wealth concentration over the path of development sweden 1873 2006 we study wealth concentration in sweden over 130 years from the beginning of industrialization until the present day our series are based on new evidence from estate and wealth tax data foreign and domestic family firm wealth and pension wealth estimates we find that swedish wealth concentration was high in the agrarian state and changed little during early industrialization from world war i until about 1950 the richest percentile lost ground to high income earners in the rest of the top wealth decile this equalization continued postwar the entire top decile lost out relative to the rest of the population around 1980 wealth compression stopped and inequality increased we approximate the effects of international flows and find that the recent increase in wealth inequality is probably larger than what official estimates suggest

evaluating greening farm policies a structural model for assessing agri environmental subsidies this study uses a structural econometric model to evaluate the impacts of support from a european union agri environmental program designed to reduce nutrient pollution from agricultural land drawing on a representative sample of individual grain farms we first quantify the effects of agri environmental payments on farms decisions on land allocation and on fertilizer use we then combine the predicted land allocation and fertilizer use with environmental production functions to quantify the impact on nutrient loading finally we assess the monetary value of reduced nutrient pollution drawing on a recent valuation study

fighting multiple tax havens this paper develops a competition theory framework that evaluates an important aspect of the oecd s harmful tax practices initiative against tax havens we show that the sequential nature of the process is harmful and more costly than a big bang multilateral agreement the sequentiality may even prevent the process from being completed successfully closing down a subset of tax havens reduces competition among the havens that remain active this makes their tax haven business more profitable and shifts a larger share of rents to these remaining tax havens making them more reluctant to give up their tax haven business moreover the outcome of this process reducing the number of tax havens but not eliminating them altogether may reduce welfare in the oecd

taxing top ceo incomes we use a firm ceo assignment framework to model the market for ceo effective labor in the model s equilibrium more talented ceos match with and supply more effort to larger firms taxation of ceo incomes affects the equilibrium pricing of ceo effective labor and hence spills over and affects firm profits absent the ability to tax profits or a direct concern for firm owners a standard prescription for high marginal income taxes emerges however given such an ability or concern the optimal marginal tax rates are much lower

sustainable development and corporate performance a study based on the dow jones sustainability index the goal of this paper is to examine whether business performance is affected by the adoption of practices included under the term corporate social responsibility csr to achieve this goal we analyse the relation between csr and certain accounting indicators and examine whether there exist significant differences in performance indicators between european firms that have adopted csr and others that have not the effects of compliance with the requirements of csr were determined on the basis of firms included in the dow jones sustainability index djsi and specific accounting indicators were applied to measure performance for the purposes of this study we selected one group of firms belonging to the djsi and another comprised of firms quoted on the dow jones global index djgi but not on the djsi the sample was made up of two groups of 55 firms studied for the period 1998 2004 empirical analysis supports the conclusion that differences in performance exist between firms that belong to the djsi and to the djgi and that these differences are related to csr practices we find that a short term negative impact on performance is produced

the curious case of corporate tax avoidance is it socially irresponsible in contrast to many aspects of the social responsibility of business csr scholarship has been largely silent on the issue of the payment of corporate tax this is curious because such tax payments are often considered a fundamental and easily measured example of a company s citizenship behavior however because the payment of corporate tax can often be legally avoided this activity represents a boundary condition for csr if the law and csr suggest that a company should pay its fair share of tax yet many successful companies actively avoid this social obligation should they be considered socially irresponsible this paper explores the issue of tax avoidance and the implications it has for any credible definition and measure of csr it also highlights an aspect of corporate practice that is deliberately hidden from public view

tax motivated transfer pricing and us intrafirm trade prices abstract this paper analyzes monthly data on us international trade prices between 1997 and 1999 in order to investigate the impact of tax influences on intrafirm trade prices results indicate that there is substantial evidence of tax motivated transfer pricing in us intrafirm trade prices there is a strong and statistically significant relationship between countries tax rates and the prices of intrafirm transactions controlling for other variables that affect trade prices as country tax rates are lower us intrafirm export prices are lower and us intrafirm import prices are higher this finding is consistent with theoretical predictions regarding tax motivated income shifting behavior

does no mean no a protest methodology in this paper we propose a method of identifying and truncating protesters in contingent valuation surveys we propose using a system of willingness to pay wtp questions that value multiple goods and that use both discrete choice and open ended questions coupled with multiple questions about protest beliefs administered to the entire sample protesters can then be identified because they reject all bids declare zero on all open ended questions and hold protest beliefs the proposed procedure has been empirically tested on an air pollution data set from poland where 27 of the sample was identified as protesters the adjustment for protesters increased the estimated wtp values by a factor of more than 3

burr under the saddle how media coverage influences strategic change in this paper we introduce a new antecedent to the strategic change literature by examining the effect of media coverage on the extent of strategic change specifically we examine how negative media coverage may prompt firms to make changes to their resource allocations and then explore how the makeup of the board and firm performance can moderate this relationship we develop a theoretical framework to explain why media coverage may affect strategic change and then test our theory with a longitudinal analysis of 250 firms over a four year period the empirical results lend support to our theory of media influence on strategic change and suggest that the evaluations of firms by outside constituents may influence the decision making of executives

changes in the value relevance of earnings and book values over the past forty years this paper investigates systematic changes in the value relevance of earnings and book values over time we report three primary findings first contrary to claims in the professional literature the combined value relevance of earnings and book values has not declined over the past forty years and in fact appears to have increased slightly second while the incremental value relevance of bottom line earnings has declined it has been replaced by increasing value relevance of book values finally much of the shift in value relevance fiom earnings to book values can be explained by the increasing frequency and magnitude of one time items the increasing frequency of negative earnings and changes in average firm size and intangible intensity across time

do ethics matter tax compliance and morality in this article we argue that puzzle of tax compliance can be explained at least in part by recognizing the typically neglected role of ethics in individual behavior that is individuals do not always behave as the selfish rational self interested individuals portrayed in the standard neoclassical paradigm but rather are often motivated by many other factors that have as their main foundation some aspects of ethics we argue that it is not possible to understand fully an individual s compliance decisions without considering in some form these ethical dimensions specifically we argue here that there is much direct and indirect evidence that ethics differ across individuals and that these differences matter in significant ways for their compliance decisions we then put this in the larger context of the inability of the standard neoclassical paradigm to explain compliance of at least some individuals and we suggest several possible avenues by which theory can be expanded to incorporate ethics we conclude by arguing that a full house of compliance strategies is needed to combat tax evasion strategies that include the traditional enforcement paradigm suggested by and consistent with neoclassical theory a less traditional service paradigm that recognizes the important role of a kinder and gentler tax administration in encouraging compliance and importantly a new trust paradigm that is built on the foundation of ethics in which the tax administration must recognize that it can erode the ethics of taxpayers by its own decisions

