Showing papers on "Tax reform published in 1977"
TL;DR: In this paper, the authors derive normative tax rules based on the constitutional calculus of the typical voter-taxpayer when he predicts that post-constitutional political processes will be dominated by a budget-maximizing Leviathan-like bureaucracy.
429 citations
TL;DR: The authors showed that the tax on pure land rents is at least partly shifted, and that the price of land may be increased by the imposition of a tax on the land The authors.
Abstract: The classic example of an unshiftable tax is the general tax on pure rental income. Since Ricardo, economists have believed that the annual net rental income of unimproved land falls by the amount of the annual tax and its price by the capitalized value of this tax. This paper shows that these conclusions are false, that the tax on pure land rents is at least partly shifted, and that the price of land may be increased by the imposition of a tax. Implications are suggested for the analysis of the corporate income tax and the taxation of natural resources.
197 citations
159 citations
TL;DR: In this article, the authors discuss the tax treatment of the family unit from both equity and efficiency points of view, focusing on the economic criterion for efficient taxation, and argue that the tax system might become both more fair and efficient if adult individuals, rather than families, were the units of taxation.
Abstract: This paper discusses the federal income tax treatment of the family unit from both equity and efficiency points of view. Special attention is focused upon the economic criterion for efficient taxation. It is argued that the tax system might become both more fair and efficient if adult individuals , rather than families, were the units of taxation.
84 citations
TL;DR: In this article, the authors integrate the theories of income tax evasion with the conventional theories of labor supply, and the results are summarized in Section IV, where the effects of different parameter changes on labor supply and on undeclared income are calculated.
Abstract: Recently, a number of economists have applied the modern theory of choice under risk to the study of criminal activities. The important work of Becker (1968) has led to a number of contributions; see for example Brown & Reynolds (1973), Ehrlich (1973), Sjoquist (1973) and Block & Heineke (1975). Some studies have focused on income tax evasion as a criminal activity, e.g. Allingham & Sandmo (1972), Kolm (1973), Singh (1973) and Srinivason (1973). A number of works have also stressed the importance of uncertainty for labor supply decisions; see for example Block & Heineke (1973) and Hartley & Revankar (1974). The purpose of this note is to integrate the theories of income tax evasion with the conventional theories of labor supply. The model we use for this purpose is considered in Section II. In Section III the effects of different parameter changes on labor supply and on undeclared income are calculated and interpreted. The results are summarized in Section IV.
75 citations
TL;DR: In this article, the authors derived optimal tax formulae and optimal tax rates for the case where there are many consumers, an income tax is impossible and the government has to trade off efficiency in order to improve the real distribution of income.
71 citations
01 Jan 1977
TL;DR: For a transitory tax change such as an income tax rebate to accomplish its purpose, it should produce a large response in consumption per dollar of tax revenue lost by the government, and this response should be concentrated in a short time span following the tax reduction as mentioned in this paper.
Abstract: IN THE COURSE of the last decade, temporary changes in federal incometax liabilities have become a major tool of macroeconomic policy. The chief episodes so far have been the temporary surcharge of 1968-70 and the tax rebate of 1975. Another rebate was proposed by the Carter administration in early 1977 but was subsequently withdrawn. There has been a lively debate and wide disagreement in the economics profession about the efficacy of short-run changes in personal taxes as a device to stimulate aggregate demand and output. Transitory tax changes are advocated on the grounds that they can provide a prompt and temporary stimulus or restraint to the economy when it is needed and when permanent or longer-acting changes are not desirable because the structure of tax rates is deemed appropriate for the longer run. For a transitory tax change such as an income-tax rebate to accomplish its purpose, it should produce a large response in consumption per dollar of tax revenue lost by the government, and this response should be concentrated in a short time span following the tax reduction. Economists working in the tradition of the permanent-income and life-
70 citations
Posted Content•
65 citations
TL;DR: This article reviewed the theory, empirical evidence, and policy implications of viewing a charitable donation in Canada as a "good" whose price is dependent on the provisions of the Income Tax Act.
Abstract: Economic determinants of individual charitable donations in Canada. This paper reviews the theory, empirical evidence, and policy implications of viewing a charitable donation in Canada as a 'good' whose price is dependent on the provisions of the Income Tax Act. Tax data for the period 1968 to 1973 confirm that itemized donations respond to their implicit price, to total income, and to income from wealth. The 1971 tax reform may have decreased the propensity of Canadians to donate to charity. Four options for income tax reform as it affects charitable donations were examined: 125 per cent deductability, tax credits, matching grants, and abolition of the 'standard' $100 exemption. Matching grants seem to be the least-cost method for governments to transfer revenues to private charities.
57 citations
TL;DR: In this paper, a formal model of an economy consisting of many production centres, each of which levies property taxes at a different rate, is developed and analyzed, and it is shown that holders of capital may have either a positive or negative willingness to pay for a heterogenous system of taxes relative to a uniform tax which raises the same revenue.
