http://repub.eur.nl/res/concept/jel-H2/ Recent publications classified by JEL Code H2 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/38197/ 2012-10-24T00:00:00Z This paper develops a general-equilibrium model of skill-biased technological change that approximates the observed shifts in the shares of wage and non-wage income going to the top decile of U.S. households since 1980. Under realistic assumptions, we find that all agents can benefit from the technology change, provided that the observed rise in redistributive transfers over this period is taken into account. We show that the increase in capital’s share of total income and the presence of capital-entrepreneurial skill complementarity are two key features that help support the wages of ordinary workers as the new technology diffuses Lansing, K.J. Markiewicz, A. http://repub.eur.nl/res/pub/38196/ 2012-10-02T00:00:00Z This paper analytically derives the conditions under which the slope of the tax reaction function is negative in a classical tax competition model. If countries maximize welfare, we show that a negative slope (reflecting strategic substitutability) occurs under relatively mild conditions. Simulations suggest that strategic substitutability occurs under plausible parameter configurations. The strategic tax response is crucial for understanding tax competition games, as well as for assessing the welfare effects of partial tax unions (whereby a subset of countries coordinate their tax rates). Indeed, contrary to earlier findings that have assumed strategic complementarity in tax rates, we show that partial tax unions might reduce welfare under strategic substitutability. Mooij, R.A. de Vrijburg, H. http://repub.eur.nl/res/pub/32975/ 2011-10-25T00:00:00Z In this article, the author examines, through examples, the effects of Member States subjecting taxpayers to unlimited income taxation whilst granting double tax relief under a Netherlands-style tax exemption from the perspective of how such an approach would affect the cross-border taxation of intra-firm transactions. Wilde, M.F. de http://repub.eur.nl/res/pub/32974/ 2011-09-11T00:00:00Z An analysis of the key issues to eliminate double taxation of business income in the Netherlands Wilde, M.F. de Janssen, G.T.W. http://repub.eur.nl/res/pub/32976/ 2011-07-20T00:00:00Z The author, in this article, examines, through examples, the effects of Member States subjecting taxpayers to unlimited income taxation whilst granting double tax relief under a Netherlands-style tax exemption with regard to how such an approach would affect the cross-border taxation of currency exchange results. Wilde, M.F. de http://repub.eur.nl/res/pub/32969/ 2010-08-01T00:00:00Z On February 25, 2010, the Court of Justice rendered its decision in the X Holding case.2 The Court ruled that the Dutch tax consolidation regime is compatible with the freedom of establishment. The territoriality principle justifies the limitations on the regime’s scope of application in an intra-EU context. With its ruling, the Court basically followed the opinion of Advocate General (hereinafter: ‘AG’) Kokott, she delivered on November 19, 2009. Kokott advocated the position that the Dutch tax consolidation regime may generally be regarded as being compatible with the freedom of establishment (at least to the extent that it entails that an aggregation of current business profits and losses realized by resident and non-resident group companies is impossible). Accordingly, today, it seems clear that the Dutch tax consolidation regime in its current design may be kept in place. However, the Court of Justice did not provide a clear answer to the underlying question of how the proportionality test should be interpreted under primary EU law where EU Member States (hereinafter: ‘EU MSs’) raise the territoriality principle as a justification for an obstacle imposed. In this article, I address the question of how the proportionality test should be interpreted in this respect. Wilde, M.F. de http://repub.eur.nl/res/pub/17829/ 2009-12-31T00:00:00Z This paper analyzes enhanced cooperation agreements in corporate taxation in a three country tax competition model where countries differ in size. We characterize equilibrium tax rates and the optimal tax responses due to the formation of an enhanced cooperation agreement. Conditions for strategic complementarity or strategic substitutability of tax rates are crucial for the welfare effects of enhanced cooperation. Simulations show that enhanced cooperation is unlikely to be feasible for small countries. When enhanced cooperation is feasible, it may hamper global harmonization. Only when countries are of