what does tax aggressiveness signal evidence from stock price reactions to news about tax shelter involvement abstract we study the stock price reaction to news about corporate tax aggressiveness we find that on average a company s stock price declines when there is news about its involvement in tax shelters we find some limited evidence for cross sectional variation in the reaction for example the reaction is more negative for firms in the retail sector suggesting that part of the reaction may be a consumer taxpayer backlash in addition the reaction is less negative for firms that are viewed to be generally less tax aggressive as proxied by the firm s cash effective tax rate we interpret this as being consistent with the market reacting positively to evidence that a firm is trying to reduce taxes when their financial reports would lead one to believe the firm is not tax aggressive

assessing the validity and reliability of contingent values a comparison of on site users off site users and non users abstract imperfect information in contingent markets can affect the validity and reliability of contingent values willingness to pay wtp for changes in natural resource allocations survey respondents can acquire information about the natural resource to be valued from behavior such as on site use of the resource off site use of the resource and or from the survey itself in this paper we compare the validity and reliability of wtp from respondents who obtained information in these different ways using theoretical validity tests based on relative prices as well as income we find that wtp is valid for respondents with information from on site and or off site use willingness to pay is less valid for respondents who had no information about the natural resource before they participated in the survey using an alternative form reliability test we find that wtp is in the technical sense reliable for all respondents and somewhat more reliable for on site users

capital tax reform and the real economy the effects of the 2003 dividend tax cut this paper tests whether the 2003 dividend tax cut one of the largest reforms ever to a us capital tax rate stimulated corporate investment and increased labor earnings using a quasi experimental design and us corporate tax returns from years 1996 2008 i estimate that the tax cut caused zero change in corporate investment and employee compensation economically the statistical precision challenges leading estimates of the cost of capital elasticity of investment or undermines models in which dividend tax reforms affect the cost of capital either way it may be difficult to implement an alternative dividend tax cut that has substantially larger near term effects jel c72 c78 c91

is corporate social responsibility performance associated with tax avoidance this study examines whether corporate social responsibility performance is associated with corporate tax avoidance employing a matched sample of 434 firm year observations i e 217 tax avoidant and 217 non tax avoidant firm year observations from the kinder lydenberg and domini database over the period 2003 2009 our logit regression results show that the higher the level of csr performance of a firm the lower the likelihood of tax avoidance our results indicate that more socially responsible firms are likely to display less tax avoidance finally the results from our additional analysis show that the csr categories community relations and diversity represent particularly important elements of csr performance that reduce tax avoidance

who owns the wealth in tax havens macro evidence and implications for global inequality abstract drawing on newly published macroeconomic statistics this paper estimates the amount of household wealth owned by each country in offshore tax havens the equivalent of 10 of world gdp is held in tax havens globally but this average masks a great deal of heterogeneity from a few percent of gdp in scandinavia to about 15 in continental europe and 60 in gulf countries and some latin american economies we use these estimates to construct revised series of top wealth shares in ten countries which account for close to half of world gdp because offshore wealth is very concentrated at the top accounting for it increases the top 0 01 wealth share substantially in europe even in countries that do not use tax havens extensively it has considerable effects in russia where the vast majority of wealth at the top is held offshore these results highlight the importance of looking beyond tax and survey data to study wealth accumulation among the very rich in a globalized world

the effect of taxes on investment and income shifting to puerto rico the income of puerto rican affiliates of u s corporations is essentially untaxed by either puerto rico or the united states this lowers the tax penalty on investment there and also makes it attractive to shift reported taxable income from the u s parent corporation to the puerto rican affiliate this paper investigates these two interrelated impacts of taxation by developing a structural econometric model of the joint decisions regarding investment and income shifting and estimating the model using firm level data on the activity u s corporations in puerto rico the results suggest that the income shifting advantages are the predominant reason for u s investment in puerto rico

have financial statements lost their relevance the authors explore the concern that financial statements no longer have the same relevance to investors that they had in the past they test for value relevance by measuring the total return that could have been earned from prior knowledge of financial statement information and by examining the explanatory power of accounting information on market values and annual market adjusted returns both analyses are applied to a broad sample of exchange listed and nasdaq firms for the 1952 94 period the authors find mixed evidence on value relevance of financial statement reporting during the test period

international corporate tax avoidance a review of the channels magnitudes and blind spots this paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations it surveys evidence on main channels of corporate tax avoidance including transfer mispricing international debt shifting treaty shopping tax deferral and corporate inversions moreover it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting we find that the literature suggests that for the most recent year a 1 percentage point lower corporate tax rate compared to other countries will expand before tax income by 1 5 percent an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time the literature on tax avoidance still has several unresolved puzzles and blind spots that require further research

corporate social responsibility a strategic advantage or a strategic necessity for many firms a focus on corporate social responsibility csr is an indication to stakeholders that the firm is concerned about social and environmental issues however these same firms may engage in csr activities with the expectation that these activities will increase their bottom line a relevant and highly researched question is the relationship between csr and performance the findings are inconclusive indicating a need to consider other explanations several authors have drawn on the resource based view of the firm to suggest that csr can give a firm a competitive advantage in this article we draw on and further develop this research by focusing on four outcomes of csr initiatives strategic disadvantage strategic necessity temporary strategic advantage and strategic advantage we exemplify this with two cases the article contributes to the literature by developing a set of possible outcomes by recognizing several issues which result in strategic necessity and by suggesting movement between the outcomes

capital is back wealth income ratios in rich countries 1700 2010 how do aggregate wealth to income ratios evolve in the long run and why we address this question using 1970 2010 national balance sheets recently compiled in the top eight developed economies for the united states united kingdom germany and france we are able to extend our analysis as far back as 1700 we find in every country a gradual rise of wealth income ratios in recent decades from about 200 300 in 1970 to 400 600 in 2010 in effect today s ratios appear to be returning to the high values observed in europe in the eighteenth and nineteenth centuries 600 700 this can be explained by a long run asset price recovery itself driven by changes in capital policies since the world wars and by the slowdown of productivity and population growth in line with the s g harrod domar solow formula that is for a given net saving

suspicious success cheating inequality acceptance and political preferences abstract supporters of left wing parties typically place more emphasis on redistributive policies than right wing voters i investigate whether this difference in tolerating inequality is affected by suspicious success achievements that may arise from cheating using a laboratory experiment i exogenously vary cheating opportunities for stakeholders who work on a real effort task and earn money according to their self reported performances an impartial spectator is able to redistribute the earnings between the stakeholders although it is not possible to detect cheating i find that the opportunity to cheat leads to different views on whether to accept inequality left wing spectators substantially reduce inequality when cheating is possible while the treatment has no significant effect on choices of right wing spectators since neither differences in beliefs nor differences in norms about cheating can explain this finding it seems to be driven by a difference in redistributive preferences these results suggest that views on redistribution will diverge even more once public awareness increases that inequality may be to a certain extent created by cheating