31 citations
TL;DR: In this article, the authors explored the economic effects of two alternative proposals for corporate tax integration: complete integration and a partial integration method that keeps the tax burden on corporate income unchanged, arguing that either proposal would be desirable because of the favorable effects on the efficiency of the capital markets.
Abstract: This paper explores some of the economic effects of two alternative proposals for corporate tax integration : complete integration and a partial integration method that keeps the tax burden on corporate income unchanged. We argue that either proposal would be desirable because of the favorable effects on the efficiency of the capital markets. Complete integration would have greater benefits than partial integration , particularly with respect to the allocation of consumption over time and of capital between corporate and noncorporate activities. Microeconomic simulations using the TAXSIM model and the 1973 Treasury Tax File show that either form of integration would reduce taxes relatively more for low income individuals and would actually raise taxes for high income individuals.
TL;DR: In this article, it is shown that because of the treatment of personal interest receipts and payments under the progressive U.S. individual income tax, there is reason for low-income persons to prefer bond-financed tax postponement, while higher-income people have reason to oppose government borrowing.
Abstract: This paper adds to the small stock of existing literature on the determinants of individual preferences regarding tax postponement via government borrowing. It is shown that because of the treatment of personal interest receipts and payments under the progressive U.S. individual income tax, there is reason for low-income persons to prefer bond-financed tax postponement, while higher-income persons have reason to oppose government borrowing. Since the income level separating the groups with opposing preferences depends on both interest rate ratios and the income tax rate structure, it is possible to predict the effect of tax reforms, inflation, and political reforms upon the quantity of government borrowing and the interest rates which apply to it.
TL;DR: In this article, the authors give a short description of the tax reform proposals and background developments that led to them and concentrates on those items which may be of more general interest, such as the design of income tax systems under rapid inflation, the combination of tax and transfer systems, and the political economy of introducing tax reform in a democratic society.
Journal Article•
TL;DR: The authors discusses the role of speculation in real estate markets and the general effects of the tax on this speculation, and analyzes the effects of tax on various classes of real estate, and Section 4 considers the implications of tax for the degree of concentration in the construction industry and in the ownership of residential investment property.
Abstract: housing prices" by discouraging speculation, and to "recover for the public a major share of windfall gains from land speculation."''3 The paper begins with a summary of the major features of the tax (Section 1). Section 2 discusses the role of speculation in real estate markets and the general effects of the tax on this speculation. Section 3 analyzes the effects of the tax on various classes of real estate, and Section 4 considers the implications of the tax for the degree of concentration in the construction industry and in the ownership of residential investment property. Section 5 summarizes the major findings of the analysis and considers their policy implications.
TL;DR: In this paper, a tax discrepancy coefficient has been worked out in order to establish, given a constant tax yield, what bigger or smaller amounts taxpayers would have to pay if tax evasion or tax expenditures were completely eliminated.
TL;DR: In this article, the tax system favors money donations compared to in-kind labor donations, where, henceforth, "money" includes asset donations, and the authors focus on the allocative effect of tax system.
Abstract: and "money" (where, henceforth, "money" includes asset donations) will be considered Our focus is timely since several proposals to extend or to alter the current tax provisions relating to charitable contributions have recently been suggested Baird (1972, p 443), among many, has argued that itemized deductions should be allowed for professional services donated free to groups serving particularly pressing national needs: "There is no compelling reason to differentiate between absentee charity based on the transfer of money or property and the donation of professional time and talent" The argument is that the current tax system favors money donations compared to in-kind labor donations As an indication of the administrative feasibility of his proposal, Baird cites the experience of legal aid societies in keeping records of privately donated lawyer hours to support OEO funding Another extension of current laws recently proposed (in several forms) is the inclusion of the value of blood donations, an in-kind service, in the class of deductible contributions2 A number of other proposals to alter or eliminate the personal income tax deductibility of cash contributions has also been made Herein, these last proposals will be ignored in order to concentrate on the allocative effect of the tax system
01 Jan 1977
TL;DR: The authors explored the subject of tax audit and tax evasion in Malaysian taxation environment from the perception of tax practitioners using questionnaire method as a basis, and investigated on the extent of taxpayers' awareness toward their obligation under the self assessment system (SAS).
Abstract: Although the essence of tax audit is to promote voluntary compliance, tax practitioners’ need to understand its meaning and further eliminate intentional noncompliance. In this study, we explore the subject of tax audit and tax evasion in Malaysian taxation environment from the perception of tax practitioners. Using questionnaire method as a basis, we could investigate on the extent of taxpayers’ awareness toward their obligation under the self assessment system (SAS), draw out their experience in tax audits, discover a general method to effectively prevent tax evasion and assess taxpayers’ knowledge on identifying tax evasion transaction. Our study would have an implication for the Inland Revenue Board of Malaysia (IRBM) as it reflects the true phenomenon in Malaysia after the implementation of SAS through the responses gathered from business taxpayers and the tax paying public. It can serve as an indicator for future development of tax compliance in Malaysia.
