does survey recall error explain the deaton paxson puzzle using recall and diary food expenditure data from canada we compare estimates of the household size elasticity of per capita food expenditure in contrast to gibson 2002 we find negative elasticities in both recall and diary data this in turn means we find evidence of the deaton paxson puzzle in both diary and recall data recall error cannot be the sole explanation of the puzzle

do tax allowances stimulate investment considerable empirical work on investment behavior makes use of a capital cost variable to capture the effects of various corporate tax allowances the assumption behind most of this work is that all available tax allowances may be claimed by the firms however there are several reasons why this may not be true one purpose of this paper is to explore the effect on capital cost of assuming that firms have unused tax allowances and that the investment funds system if system is not used to finance marginal investments during periods of if releases another purpose is to construct econometric investment functions in order to compare the performance of alternative definitions of capital cost in fact the hypothesis that tax allowances do not have the effect on capital cost implied by a mechanical interpretation of statutory tax rules cannot be rejected in particular if releases may raise the return on intramarginal investment rather than create investment incentives

business political power the case of taxation we examine contending views about the forms and mechanisms of business power in u s politics by estimating time series models explaining taxation and redistribution taxation and redistribution constitute strong cases for theories about business and class power since all firms have an interest in reducing taxation we find that changes in corporate taxation and in redistribution between capital gains income and earned income and between corporate taxation and individual taxation are strongly influenced by political partisanship with democratic administrations increasing the tax burden on firms and their owners how far corporations engage in electoral financing measured through the establishment of corporate political action committees is also influential the models show some evidence consistent with the understanding of class power conceptualized by bowles gordon and weisskopf and the presence of election cycle effects but inconsistent with implications arising from the structural dependence of the state on capital and asset concentration in the largest corporations as a mechanism of class power

regional policy incentives and the relative costs of capital in assisted areas in britain and germany bennett r j and krebs g 1989 regional policy incentives and the relative costs of capital in assisted areas in britain and germany reg studies 23 201 218 regional policies of various forms have been employed in most european countries both as means of stimulating investment in problem regions and as an attempt to limit the pace of industrial contraction this paper evaluates the resulting incentives to capital in britain and germany and compares the stimulus provided by the different packages of incentives over time and between the two countries it is demonstrated that pre tax real rates of return and fiscal wedges between pre and post tax real rates of return are affected very markedly by the incentive packages in britain fiscal wedges of 3 derive from regional policy up to the late 1970s but decline to 1 6 in the mid 1980s in germany fiscal wedges increase from 3 to 3 5 over the same period on a standardized basis of comparison thus declines in the significance of regional po

why are households that report the lowest incomes so well off we document that households in the uk with extremely low measured income tend to spend much more than those with merely moderately low income this phenomenon is evident throughout three decades worth of microdata and across different employment states levels of education and marital statuses of the likely explanations we provide several arguments that discount over reporting of expenditure and argue that under reporting of income plays the major role in particular by using a dynamic model of consumption and saving and paying special attention to poverty dynamics we show that consumption smoothing cannot explain all the apparent dissaving

optimal taxation of business and individual incomes abstract this paper applies the optimal taxation approach to two versions of fisher s consumption and investment model it then shows that eliminating the business or corporation income tax through full integration of this tax with the individual income tax is non optimal by both efficiency and equity standards in the case where business investment is financed completely by borrowing the business income tax should be assigned to the goal of raising revenue efficiently and the individual tax is associated only with the equity objective

the repatriation incentive of the foreign dividend exemption system abstractdue to the high taxation of domestic corporate income japanese multinational enterprises have avoided to repatriate foreign profits to japan for quite some time as a consequence the japanese government introduced a new taxation system in 2009 the so called dividend exemption system which was aimed at reducing the effective tax burden of foreign dividends of japanese multinational companies in order to increase tax revenue and stimulate economic growth applying a theoretical framework which allows comparing the repatriation incentive of the old and new japanese tax systems we find that in the long run the tax regime change fails to incentivize foreign subsidiaries to repatriate foreign profits especially subsidiaries with high leverage located in countries with low corporate taxes and low dividend taxes might reinvest rather than distribute their earnings in the dividend exemption method

measuring the deadweight loss from taxation in a small open economy a general method with an application to sweden the paper develops a simple general equilibrium framework for calculating the marginal deadweight loss from taxation in a small open economy the framework allows a decomposition of the deadweight loss from each tax instrument into the losses stemming from the contraction of the different tax bases the paper describes a method of calibrating the model which exploits the links between the various factor supply elasticities implied by the standard life cycle model it also develops a method of estimating effective tax rates that is consistent with optimising household and firm behaviour to illustrate how the model works it is calibrated to a data set for sweden the quantitative results highlight the importance of accounting for the interaction between the major tax bases when estimating deadweight loss