corporate social responsibility theories mapping the territory the corporate social responsibility csr field presents not only a landscape of theories but also a proliferation of approaches which are controversial complex and unclear this article tries to clarify the sit uation mapping the territory by classifying the main csr theories and related approaches in four groups 1 instrumental theories in which the corporation is seen as only an instrument for wealth creation and its social activities are only a means to achieve economic results 2 political theories which concern themselves with the power of corporations in society and a responsible use of this power in the political arena 3 integrative theories in which the corporation is focused on the satisfaction of social demands and 4 ethical theories based on ethical responsibilities of corporations to society in practice each csr theory presents four dimensions related to profits political performance social demands and ethical values the findings suggest the necessity to develop a new theory on the business and society relationship which should integrate these four dimensions

the missing wealth of nations are europe and the u s net debtors or net creditors this paper shows that official statistics substantially underestimate the net foreign asset positions of rich countries because they fail to capture most of the assets held by households in offshore tax havens drawing on systematic anomalies in portfolio investment positions and a unique swiss dataset i find that 8 of the global financial wealth of households is held in tax havens 6 of which goes unrecorded on the basis of plausible assumptions accounting for unrecorded assets turns the eurozone officially the world s second largest net debtor into a net creditor it also reduces the u s net debt significantly the results shed new light on global imbalances and challenge the widespread view that after a decade of poor to rich capital flows external assets are now in poor countries and debts in rich countries i provide concrete proposals to improve international investment statistics

taxing across borders tracking personal wealth and corporate profits globalization is making it increasingly easy for corporations to shift profits to low tax countries modern technology has also made it simpler for wealthy individuals to move funds to undeclared bank accounts in offshore tax havens both issues have featured prominently in the news and global economic debates since the financial crisis but the arguments tend to be based on relatively little empirical evidence measuring the costs of tax havens to foreign governments is fraught with difficulties however balance of payments data and corporate filings show that us companies are shifting profits to bermuda luxembourg and similar countries on a large and growing scale about 20 percent of all us corporate profits are now booked in such havens a tenfold increase since the 1980s this profit shifting is typically done within the letter of the law and thus would be best described as tax avoidance rather than fraud i attempt to quantify its cost for government coffers by taking a fresh look at the most recent macroeconomic evidence and combining it in a systematic manner over the last 15 years the effective corporate tax rate of us companies has declined from 30 to 20 percent and about two thirds of this decline can be attributed to increased profit shifting to low tax jurisdictions wealthy individuals too use tax havens sometimes legally to benefit from banking services not available in their home country and sometimes illegally to evade taxes a number of changes have sought with some success to curb that form of tax evasion over the last years yet the available evidence from switzerland and

the effect of friendly persuasion and gender on tax comliance behavior friendly persuasion in contrast to deterrent measures like tax audits and penalties on underreported taxes is a positive and possibly a cost effective method of increasing taxpayer compliance however prior studies have failed to show that friendly persuasion has a significant impact on compliance blumenthal et al 2001 mcgraw and scholz 1991 in our study in contrast to prior studies we examine the impact of generating and reading reasons supporting compliance as friendly persuasion on individuals income reporting behavior as well as control for gender effects specifically we predict an interaction effect between friendly persuasion and gender on compliance behavior we carried out a 2 friendly persuasion and control 2 men and women full factorial experiment where participants earned 30 by completing two questionnaires participants in the friendly persuasion group were required first to generate and second to read a list of reasons why they should comply fully afterwards participants in both groups were asked to report the income they earned and pay tax on the reported income the results show a significant main effect for gender as well as a significant interaction effect between gender and friendly persuasion on income reported women in the friendly persuasion group reported significantly higher income compared to men in that group other comparisons were not significant policy implications for increasing taxpayers ethics and compliance are highlighted

responsibility in paradise the adoption of csr tools by companies domiciled in tax havens in contrast to the recent rise to economic importance of offshore finance centres ofcs the topic of taxation has so far created little interest among scholars of corporate social responsibility csr this paper makes two contributions to addressing this lacuna applying a range of influential normative theories of ethics it first offers an ethical evaluation of tax havens second the paper examines what use large firms that are headquartered in two ofcs bermuda and the cayman islands make of formal csr tools the emerging duplicity in tax haven based companies professing social responsibility highlights once more the political nature of csr where at least some firms and or industries can successfully limit government power to enact regulation as well as shape the discourse around csr the study of csr in ofc based firms thus calls into question the usefulness of the often quoted definition of csr as going beyond the law

capital accumulation private property and rising inequality in china 1978 2015 this paper combines national accounts survey wealth and fiscal data including recently released tax data on high income taxpayers in order to provide consistent series on the accumulation and distribution of income and wealth in china over the 1978 2015 period we find that the aggregate national wealth income ratio has increased from 350 in 1978 to 700 in 2015 this can be accounted for by a combination of high saving and investment rates and a gradual rise in relative asset prices reflecting changes in the legal system of property the share of public property in national wealth has declined from about 70 in 1978 to 30 in 2015 which is still a lot higher than in rich countries close to 0 or negative next we provide sharp upward revision of official inequality estimates the top 10 income share rose from 27 to 41 of national income between 1978 and 2015 while the bottom 50 shar e dropped from 27 to 15 china s inequality levels used to be close to nordic countries and are now approaching u s levels

in praise of tax havens international tax planning and foreign direct investment abstract the multinationalization of corporate investment in recent years has given rise to a number of international tax avoidance schemes that may be eroding tax revenues in industrialized countries but which may also reduce tax burdens on mobile capital and so facilitate investment both the welfare effects of and the optimal response to international tax planning are therefore ambiguous evaluating these factors in a simple general equilibrium model we find that citizens of high tax countries benefit from some tax planning paradoxically if tax rates are not too high an increase in tax planning activity causes a rise in optimal corporate tax rates and a decline in multinational investment thus fears of a race to the bottom in corporate tax rates may be misplaced

corporate tax avoidance and firm value abstract do corporate tax avoidance activities advance shareholder interests this paper tests alternative theories of corporate tax avoidance using unexplained differences between income reported to capital markets and to tax authorities ols estimates indicate that the effect of tax avoidance on firm value is a function of firm governance as predicted by an agency perspective on corporate tax avoidance instrumental variables estimates based on exogenous changes in tax regulations yield larger overall effects and reinforce the basic result as do several robustness checks the results suggest that the simple view of corporate tax avoidance as a transfer of resources from the state to shareholders is incomplete given the agency problems characterizing shareholder manager relations

how do uk financial institutions really price their banking products abstract this paper has several objectives the first is to explore the type or types of imperfect competition that prevailed in the retail banking sector in the 1990s a general linearised pricing model is employed to test for the degree to which competition in certain markets deviated from the competitive ideal the key finding is that with the exception of mortgage products deposit and loan rate setting by uk financial institutions is best described by the salop stiglitz model of monopolistic competition with bargain and rip offs cournot type behaviour is evident in some cases indirectly the presence of perfect contestability is largely ruled out another objective is to compare these findings with the results of a similar study conducted nearly a decade ago when financial reforms introduced to encourage greater competition were relatively recent based on the results of this study the policy lesson is that financial firms exhibit different types of price setting behaviour depending on the banking product the policy implication is to require firms to produce comparable information for consumers thereby helping to contain the loss of consumer surplus in imperfectly competitive markets