similar size is global harmonization a feasible outcome. Vrijburg, H. Mooij, R.A. de http://repub.eur.nl/res/pub/14785/ 2008-12-04T00:00:00Z Hundreds of millions of electrical and electronic appliances are manufactured every year. Furthermore, it is expected that this number will not substantially decrease in the near future. These equipments have a significant impact on the environment, and ceteris paribus, such environmental impact increases with the number of appliances manufactured. Consumers, NGOs and Governments have acknowledged the potential threat posed by these electrical and electronic products. They have systematically demanded companies to reduce the environmental impact caused be their products and services. Companies have responded to these pressures and have engaged in a number of environmentally friendly initiatives. This thesis is motivated by the task of reducing the environmental impact caused by the myriad of electrical and electronic products that make our lives more conformable and enjoyable. More specifically, it addresses the challenge of efficiently and effectively mitigating such impacts. We show that companies will need a mixture of strategies to respond to this challenge. Furthermore, we show that these strategies must consider environmental, technical and marketing aspects of the business of electrical and electronic products. These three aspects need to be considered systemically, and the solutions will vary greatly according to the companies, the products they manufacture, and the ways in which their supply chains are organized. Quariguasi Frota Neto, J. http://repub.eur.nl/res/pub/14438/ 2008-12-01T00:00:00Z This paper proposes a …first step towards a positive theory of tax instruments. We present a model that extends models of redistributive politics by Myerson (1993) and Lizzeri and Persico (2001). Two politicians compete in terms of targeted redistributive promises …nanced through distortionary taxes. We solve for the case of both targetable and non-targetable taxes. We prove that there is an imperfect efficiency-targetability trade off on the tax side. Politicians prefer targetable taxes over non-targetable ones, especially when the latter are less efficient. Yet, targetable taxation is always used even when it is very inefficient compared to non-targetable taxes. Crutzen, B.S.Y. Sahuguet, N. http://repub.eur.nl/res/pub/14202/ 2008-11-24T00:00:00Z Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological advances in controlling the socially undesirable activities. We show that the policy maker may want to commit to her policy. The reason is that asymmetric information about adoption costs induces the policy maker to set subsidy levels that increase over time; firms, expecting higher subsidies in the future, postpone investment. Direct regulation offers a commitment possibility that allows to prevent firms from postponing investment. Ossokina, I.V. Swank, O.H. http://repub.eur.nl/res/pub/17476/ 2008-03-01T00:00:00Z We estimate the distributional incidence of health care financing in 13 Asian territories that account for 55% of the Asian population. In all territories, higher-income households contribute more to the financing of health care. The better-off contribute more as a proportion of ability to pay in most low- and lower-middle-income territories. Health care financing is slightly regressive in three high-income economies with universal social insurance. Direct taxation is the most progressive source of finance and is most so in poorer economies. In universal systems, social insurance is proportional to regressive. In high-income economies, the out-of-pocket (OOP) payments are proportional or regressive while in low-income economies the better-off spend relatively more OOP. But in most low-/middle-income countries, the better-off not only pay more, they also get more health care. O'Donnell, O.A. Doorslaer, E.K.A. van Racelis, R. Tin, K. Rannan-Eliya, R.P. Tisayaticom, K. Trisnantoro, L. Wan, Q. Yang, B-M. Zhao, Y. Somanathan, A. Adhikari, S.R. Huq, M.N. Akkazieva, B. Harbianto, D. Garg, C.C. Hanvoravongchai, P. Herrin, A.N. Ibragimova, S. Karan, A. Kwon, S-M. Leung, G.M. Lu, J-F.R. Ohkusa, Y. Pande, B.R. http://repub.eur.nl/res/pub/11769/ 2008-02-01T00:00:00Z European governments aim to raise labour supply, cut unemployment and, at the same time, maintain social cohesion. Yet, economists have stressed the trade-off between these objectives. This paper reviews the key policy insights from optimal tax theory to identify options for reform in the tax-benefit system that can potentially improve the equity-efficiency trade-off. Using a comprehensive applied general