destination based tax, does not encourage regions to vigorously promote manufacturing and tradable services industries. Being in the midst of its economic transformation, and given the subnational character of most states (regions), it is important that the...

German municipalities have substantial autonomy in setting taxes on two distinct tax bases: business profits and property values. We use this setting and a two-step approach to explore whether implemented tax policy is consistent with the seminal inverse-elasticity rule. First, we estimate the...

This paper seeks to produce evidence on the labor incidence of the taxation of machinery and equipment purchases by manufacturers under the state general sales tax. For the identification strategy, we exploit tax policy discontinuities among adjacent counties along state borders. The main...

The paper provides a framework for designing international tax rules by outlining the various behavioral margins they apply to. It then goes on to analyze three specific policy issues in terms of preserving the neutrality of choices along the relevant margins: (1) Which foreign taxes should be...

Value Added Tax (VAT) is a type of indirect tax that is imposed on goods and services. In one of the most important reforms of the country’s public finances in over the past 50 years, India has finally launched much delayed Value Added Tax (VAT) from 1st April, 2005 in 21 states. VAT has...

The reason for extending the Value Added Tax (VAT) to the services sector in China is not sufficiently powerful. Just looking at the services sector, substituting the sales tax with a VAT gives rise to many difficulties in terms of system design and implementation, and the possible problems may...

In this paper, the relationship between VAT base-expansion and intergovernmental financial relations is discussed from the perspective of the dual processes of industrialisation and urbanisation.First, this article theoretically analyses the VAT base-expansion and its real world implications and...

Along with the official replacing of Business Tax with value-added Tax (VAT) for some business sectors in Shanghai's pilot zone, the issue of VAT reform has attracted widespread attention from the public. This paper will first outline the basic concept of VAT, and then briefly elaborate on the...

Fears that the movement to GST would add to inflation have been unfounded. In this study we ex-ante estimate the impact the movement to GST would have on inflation and show that it would be very marginal at best. The inflation argument to have multiple rates is therefore weak. The impact on the...