taxpayers perceptions of practitioners finding one who is effective and does the right thing this paper examines australian taxpayers perceptions of their idealized tax practitioner as well as their perceptions of their current tax preparer the analysis was based on survey responses from 2 040 randomly selected australian taxpayers who completed the community hopes fears and actions survey author 2000 three dimensions were identified as underlying taxpayer judgements of their idealized practitioner a minority of the sample indicated that their ideal was a creative aggressive tax planning type a person who was well networked and familiar with tax office intelligence and enforcement priorities a second type of idealized practitioner engaged in the cautious minimisation of tax unlike creative accountants practitioners of this type avoided conflict while being sophisticated about identifying opportunities to minimise tax the most popular idealized type was the low risk no fuss practitioner who was honest and risk averse the data revealed that taxpayers are likely to find tax practitioners who have the attributes that they value most highly but that when taxpayers perceptions of their tax practitioner are combined with their ideals only two substantive dimensions emerge tax avoidance and doing the right thing our inability to distinguish tax practitioners who are seen to provide cautious and aggressive advice in practice has important implications for the growth of aggressive tax planning markets in the community

international corporate taxation and u s multinationals behaviour an integrated approach this paper explores the effects of corporate taxation on u s capital invested abroad and on tax planning practices the econometric analysis first indicates that investment is strongly influenced by average tax rates with a magnified impact particularly for low tax rates implying that the attractiveness of low tax countries is not weakened by anti deferral rules and cross crediting limitations further explorations suggest that firms report higher profit higher subpart f income and are less likely to repatriate dividends when they are located in low tax jurisdictions finally when the role of effective transfer pricing regulations is estimated it appears that low degrees of law enforcement are associated with higher income shifting ce memoire s interesse aux effets des impots sur le revenu des societes sur l investissement et les pratiques de planifications fiscales des firmes multinationales americaines l analyse econometrique indique que l investissement americain est fortement influence par le taux d imposition moyen et que cet impact est sensiblement plus important pour de faibles taux d imposition ceci suggere que l attractivite des pays a faible imposition n est pas affaiblie par les limites imposees par le systeme fiscal americain sur la possibilite de differer l impot et sur les moyennes de credit des tests additionnels montrent que les firmes reportent un profit ainsi qu un revenu subpart f plus important et rapatrient moins leurs dividendes lorsqu elles sont localisees dans des pays a faible imposition finalement en estimant le role joue par l efficacite des reglementations en termes de prix de transferts il apparait qu un faible etat de droit est associea de plus fortes manipulations fiscales

an econometric analysis of willingness to pay for sustainable development a case study of the volcji potok landscape area abstract when the market for a certain good is competitive enough economic activities can be studied by the market pricing mechanism because this is usually not feasible in case of environmental goods with embodied natural and cultural heritage particular methods for economic valuation of such goods have to be applied the present article represents the economic valuation of the landscape development and protection area of volcji potok which is an important slovenian cultural landscape area with internationally recognized qualities for this purpose we combined classical contingent valuation with a closed version of discrete choice method where the protest responses have been removed by using econometric analysis we obtained the value of willingness to pay and established its determinants we also made an attempt to control for different biases that arise in such analyses at last we used the adjusted average individual value of willingness to pay to calculate the aggregate willingness to pay the present analysis represents one of the very few applications of the method to central and eastern european countries

can an industry be socially responsible if its products harm consumers the case of online gambling online gambling companies claim that they are ethical providers they seem committed to corporate social responsibility csr practices that are aimed at preventing or minimising the harm associated with their activities our empirical research employed a sample of 209 university student online gamblers who took part in an online survey our findings suggest that the extent of online problem gambling is substantial and that it adversely impacts on the gambler s mental and physical health social relationships and academic performance online problem gambling seems to be related to the time spent on the internet and gambling online parental peer gambling and binge drinking as our findings show that there are harmful repercussions associated with online gambling we argue that companies in this controversial sector cannot reach the higher level of csr achieved by other industries nevertheless they can gain legitimacy on the basis of their csr engagement at a transactional level and so by meeting their legal and ethical commitments and behaving with transparency and fairness the integrity of the company can be ensured we also argue that current failures in the implementation and control of csr policies the reliance on revenue from problem gamblers losses and controversial marketing activities appear to constitute the main obstacles in the prevention or minimisation of harm related to online gambling as online gambling companies must be responsible for the harm related to their activities we suggest that csr policies should be fully implemented monitored and clearly reported all forms of advertising should be reduced substantially and unfair or misleading promotional techniques should be banned the industry should not rely on revenue from problem gamblers nor should their behaviour be reinforced by marketing activities i e rewards we realise however that it is unrealistic to expect the online gambling industry to prioritise harm prevention over revenue maximisation policy makers and regulators therefore would need to become involved if the actions suggested above are to be undertaken csr is paramount to minimise harm and provide a healthier user experience in this business sector but it also poses marketing dilemmas we support a global collaborative approach for the online gambling industry as harm related to gambling is a public health issue

tax motivated transfer mispricing in south africa direct evidence using transaction data abstract this paper provides the first direct systematic evidence of profit shifting through transfer mispricing in a developing country using south african transaction level customs data i directly test for transfer price deviations from arm s length pricing i find that multinational firms in south africa manipulate transfer prices in order to shift taxable profits to low tax countries the estimated tax loss relating to imported goods alone is 0 5 of corporate tax payments my estimates do not support the common belief that transfer mispricing in south africa is more severe than in advanced economies i find that an oecd recommended reform had no long term impact on transfer mispricing but argue that the method used in this paper provides a cost efficient way to curb transfer mispricing

impact of personal and situational factors on taxpayer compliance an experimental analysis this study used a laboratory experiment with monetary incentives to test the impact of three personal factors moral reasoning value orientation and risk preference and three situational factors the presence absence of audits tax inequity and peer reporting behavior while controlling for the impact of other demographic characteristics on tax compliance analysis of covariance ancova reveals that all the main effects analyzed are statistically significant and robustly influence tax compliance behavior these results highlight the importance of obtaining a proper understanding of these factors for developing effective policies for increasing the level of compliance and indicate that standard enforcement polices based on punishment alone should be supplemented by an information system that would acquaint tax payers with the compliance level of other tax payers reinforce the concept of fairness of the tax system among tax payers and develop programs that enhance and appeal to a taxpayer s moral conscience and reinforce social cohesion

competition transmission and bank pricing policies evidence from belgian loan and deposit markets abstract this paper addresses the pass through from market interest rates to retail bank interest rates the paper advocates a heterogeneous approach and applies it to the belgian banking market a substantial proportion of the heterogeneity in bank pricing policies can be explained by the bank lending channel and the relative market power hypothesis the results also suggest that the long term pass through is typically less than one for one rejecting the completeness hypothesis while there is no convincing evidence for asymmetry in retail rates large deviations from equilibrium mark ups are faster reduced than small deviations overall conditions for corporate loans are more competitive compared to consumer loans demand and savings deposits have by far the most rigid prices