equilibrium model, we then explore whether reforms along these lines in the Dutch tax-benefit system raise employment without sacrificing equality. The analysis reveals that selective tax relief for elastic secondary earners and low-skilled workers have this potential. A flat income tax structure, possibly combined with a negative income tax, worsens the equity-efficiency trade-off. Mooij, R.A. de http://repub.eur.nl/res/pub/17584/ 2008-01-01T00:00:00Z This paper explores how the specification of the earnings function impacts the optimal tax treatment of human capital. If education is complementary to labor effort, education should be subsidized to offset tax distortions on labor supply. However, if most of the education is enjoyed by high ability households, education should be taxed in order to redistribute resources to the poor. The paper identifies the exact conditions under which these two effects cancel and education should be neither taxed nor subsidized. In particular, with non-linear tax instruments, education should be weakly separable from labor and ability in the earnings function. With linear taxes, education should also feature a constant elasticity in a weakly separable earnings function. Jacobs, B. Bovenberg, A.L. http://repub.eur.nl/res/pub/10750/ 2007-10-25T00:00:00Z We evaluate the impact of technology adoption subsidies on in- vestment behavior in an individual choice experiment. In a laboratory setting professional managers are confronted with an intertemporal decision problem in which they have to decide whether or not to search for, and possibly adopt, a new technology. Technologies differ in the per-period benefits they yield, and their purchase price increases with the per-period benefits provided. We introduce a subsidy on the more expensive technologies (that also yield the larger per-period benefits), and find that the subsidy scheme induces agents to search for and adopt these more expensive technologies even though the subsidy itself is too small to render these technologies profitable. We speculate that the result is driven by the positive connotation (affect) that the concept 'subsidy' invokes. Heijden, E.C.M. van der Potters, J.J.M. Soest, D.P. van Vollebergh, H.R.J. Aalbers, R.F.T. http://repub.eur.nl/res/pub/10677/ 2007-09-24T00:00:00Z The European Commission favours the introduction of a consolidated corporate tax base to overcome the distortions arising from the existing system of separate accounting. The blueprints for consolidation are simulated with the applied general equilibrium model CORTAX. We show that the benefits of a common consolidated tax base are limited due to two weaknesses. Formula apportionment, which is needed to allocate the consolidated taxable profits across jurisdictions, creates for MNEs new tax planning possibilities to exploit tax rate differentials in the European Union. In addition, it triggers tax competition as the incentives for member states to attract foreign investment by reducing their tax rates are enforced. The second weakness arises from the unlevel playing field, which is introduced if only part of the firms chooses to participate in the consolidation. The gains from consolidation can be fully grasped if it is obliged for all firms and accompanied by harmonisation of the tax rate. Horst, A. van der Bettendorf, L.J.H. Rojas-Romagosa, H. http://repub.eur.nl/res/pub/10502/ 2007-09-04T00:00:00Z Het belastingsysteem is een van de beste startpunten voor een onderzoek naar China's transitie omdat de transformatie van een maatschappij altijd gepaard gaat met snelle veranderingen in het oude fiscale regime. Dit boek ziet de centrale overheid, lokale overheden en ondernemingen als de drie grote spelers en laat zien dat interactie tussen deze drie spelers heeft geleid tot China's unieke, "centraal-lokaal tweesporige" belastingsysteem. De centrale overheid mobiliseert lokale overheden door fiscale decentralisatie, wat resulteert in toenemende lokale autonomie en hen drijft tot maximalisatie van lokale belastingopbrengsten. Zij concurreren voor mobiele belasting bases ondernemingen door het lokale belastingbeleid te manipuleren. Dus, in tegenstelling tot een formeel en gestandaardiseerd nationaal belastingsysteem dat gecontroleerd wordt door de centrale overheid, worden informele en flexibele lokale belastingsystemen geleid door lokale overheden. Dit boek bevat vier essays. Het eerste essay analyseert systematisch de evolutie en huidige status van China's belastingsysteem. Het illustreert hoe de formele en informele interactie tussen de centrale overheid, lokale overheden en ondernemingen vorm geeft aan de instituties van China's belastingsysteem. Het