can permanent income theory explain cross sectional consumption patterns the prediction that consumption income ratios should decline as income rises in cross sectional data is a feature of friedman s 1957 permanent income hypothesis and other consumption smoothing models the theory thus provides a link between longitudinal income data and cross sectional expenditure data given measured income variability and a functional relationship between consumption and permanent income we predict cross sectional expenditure patterns and compare those predictions to actual values our approach cannot explain the actual skewness in consumption income ratios under even the strictest consumption smoothing model which implies that income measurement error or other anomalies are affecting the data

imputing rent in consumption measures with an application to consumption poverty in canada 1997 2009 we consider two econometric problems in the measurement of poverty both relating to rent imputation first we account for quality differences correlated with selection into owner occupied versus rental tenure this correction increases estimated household consumption by 5 over uncorrected estimates and decreases estimated poverty rates quite dramatically second we propose that measurement error induced by the imputation be corrected by imputing a consumption distribution rather than a consumption level for each household this correction increases estimated poverty rates slightly we use our methods to measure consumption poverty in canada and find that the imputation strategy used influences the patterns observed for example measured poverty among the elderly barely declines when one uses our methods in contrast to the almost 6 percentage point reduction we find using traditional methods in our assessment of the over time evolution of consumption poverty we find that substantial progress has been made on overall poverty and on child poverty but that poverty among the elderly hardly changed imputer le loyer dans les mesures de consommation une application a la pauvrete de consommation au canada 1997 2009 les auteurs considerent deux problemes econometriques dans la mesure de la pauvrete tous deux relies a l imputation du loyer d abord on prend en compte les differences de qualite liees au choix entre logement occupe par son proprietaire et logement locatif la correction accroit le niveau de consommation des menages de 5 par rapport aux estimations non corrigees et diminue les taux de pauvrete estimes de maniere dramatique ensuite on suggere que l erreur de mesure introduite par l imputation soit corrigee en derivant une distribution de consommation plutot qu un niveau de consommation pour chaque menage cette correction augmente la pauvrete estimee un peu les auteurs utilisent leurs methodes pour mesurer la pauvrete de consommation au canada et decouvrent que la strategie d imputation utilisee influence les patterns observes par exemple la pauvrete mesuree chez les aines diminue a peine quand on utilise leurs methodes contrairement a la diminution de presque 6 que proposent les methodes traditionnelles dans leur evaluation de l evolution de la pauvrete de consommation dans le temps ils decouvrent qu on a fait des progres substantiels pour ce qui est de la pauvrete en general et de la pauvrete des enfants mais que la pauvrete chez les aines n a a peu pres pas change

growth effect of taxes in an endogenous growth model to what extent do taxes affect economic growth abstract this paper presents an endogenous growth model comprising of financial human and physical capital and incorporating major features of a general tax system technology and preference parameter values in the model are chosen to fit the actual growth experiences of the united states and a rapidly growing east asian nic using the calibrated model i assess the role of differences in taxes and other variables in explaining the difference in growth rates the main findings are i the difference in tax systems across countries explains a significant proportion around 30 of the difference in growth rates ii the difference in preferences explains at most 4 and iii differences in labor income tax debt equity ratio and inflation can be important in explaining the growth difference further i evaluate the contribution of the monetary factor to the growth rate gap and the growth effect of us tax reforms e g revenue neutral changes in relative tax structure

welfare and optimum dynamic taxation of consumption and income abstract this paper estimates that the us could attain large welfare gains by implementing an optimal ramsey tax policy that taxes consumption and income it is also found that the welfare implications associated with taxing consumption are quantitatively more important than those associated with dynamically taxing income indeed replacing income taxes with a constant consumption tax leads to a welfare gain that is only slightly lower than that attained by a dynamic policy that taxes consumption and income in computing these welfare gains careful attention is given to the dynamic path of tax rates and the transitional dynamics associated with how the economy responds to a new tax policy