the power of financial transparency an event study of country by country reporting standards we show that recent european legislation requiring oil gas and mining companies to disclose their tax payments on a country by country basis was associated with significant decreases in firm value this suggests that tax evasion creates considerable rents for firms in extractive industries and that disclosure rules have the potential to reduce these rents

tax evasion in new disguise examining tax havens international bank deposits abstract recent efforts to reduce international tax evasion focus on information exchange with tax havens using bilateral bank data for 1397 countrypairs in a balanced quarterly panel from 2003 i to 2017 iv we first show that information on request treaties with tax havens reduce bank deposits in tax havens by 27 5 second also deposits from tax havens in high tax countries decline after such treaties are signed giving authorities a second angle to detect tax evasion both reactions dissipate overt time and treaties signed after 2010 trigger no further reactions these results cannot be explained by deposit shifting alone and we find no evidence of transitioning into legality third recent policy initiatives based on the automatic exchange of bank information lead to very similar initial reactions as earlier treaties consistent with adjustments on the part of tax evaders this suggests that tax evaders adapt to established information exchange treaties by using new disguises to hide their true income and react again to new measures these results cast doubt on the effectiveness of current forms of information exchange to tackle international tax evasion

going to haven corporate social responsibility and tax avoidance this study examines the endogenous relation between corporate social responsibility csr and tax avoidance by focusing on a common strategy of corporate tax avoidance i e establishing entities in offshore tax havens using hand collected data on a sample of u s firms we find that firms csr ratings increase substantially in the two years after they first open tax haven affiliates we provide evidence by using the controlled foreign corporations cfc look through rule enacted by congress in 2006 that facilitates offshore profit shifting we find that firms that are affected by the cfc legislation increase their csr practices in response overall our results are consistent with the risk management theory which argues that firms hedge against the potential negative consequences of aggressive tax avoidance practices through an increase in positive csr activities

environmental financing in european economies in transition the paper offers a perspective on environmental predicament of economies in transition emphasis is put on how these economies finance their environmental needs it is observed that the demand for environmental financing can be affected both by environmental policy measures such as internalization of externalities and by other factors such as the softness of budget constraints faced by firms the role of subsidies in many countries of the central and eastern european region provided through special purpose environmental funds is then scrutinized in particular the question is asked whether such funds crowd out commercial capital from the market conditions are discussed that would allow the funds to play their constructive environmental roles without crowding out private financing

a computational approach to the optimal structure of bank input prices abstract most bank deposits contain an embedded option which permits the depositor to withdraw funds at will demand deposits generally allow costless withdrawal while time deposits often require payment of an early withdrawal penalty managing the risk that depositors will exercise their withdrawal option is an important aspect of input pricing this paper acknowledges the threat of deposit withdrawal and then solves for the optimal structure of bank deposit rates

incentives to transfer profits a japanese perspective the intense interest in transfer pricing problems shown by academics and tax practitioners alike has deepened with the publication on 8 october 1997 of the uk inland revenue s consultative document and draft legislation on transfer pricing in particular there has been a spate of professional commentary and queries for example see atkinson and tyrrall 1997 bunn 1997 taylor 1997 antzcak 1998 fairpo 1998 the prevailing tone of many articles is an agreement that something needed to be done in this area to address a perceived problem in the growth and development of multinational corporations the removal of international trade barriers has created a global economy with unprecedented world trade world trade has increased by a factor of 16 since 1950 while total world output increased only 5 5 times intragroup transfers are a large proportion of this trade tax authorities are acutely aware of the need to protect their tax base by policing transfer pricing more actively than in the past atkinson and tyrrall 1997 p 18 goods which may be subject to transfer pricing account for about half of world trade adams 1997 much of the academic research on transfer pricing has concentrated on the global aspects of income shifting for example see harris 1993 harris et al 1993 klassen et al 1993 jacob 1996

consumer reactions to corporate tax strategies effects on corporate reputation and purchasing behavior on the basis of an interdisciplinary approach linking taxation marketing and corporate social responsibility the present research investigates the effects of media reports on aggressive and responsible corporate tax strategies ctss on corporate success with consumers by means of two laboratory experiments n 150 360 we analyze the effects of the ctss on corporate reputation consumer purchase intention and the consumer s willingness to pay our results suggest that aggressive ctss diminish corporate success with consumers whereas responsible ctss enhance it nevertheless consumers are not willing to pay a price premium for products sold by responsible tax planning companies but rather punish aggressive tax planning companies through a slightly lower willingness to pay finally consumers tax morale and their attitude toward tax avoidance are important moderating variables given the growing level of media interest in taxation our findings are crucial for assessing consumer related non tax costs and the benefits of different ctss

the management nexus of imperfect duty kantian views of virtuous relations reasoned discourse and due diligence a nexus of imperfect duty defined as positive commitments that have practical limits describes business behavior toward building affable and virtuous relations maintaining reasoned social discourse and performing the due diligence necessary for making knowledgeable business decisions a theory of the development and extent of the limits of these imperfect managerial duties is presented here a theory that in part explains the activities and personnel included under the firm s umbrella as a result the nexus of imperfect duty is shown to complement the perfect duty based nexus of contracts theory of the firm the existence of flexible trade offs involving these duties trade offs limited by contractual arrangements whether explicit or implicit is shown to be one of the advantages of imperfect duty for developing business relations

why stakeholder and stockholder theories are not necessarily contradictory a knightian insight the normative foundations of the investor centered model of corporate governance represented in mainstream economics by the nexus of contracts view of the firm have come under attack mainly by proponents of normative stakeholder theory we argue that the nexusof contracts view is static and limited due to its assumption of price output certainty we attempt a synthesis of the nexus of contracts and the knightian views which provides novel insights into the normative adequacy of the investor centered firm implications for scholarship and management practice follow from our discussion

taboo or technical issue an empirical assessment of taxation in sustainability reports abstract prior literature offers mixed evidence on the existence of a link between corporate taxation and corporate social responsibility csr this article contributes to this debate by examining the level of tax disclosure in sustainability reports by firms listed in the united states the united kingdom and germany from 2007 to 2012 the aim is to offer micro level evidence of whether firms themselves perceive corporate tax payments as being part of their csr on the basis of a hand collected 540 firm year dataset of ninety publicly listed firms the article shows that the level of tax disclosure was rather low however it did increase over time and was most prevalent in the united kingdom moreover the reports indicate considerable variation in attitudes toward taxation overall the widespread silence on tax issues and a non uniform treatment of taxation in sustainability reports underline the complex role of tax payments when it comes to csr examination of determinants of disclosure shows that firms with lower effective tax rates negative media coverage in tax matters and industry specific stakeholder pressure were generally more inclined to disclose tax information which is in line with predictions based on stakeholder and legitimacy theory finally the article discusses the importance of cultural and social norms when it comes to tax related sustainability reporting and provides theoretical as well as regulatory implications