tweede essay onderzoekt de interactie tussen de eerstgenoemde twee spelers in fiscale decentralisatie en laat zien dat deze de grootte van de overheid beperkt. Het derde essay modelleert de interactie tussen de laatstgenoemde twee spelers in een onderhandelingsspel waarin een onderneming een exit en voice strategie gebruikt om te onderhandelen met een lokale overheid voor gunstige belastingen en verklaart daarmee de diversiteit in lokale belastingsystemen. Het laatste essay modelleert de veranderingen van het belastingsysteem als een interactie tussen de drie spelers onder varierende economische, politieke en sociale beperkingen; de veranderingen bereiken een evenwicht waarin efficiency, macht en legitimiteit in balans zijn. Zhu, Z. http://repub.eur.nl/res/pub/10441/ 2007-05-30T00:00:00Z This paper analyzes the impact of corporate taxes on structural unemployment, using an applied general equilibrium model for the European Union. We find that the unemployment and welfare effects of corporate taxes differ considerably among European countries. The magnitude of these effects rise in particular in the broadness of the corporate tax base of a country, and the strength of international spillover effects through foreign direct investment. The effect on unemployment is smaller if the substitution elasticity between labour and capital is large, if international spillover effects operate primarily via multinational profit shifting, and if equilibrium forces on the labour market are strong. Although the effect of corporate taxes on unemployment may be smaller than the effect of labour and value-added taxes (e.g. under relatively strong real wage resistance), the welfare costs of corporate taxation are typically larger for most European countries under plausible parameters, especially under strong international spillovers. Bettendorf, L.J.H. Horst, A. van der Mooij, R.A. de http://repub.eur.nl/res/pub/9265/ 2007-03-22T00:00:00Z In Europe, declining corporate tax rates have come along with rising tax-to-GDP ratios. This paper explores to what extent income shifting from the personal to the corporate tax base can explain these diverging developments. We exploit a panel of European data on firm births and legal form of business to analyze income shifting via increased entrepreneurship and incorporation. The results suggest that lower corporate taxes exert an ambiguous effect on entrepreneurship. The effect on incorporation is significant and large. It implies that the revenue effects of lower corporate tax rates – possibly induced by tax competition -- partly show up in lower personal tax revenues rather than lower corporate tax revenues. Simulations suggest that between 10% and 17% of corporate tax revenue can be attributed to income shifting. Income shifting is found to have raised the corporate tax-to-GDP ratio by some 0.2%-points since the early 1990s. Mooij, R.A. de Nicodème, G. http://repub.eur.nl/res/pub/7419/ 2006-02-14T00:00:00Z This paper performs a meta-analysis of empirical estimates of uncompensated labour supply elasticities. We find that much of the variation in elasticities can be explained by the variation in gender, participation rates, and country fixed effects. Country differences appear to be small though. There is no systematic impact of the model specification or marital status on reported elasticities. The decision to participate is more responsive than is the decision regarding hours worked. Even at the intensive margin, we find that the elasticity for women exceeds that for men. For men and women in the Netherlands, we predict an uncompensated labour supply elasticity of 0.1 (or 0.2 if an alternative specification is preferred) and 0.5, respectively. These values are robust for alternative samples and specifications of the meta regression. Evers, M. Mooij, R.A. de Vuuren, D.J. van http://repub.eur.nl/res/pub/7188/ 2005-12-21T00:00:00Z China like other transition economies needs to establish a tax system compatible with a market economy, in particular, an efficient tax administration system with capable tax bureaucrats. The paper singles out the general and China-specific features by which central government attempts to accompany economic transformation via tax farming to tax bureaucratisation in tax administration. Based on empirical study in two provinces this paper shows that without including local government agencies and their budgets, China’s fiscal federalism cannot be analysed and argues that China’s emerging tax system depends on the institutional and organizational design that shapes the interaction between central government, local governments and economic agents. Zhu, Z. Krug, B.