TL;DR: In this paper, the effect of corporate financing policy under the imputation, dual-rate, mixed and classical tax systems was analyzed and conditions for neutrality of the systems with respect to financing policy-neutrality in the sense that no type of financial policy has favorable tax treatment.
Abstract: The different tax systems of European illustrate the variety of ways in which the double taxation of dividends can be reduced. This paper analyses the effect of corporate financing policy under the imputation, dual rate, mixed and classical tax systems, and derives conditions for neutrality of the systems with respect to financing policy-neutrality in the sense that no type of financial policy has favourable tax treatment. The effect of the capital gains tax and heterogenous personal tax rates across individuals are analysed by using a model of stock value. Neutrality depend on the parameters of the tax system and a weighted average of personal tax rates.
TL;DR: In this article, a general equilibrium model of interregional tax incidence is proposed, which is characterized by the assumption that labor is perfectly immobile between different jurisdictions, and a new method of conducting a comparative static analysis on the current issue is developed.
TL;DR: In this article, tax effects of corporate social responsibility decisions should be incorporated into the various approaches for performing social audits or accounting for social performance, identifying some special U.S. tax provisions which encourage corporate participations in social responsibilities.
Abstract: Tax effects of corporate social responsibility decisions should be incorporated into the various approaches for performing social audits or accounting for social performance. This paper identifies some special U.S. tax provisions which encourage corporate participations in social responsibilities. The Linowes' socio-economic accounting model is revised to show tax costs.
Posted Content•
TL;DR: The conventional wisdom is that market value universally (or nearly so) is the value concept to which assessed values are to be tied, that... as mentioned in this paper, but the literature obscures important interjurisdictional differences in property tax structure.
Abstract: The property tax literature obscures important inter-jurisdictional differences in property tax structure. The conventional wisdom is that market value universally (or nearly so) is the value concept to which assessed values are to be tied, that ...
TL;DR: In this paper, the authors present a supergame based approach to the tax harmonization problem in the form of a Prisoner's Dilemma supergame, with equilibrium cooperative solutions for this game which do not need higher authorities to enforce them.
Abstract: Multinational corporations can play off host governments to minimise their tax payments in the absence of internationally coordinated fiscal policies. Without a supranational enforcement agency, most tax harmonization policies are unstable because one or another signatory always has an incentive to break ranks. This produces a sub-optimal tax harvest for a group of host governments taken as a whole. This is a collective action problem for host governments which can be stated in the form of a Prisoner's Dilemma supergame. Equilibrium cooperative solutions have been suggested for this game which do not need higher authorities to enforce them. The application of these solutions to the host governments’ tax problem is discussed, with the conclusion that under certain conditions self-policing tax harmonization agreements are possible.
TL;DR: In this article, the incidence of the tax system upon households below a predetermined poverty line, with special emphasis on the rural poor, was studied and it was shown that expenditure policy is more effective than tax policy in significantly improving the relative position of the poor.
Abstract: The paper is a study of the incidence of the tax system upon households below a predetermined poverty line, with special emphasis on the rural poor. Com-paring households below the poverty line to above it, it finds the federal tax system of Malaysia to be progressive. But since the poor pay only a small fraction of total taxes, it finds limited scope for an effective tax policy to improve the economic conditions of the rural poor. It, therefore, corroborates the by now widely held view that expenditure policy is more effective than tax policy in significantly improving the relative position of the poor.
Book•
01 Jan 1977
TL;DR: This article developed and tested hypotheses relating to the constancy of the income elasticities of individual taxes levied by the State of Louisiana and of its aggregate tax structure. But they did not make any mention of the possibility of changing income elasticity or assumed them constant.
Abstract: The primary aim of this dissertation was to develop and test hypotheses relating to the constancy of the Income elasticities of Individual taxes levied by the State of Louisiana and of Its aggregate tax structure. These hypotheses were then Incorporated Into ordinary least squares regressions to provide long-run forecasts of tax revenues. The earliest researchers on the subject of fore casting state tax receipts by use of the elasticities approach either made no mention of the possibility of changing income elasticities or assumed them constant. Dockel, and Legler and Papke, reached conclusions Inconsis tent with their assumptions of constant elasticities. Singer utilized dummy variables to allow for shifting in Income elasticities due to changes in tax rates, bases, or administration. Wilford explicitly labelled his elasticity coefficients as averages for the time series studied. Richardson was the first to make explicit a cause of the phenomenon of Increasing Income elasticity of a tax struc ture, which was that the relatively more elastic taxes grew faster over time than the less elastic taxes, and hence acquired greater weights In the determination of average Income elasticity of the tax structure.