cross border tax evasion under a unilateral fatca regime abstract cross border tax evasion has emerged in recent years as a central issue in tax enforcement traditionally the legal regime governing cross border tax enforcement was based on information exchange upon request in 2010 the us congress enacted the foreign account tax compliance act fatca which seeks to induce foreign financial institutions ffis to participate in a global regime of automatic information reporting of the income of us residents to the us government this paper presents a simple theoretical model of cross border investment that analyzes the consequences of this unilateral fatca regime the model emphasizes cross border investors heterogeneous intrinsic motivation to comply with tax law as well as the impact of information reporting requirements on the cost of providing financial services in fatca compliant equilibria in which ffis report information to the us government ffis face a higher cost of providing financial services increasing the fees charged to their accountholders consequently tax compliant behavior such as investing via their domestic financial sector becomes more costly for foreign residents under certain conditions a unilateral fatca regime causes increased cross border tax evasion among residents of foreign countries this result is robust to various extensions

uk bank services for small business how competitive is the market abstract this study is the first to employ an econometric model to examine the pricing behaviour of british financial institutions with respect to key bank products services offered to small and medium sized enterprises smes including current accounts investment accounts business loans and mortgages a mean group approach is used on a panel of monthly data to gauge individual banks reactions to identify factors influencing the setting of deposit and loan rates and to assess the competitive structure that best describes the uks sme banking market though the results should be interpreted with caution the empirical evidence is suggestive of a complex oligopoly policies directed at improving information and making it easier for small businesses to change banks accounts would reduce inertia and improve competition among financial institutions

income misattribution under formula apportionment abstract alternatives to the current system of separate tax accounting such as the proposed common consolidated corporate tax base in europe would apportion a firm s worldwide profits using formulas based on the location of employment capital or sales this paper offers a new method of evaluating the accuracy of these apportionment rules and the ownership distortions they create evidence from european company accounts indicates that apportionment formulas significantly misattribute income since employment and other factors on which they are based do a very poor job of explaining a firm s profits for example the magnitude of property employment and sales explains less than 22 of the variation in profits between firms and the prediction estimates from using such a formula exceed half of predicted profits 64 of the time and exceed twice predicted income 11 of the time as a result the use of formulas rewards or punishes international mergers and divestitures by reallocating taxable income between operations in jurisdictions with differing tax rates the associated ownership distortion is minimized by choosing factor weights to minimize weighted squared prediction errors for which based on the european evidence labor inputs should play little if any role in allocation formulas but even a distortion minimizing formula creates large incentives for inefficient ownership reallocation due to the enormous variation in profitability that is unexplained by formulary factors implying that significant resource allocation costs would accompany european adoption of formulary apportionment methods

aggressive tax avoidance a conundrum for stakeholders governments and morality this is the conundrum that gives rise to the issue of tax avoidance although governments always seem to lack sufficient funds to support the needs of society tax codes are often written that offer a way out of paying taxes for some but not all constituents the ways out are referred to as loopholes that allow taxpayers to avoid taxes this paper first defines the basic terms of tax avoidance and tax evasion and then offers an ethical review of the morality of aggressive tax avoidance aggressive tax avoidance is then addressed in relationship a corporate entity s tone at the top the conclusion is drawn that use of the letter of the law to avoid payment of taxes sorely needed by governments for the good faith provision of public goods and services is ethically unacceptable several suggestions for change are provided including a new financial statement disclosure and the possibility of a published corporate ethics report

changes in corporate effective tax rates over the past 25 years abstract we investigate systematic changes in corporate effective tax rates over the past 25 years and find that effective tax rates have decreased significantly contrary to conventional wisdom the decline in effective tax rates is not concentrated in multinational firms effective tax rates have declined at approximately the same rate for both multinational and domestic firms moreover within multinational firms both foreign and domestic effective rates have decreased finally changes in firm characteristics and declining foreign statutory tax rates explain little of the overall decrease in effective rates

putting distribution back at the center of economics reflections on capital in the twenty first century when a lengthy book is widely discussed in academic circles and the popular media it is probably inevitable that the arguments of the book will be simplified in the telling and retelling in the case of my book capital in the twenty first century 2014 a common simplification of the main theme is that because the rate of return on capital r exceeds the growth rate of the economy g the inequality of wealth is destined to increase indefinitely over time in my view the magnitude of the gap between r and g is indeed one of the important forces that can explain historical magnitudes and variations in wealth inequality however i do not view r g as the only or even the primary tool for considering changes in income and wealth in the 20th century or for forecasting the path of income and wealth inequality in the 21st century in this essay i will take up several themes from my book that have perhaps become attenuated or garbled in the ongoing discussions of the book and will seek to re explain and re frame these themes first i stress the key role played in my book by the interaction between beliefs systems institutions and the dynamics of inequality second i briefly describe my multidimensional approach to the history of capital and inequality third i review the relationship and differing causes between wealth inequality and income inequality fourth i turn to the specific role of r g in the dynamics of wealth inequality specifically a larger r g gap will amplify the steady state inequality of a wealth distribution that arises out of a given mixture of shocks fifth i consider some of the scenarios that affect how r g might evolve in the 21st century including rising international tax competition a growth slowdown and differential access by the wealthy to higher returns on capital finally i seek to clarify what is distinctive in my historical and political economy approach to institutions and inequality dynamics and the complementarity with other approaches

competitive conditions among the major british banks this paper reports an empirical assessment of competitive conditions among the major british banks during a period of major structural change specifically estimates of the rosse panzar h statistic are reported for a panel of 12 banks for the period 1980 2004 the sample banks correspond closely to the major british banking groups specified by the british banking association the robustness of the results of the rosse panzar methodology is tested by estimating the ratio of lerner indices obtained from interest rate setting equations the results confirm the consensus finding that competition in british banking is most accurately characterised by the theoretical model of monopolistic competition there is evidence that the intensity of competition in the core market for bank lending remained approximately unchanged throughout the 1980s and 1990s however competition appears to have become less intense in the non core off balance sheet business of british banks

international exchanges as the basis for conceptualizing ethics in international business extant business ethics literature available for application to international business demonstrates some variety but no comprehensive principles while the domains of both international business and business ethics are expanding they are also becoming increasingly divergent at the same time the primacy accorded to the multinational enterprise in both fields ignores the socio cultural and political embeddedness of economic activities and multiple agencies in international business individuals firms nations etc some international business theorists have offered the view that international exchange should be the central building block for theories on international business in this paper it is argued that international exchange could be the fundamental unit of analysis for international business ethics as well the potentially unifying features of exchange norms and ethical principles leads the author to develop some core exchange ethics principles that are tested on three recent international business practices

do higher corporate taxes reduce wages micro evidence from germany because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages we circumvent these problems by using an 11 year panel of data on 11 441 german municipalities tax rates 8 percent of which change each year linked to administrative matched employer employee data consistent with our theoretical model we find a negative effect of corporate taxation on wages a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill the direct wage effect arising in a collective bargaining context dominates while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility high and medium skilled workers who arguably extract higher rents in collective agreements bear a larger share of the corporate tax burden