causality in crude oil prices crude oil markets witness growing disparity between the quality of crudes supplied and demanded in the market the market share of low quality crudes is increasing due to the depletion of old fields and increasing demand this is unnerving the practitioners and affecting the relevance of the traditional benchmark crudes due to the lack of lower quality benchmarks montepeque 2005 in this article we apply granger causality tests to study the price dependence of 32 crudes in order to establish which crudes drive other prices and which ones simply follow general market trends our results indicate that some of the old benchmarks are still relevant while others can be disregarded our results also interestingly show that the low quality mediterranean russian urals crude introduced in the late 1990s has emerged recently as a significant driver of global prices

risk transmission mechanism between energy markets a var for var approach abstract the global financial crisis gfc of 2007 2009 that originated in the us has revealed the need for measuring and monitoring the transmission of extreme downside market risk this paper investigates the risk transmission mechanism between the oil and natural gas markets we apply the recently introduced test statistics based on cross quantilogram function and the multivariate quantile regression model var for var to the us oil and natural gas prices which are independently formed our results show two asymmetric patterns first the shocks in the oil market substantially increase the value at risk var in the natural gas market but the reverse impact does not exist second we highlight the significant asymmetric response of gains and losses transmission in energy markets cautioning about the underlying weakness of adopting volatility to measure risk in the energy market moreover an extreme market risk is more easily transmitted across markets than moderate risks our results are in general robust in application to other regional energy markets such as europe and asia but the heterogeneities in responses are underpinned by the different role of natural gas in regions the findings in this paper have important implications for academic researchers policy makers in gas dependent economies and business practitioners in light of projected increases in the use of natural gas worldwide as well as the development of independent gas on gas competitive hub prices in asia and europe

corporate tax holidays and investments governments of developing countries commonly adopt tax holidays to encourage investment this article evaluates the incentives provided by company income tax holidays and explains the importance of the timing of depreciation allowances in determining the effective tax rates and the cost of capital to firms considering additional investment during the holiday if an asset is long lived and depreciation allowances for tax purposes are accelerated the tax holiday by preventing depreciation deductions during the periods of peak profits may actually penalize a company for investing during the holiday the closer the investment to the end of the holiday period the more severe the penalty if instead depreciation allowances may be deferred until after the holiday this program of incentives is quite generous to the firm how these sharply contrasting results may emerge is illustrated through estimation of effective tax rates and user costs of capital under tax holiday systems in bangladesh cote d ivoire malaysia morocco and thailand

the effectiveness of tax incentives for r d i in developing countries the case of argentina abstract there is increasing interest in developing countries in granting tax incentives in order to encourage private investment in research development and innovation r d i however evidence on the effectiveness of such schemes in achieving policy goals in weak innovation systems contexts is still very scarce this paper aims at narrowing this knowledge gap by focusing on the effects of a tax credit scheme for promoting firm level innovation investment in argentina the analysis applies dynamic panel data techniques to a novel dataset merging several waves of the national innovation survey collected by the national institute of statistics and censuses the results suggest that the elasticity of r d i investment to its user cost of capital is a greater than 1 in absolute terms which implies that the intervention has been effective in increasing firms innovation efforts however effects vary depending on the type of innovation investment being subsidized industrial sector and size of the firm moreover when innovation investment is divided into innovation related capital goods expenditures and only r d the results suggest that the absolute value of the elasticity for the r d component of the innovation investment is less than 1 these heterogeneous effects should be exploited for further policy design

the incentives to capital in the uk enterprise zones this paper provides a systematic assessment of the incentives to capital investment in uk enterprise zones it compares different investment projects between industrial sectors types of asset sources of finance and type of investor using the costs of capital methodology in addition micro economic and macro economic effects are compared as are ezs in round 1 and round 2 and the relative importance of capital allowances and property tax relief is considered the paper demonstrates that capital allowances are the more important incentive particularly in round 2 ezs the greatest incentives are to building assets for commerce financed by debt and tax exempt institution the greatest benefits offer an increase of between 7 6 and 8 7 in real rates of return on investments

dividend taxation in firm valuation new evidence in this paper we develop a residual income model showing how taxes on dividends affect the relative valuation of retained earnings versus contributed equity as well as the value of expected future earnings tests of predictions from our model for a sample of compustat firms from 197594 suggest that overall firm value and the relative valuation weights investors assign to retained earnings contributed equity and current earnings all critically depend on dividend taxes the findings also suggest that investors take a proprietary perspective in valuation and impute an unrecorded shareholder level tax liability on retained earnings the u s tax system subjects retained earnings to dividend taxes upon distribution to shareholders while contributed equity is returned to shareholders as a nontaxable return of capital from the shareholder s proprietary perspective therefore retained earnings should be valued on