about capital in the twenty first century in this article i present three key facts about income and wealth inequality in the long run emerging from my book capital in the twenty first century and seek to sharpen and refocus the discussion about those trends in particular i clarify the role played by r g in my analysis of wealth inequality i also discuss some of the implications for optimal taxation and the relation between capital income ratios and capital shares

shareholder theory and kant s duty of beneficence this article draws on the moral philosophy of immanuel kant to explore whether a corporate duty of beneficence to non shareholders is consistent with the orthodox shareholder theory of the firm it examines the ethical framework of milton friedman s argument and asks whether it necessarily rules out the well being of non shareholders as a corporate objective the article examines kant s distinction between duties of right and duties of virtue the latter including the duty of beneficence and investigates their consistency with the shareholder theory the article concludes that it is possible within the ethical framework of shareholder theory for managers to pursue directly the happiness of non shareholders furthermore shareholders have a duty to hold management to account for the moral consequences of the firm s activities on non shareholding stakeholders

modelling british interest rate adjustment an error correction approach an error correction model is used to capture the dynamics of british retail deposit and loan rate responses to changes in the central bank s base rate the test is conducted using a monthly series of interest rates for four generic retail banking products over the period 1986 93 the adjustment process is found to vary considerably between and within banks and products the results suggest that this market continues to exhibit many features of imperfect competition and that adjustment differences could affect the speed of the money transmission mechanism

moral ethics v tax ethics the case of transfer pricing among multinational corporations in recent years there has been an increased awareness with regards to ethics in business more specifically the abundance of well publicized examples of cheating greed and hypocrisy has created some alarm about the general state of personal ethics josephson 1988 recent examples include the oliver north ivan boesky and jimmy swaggart cases the tax practitioner probably has little direct concern for matters of misconduct and ethical improprieties as mentioned above adherence to a code of conduct appears to circumvent the ethical conflict typically found in the business environment the tax practitioner s ultimate goal is tax minimization for clients this goal has the blessings of the courts and the writers of tax law

imperfect tax competition for profits asymmetric equilibrium and beneficial tax havens abstract we present a model of tax competition for real investment and profits and show that the presence of tax havens in some cases increases the tax revenue of countries in the first part of the paper we argue that tax competition for profits is likely to be imperfect in the sense that the jurisdiction with the lowest tax rate does not necessarily attract all shifted profits under this assumption tax competition between a large number of identical countries may lead to either a symmetric equilibrium with no profit shifting or an asymmetric equilibrium where firms shift profits from high tax to low tax countries in the second part of the paper we introduce tax havens starting from a symmetric equilibrium tax havens unambiguously reduce the tax revenue of countries due to a leakage effect tax havens attract tax base from countries and a competition effect the optimal response to the increased tax sensitivity of tax bases involves a reduction of tax rates starting from an asymmetric equilibrium however tax havens also raise the tax revenue of countries through a crowding effect tax havens make it less attractive to compete for profits and thus induce low tax countries to become high tax countries we demonstrate that the latter effect may dominate the former effects so that countries on balance benefit from the presence of tax havens

bank funding costs in a rising interest rate environment one key risk to the banking system is how funding costs will change as monetary policy is normalized and interest rates rise after almost a decade of near zero rates our contribution is to develop a model that jointly estimates banks balance sheets and retail interest rates to arrive at a consistent estimate of the change in bank funding costs as market rates change our estimates imply a 100 basis point shock to the federal funds rate would increase overall deposit funding costs by about 40 billion which is roughly equal to 25 of aggregate annual net income for commercial banks and savings institutions we also find that deposit rate responses are largely symmetric in contrast to some previous research showing deposit rates are less responsive to upward movements in reference rates we introduce unique and confidential data on bank deposit betas to anchor our results

double tax discrimination to attract fdi and fight profit shifting the role of cfc rules abstract governments worldwide use targeted tax policies to trade off the gains from increased fdi against the cost of excessive profit shifting by multinational firms we show that nationally optimal tax systems generally incorporate both thin capitalization rules which tax discriminate between purely national and multinational firms and controlled foreign company cfc rules which discriminate between home based and foreign based multinationals in the non cooperative policy equilibrium both thin capitalization rules and cfc rules are set more lenient than if tax policies were chosen cooperatively implying an excessive tax discrimination in favor of multinationals we also analyze the effects of reduced transaction costs for fdi and reduced costs for debt shifting on the optimal policy mix our results correspond to the observed developments of anti avoidance rules in oecd countries

distributional national accounts methods and estimates for the united states this article combines tax survey and national accounts data to estimate the distribution of national income in the united states since 1913 our distributional national accounts capture 100 of national income allowing us to compute growth rates for each quantile of the income distribution consistent with macroeconomic growth we estimate the distribution of both pretax and posttax income making it possible to provide a comprehensive view of how government redistribution affects inequality average pretax real national income per adult has increased 60 from 1980 to 2014 but we find that it has stagnated for the bottom 50 of the distribution at about 16 000 a year the pretax income of the middle class adults between the median and the 90th percentile has grown 40 since 1980 faster than what tax and survey data suggest due in particular to the rise of tax exempt fringe benefits income has boomed at the top the upsurge of top incomes was first a labor income phenomenon but has mostly been a capital income phenomenon since 2000 the government has offset only a small fraction of the increase in inequality the reduction of the gender gap in earnings has mitigated the increase in inequality among adults but the share of women falls steeply as one moves up the labor income distribution and is only 11 in the top 0 1 in 2014

aggressive tax avoidance by managers of multinational companies as a violation of their moral duty to obey the law a kantian rationale managers of multinational companies often favour an aggressive tax avoidance strategy that pushes the legal limits onto the advantage of shareholders and the disadvantage of the spirit of democratically legitimized tax laws the public and media debate whether such aggressive behaviour is immoral aggressive tax avoidance is a subset of the aggressive legal interpretations potentially observable in all fields which places little weight on the will of a democratically legitimized legislation a thorough ethical analysis based on the deontological approach of kant demonstrates that aggressive tax avoidance as a special case of operating on the edge of legal boundaries is potentially immoral applying the kantian contradiction of conception or will test shows that this maxim might not be conceived or willed as a general law of nature if all natural or legal persons aggressively interpret laws on all subjects and in every imaginable situation then central principles of the system of law we all rely upon would be severely compromised therefore aggressive tax avoidance by managers of multinational companies may violate the managers moral duty to obey not only the letter but also the intention or spirit of the law the validity of the argumentation depends critically on the formulation and interpretation of the respective maxims and on assumptions about the legal system preserving central elements of kantian philosophy the article demonstrates the complexity of a philosophical argumentation which tries to justify the moral intuitions that underpin the common negative evaluation of aggressive legal strategies in business

ethics in tax practice a study of the effect of practitioner firm size while much of the empirical accounting literature suggests that if differences do exist big four employees are more ethical than non big four employees this trend has not been evident in the recent media coverage of big four tax practitioners acting for multinationals accused of aggressive tax avoidance behaviour however there has been little exploration in the literature to date specifically of the relationship between firm size and ethics in tax practice we aim here to address this gap initially exploring tax practitioners perceptions of the impact of firm size on ethics in tax practice using interview data in order to identify the salient issues involved we then proceed to assess quantitatively whether employer firm size has an impact on the ethical reasoning of tax practitioners using a tax context specific adaptation of a well known and validated psychometric instrument the defining issues test

tax avoidance as a sustainability problem this manuscript proposes that tax avoidance can be better understood and mitigated as a sustainability problem tax avoidance is not just a financial problem for tax authorities but one that erodes critical common spaces necessary for the smooth functioning of regulatory compliance organizational integrity and society defining tax avoidance as a sustainability problem offers a broader and more holistic understanding of the organizational and societal consequences of tax avoidance behavior sustainability is also a mature and legitimized concept that can readily incorporate taxation a variety of established sustainability metrics have the capacity to incorporate anti tax avoidance measures or publicize firms that engage in fair tax practices this manuscript concludes that integrating sustainability principles in conjunction with important extant work on corporate social responsibility and taxation can advance the goals of decreasing the occurrence and acceptability of tax avoidance

the costs of tax havens evidence from industry level data multinational enterprises make use of tax havens to avoid paying corporate income taxes and this costs 100 billion usd and more in lost government revenue worldwide according to an increasing numbe

wealth inequality in the united states since 1913 evidence from capitalized income tax data this paper combines income tax returns with flow of funds data to estimate the distribution of household wealth in the united states since 1913 we estimate wealth by capitalizing the incomes reported by individual taxpayers accounting for assets that do not generate taxable income we successfully test our capitalization method in three micro datasets where we can observe both income and wealth the survey of consumer finance linked estate and income tax returns and foundations tax records wealth concentration has followed a u shaped evolution over the last 100 years it was high in the beginning of the twentieth century fell from 1929 to 1978 and has continuously increased since then the rise of wealth inequality is almost entirely due to the rise of the top 0 1 wealth share from 7 in 1979 to 22 in 2012 a level almost as high as in 1929 the bottom 90 wealth share rst increased up to the mid 1980s and then steadily declined the increase in wealth concentration is due to the surge of top incomes combined with an increase in saving rate inequality top wealth holders are younger today than in the 1960s and earn a higher fraction of total labor income in the economy we explain how our ndings can be reconciled with survey of consumer finances and estate tax data

tax morale affects tax compliance evidence from surveys and an artefactual field experiment our working hypothesis is that cross cultural differences in tax compliance behavior have foundations in the institutions of tax administration and citizen assessment of the quality of governance tax compliance being a complex behavioral issue its investigation requires use of a variety of methods and data sources results from artefactual field experiments conducted in countries with substantially different political histories and records of governance quality demonstrate that observed differences in tax compliance levels persist over alternative levels of enforcement the experimental results are shown to be robust by replicating them for the same countries using survey response measures of tax compliance

a social contract account for csr as an extended model of corporate governance i rational bargaining and justification this essay seeks to give a contractarian foundation to the concept of corporate social responsibility csr meant as an extended model of corporate governance of the firm it focuses on justification according to the contractarian point of view leaving compliance and implementation problems to a related article sacconi 2004b forthcoming in the journal of business ethics it begins by providing a definition of csr as an extended model of corporate governance based on the fiduciary duties owed to all the firm s stakeholders then by establishing the basic context of incompleteness of contracts and abuse of authority it analyses how the extended view of corporate governance arises directly from criticism of the contemporary neo institutional economic theory of the firm thereafter an application of the theory of bargaining games is used to deduce the structure of a multi stakeholder firm on the basis of the idea of a constitutional contract which satisfies basic requirements of impartial justification and accordance with intuitions of social justice this is a sequential model of constitutional bargaining whereby a constitution is first chosen and then a post constitutional coalition game is played on the basis of the unique solution given to each step in the bargaining model the quest for a prescriptive theory of governance and strategic management is accomplished so that i am able to define an objective function for the firm consistent with the idea of csr finally a contractarian potential explanation for the emergence of the multi fiduciary firm is provided

tax competition with parasitic tax havens we develop a tax competition framework in which some jurisdictions called tax havens are parasitic on the revenues of other countries the havens use real resources to help companies camouflage their home country tax avoidance and countries use resources in an attempt to limit the transfer of tax revenues to the havens the equilibrium price for this service depends on the demand and supply for such protection recognizing that taxes on wage income are also evaded we solve for the equilibrium tax rates on mobile capital and immobile labor and we demonstrate that the full or partial elimination of tax havens would improve welfare in non haven countries in part because countries would be induced to increase their tax rates which they have set at inefficiently low levels in an attempt to attract mobile capital we also demonstrate that the smaller countries choose to become tax havens and we show that the abolishment of a sufficiently small number of the relatively large havens leaves all countries better off including the remaining havens

evaluating stakeholder theory this paper is the third in a series of four that is directed at understanding and assessing stakeholder theory for the purposes of business ethics it addresses the suitability and viability of the theory rejecting objections of a moral and efficiency sort based respectively on claims about property rights and the economic superiority of the alternative stockholder approach but accepting that implementation problems require limiting both the number of groupings admitted to stakeholder status and the degree of responsibility towards them the conclusion looks forward to the construction of a suitably limited version of the stakeholder approach in a fourth paper drawing upon this one and the previous two

fairness in international trade and investment north american perspectives this article reviews the practices and differing sets of attitudes north americans have taken with respect to fairness in international trade and proposes a set of common considerations for ongoing debates about these matters after reviewing the asymmetrical relations between canada the united states and mexico and the impact of multilateral trade agreements on bilateral trade between these countries the article looks at four typical normative views with respect to trade held by north americans these views variously emphasize concerns for protectionism liberal fair play distributive justice and dissent in the name of the environment or the working classes acknowledging that the debates over what is fair are not likely to be easily resolved we call for open political processes that allow these debates to proceed and we identify five common points of reference that might usefully inform these debates these comprise 1 respect for flexibility 2 the importance of institutions 3 greater attention to the commutative justice principles for fair exchanges and corresponding guarantees so that all countries possess basic power to bargain on their own behalf 4 the need to find fitting balance between local national regional and international trade and 5 more concern for the ways false pricing and abusive transfer pricing distort international trading relations

costing an international public good the case of the baltic sea abstract the paper discusses an economically efficient and internationally equitable provision of a specific public good the good in question the baltic sea satisfies a number of needs but economic values implied may be different in various countries polluting and using the sea the level of eutrophication has been identified as a key characteristic of the baltic sea relevant for its value the chander tulkens model of cost sharing is used to determine a hypothetical allocation of abatement costs across the countries around the sea the application of the model is based on estimates of national abatement costs as well as national willingness to pay for reduced eutrophication estimating willingness to pay in a collection of countries some of which undergo a transition from centrally planned systems has been the main challenge of this study the results were derived from a coordinated series of contingent valuation surveys in lithuania poland and sweden combined with benefit transfer studies to cover the rest of the region predictions of cost sharing schemes obtained from the chander tulkens model are confronted with actual data on abatement expenditures and international assistance several recommendations on how to optimize the baltic wide programmes conclude the paper