internationalization and changes in tax policy in oecd countries the importance of domestic veto players this article examines the role that economic and political factors played in tax reform in organization for economic cooperation and development oecd countries from 1986 to 1990 some writers argue that economic integration forced states to reform their tax systems the authors findings indicate that economic openness had an indirect effect on the level of change in marginal tax rates the institutional structure of a country was most important countries that had only one veto player or only one institution or party whose approval was necessary for a bill to become law enacted more sweeping reform than states that had more than one veto player these results suggest that even when international or domestic economic factors might dictate a change in policy reform will not be as sweeping in countries in which agreement among several institutions and or parties is necessary

spillover effects in energy futures markets price discovery in crude oil and refined oil products has been extensively undertaken in organised futures markets for over a decade now there are two dominant such markets today the first one in the new york mercantile exchange and the second in london s international petroleum exchange with the demise of opec as the leading price setter for crude and products nymex light sweet crude and brent crude have usurped the role of benchmark grades for price setting to date considerable work has been done to scrutinise the degree to which these two markets price efficiently but little with regard to the way the two markets interact participants in these markets move with relative ease from one market to the other and usually take positions in both of them it is of interest therefore to investigate the information transmission mechanism by looking at spillover effects and perhaps identify which market is the true price leader this paper is a first attempt to look at such a problem in the energy market although similar studies have been done on stock market indices it is found that substantial spillover effects do exist when both markets are trading simultaneously although ipe morning prices seem to be considerably affected by the close of the previous day on nymex q 2001 elsevier science b v all rights reserved

testing for short termism in the uk stock market this paper uses data on the stock market valuations of a large sample of uk companies to assess if that market displays short termism tests are undertaken of whether discount rates implicit in market valuations applied to cash flows which accrue in the longer term are too high both absolutely and relative to the rates applied to cash flows in the near term i find prima facie evidence that these longer term discount rates are too high a result consistent with the existence of short termism an alternative interpretation of the results is that risk premia applied to expected cash flows systematically increase with the maturity of those flows whether this interpretation is consistent with asset pricing theories is questionable copyright 1993 by royal economic society

heterogeneity biases distributional effects and aggregate consumption an empirical analysis using stratified microdata using stratified microdata from the canadian famex 78 86 surveys this paper investigates whether observed heterogeneity in marginal propensities to consume across strata actually hinders the aggregation process despite significant heterogeneity in marginal responses the divergences between aggregate predicted consumption and the predictions from a model that uses average strata responses are found to be small whenever the strata demands are approximatively linear at the mean and the commodity group considered is not a luxury good on the other hand some cross sectional estimates obtained by pooling the strata are shown to be contaminated by unwanted cross moments further the analysis reconciles the fact that while there exists significant heterogeneity in consumer demands the related distributional effects in the aggregate equation have not been found to be important

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

the importance of reporting conventions for the theory of corporate taxation abstract this paper shows that for the analysis of a tax policy it is important to be explicit about the reporting convention to which a corporation tax is required or allowed to adhere the paper shows that the corporation tax cannot be used to alter capital formation under uniform reporting a convention required by the majority of the oecd countries this tax is however a more useful policy tool in those oecd countries that have created the privilege of separate reporting fiscal depreciation makes the marginal valuation of equity differ from the marginal valuation of capital use of tax allowances directed to investment stimulus operates rather differently under the two reporting conventions

semiparametric estimation and consumer demand this paper considers the implementation of semiparametric methods in the empirical analysis of consumer demand the application is to the estimation of the engel curve relationship and uses the british family expenditure survey household composition is modelled using an extended partially linear framework this is shown to provide a useful method for pooling non parametric engel curves across households of different demographic composition c 1998 john wiley sons ltd

dividend taxation and equity value the canadian tax changes of 1986 the 1986 canadian federal budget which increased the tax rate on dividends vis a vis capital gains provides a natural experiment for examining the relationship between taxation and asset values the authors employ a stock market event study to investigate the differential impact of this tax change on high and low dividend securities to control for other new information contained in the budget they focus on companies that issue both preferred high dividend stocks and common low dividend stocks the authors find that abnormal returns are negatively related to dividend yields which provides support for the hypothesis that taxes affect stock prices

how effective are fiscal incentives for r d a review of the evidence this paper surveys the econometric evidence on the effectiveness of fiscal incentives for r d we describe the effects of tax systems in oecd countries on the user cost of r d the current position changes over time and across different firms in different countries we describe and criticize the methodologies used to evaluate the effect of the tax system on

viewpoint further results on measuring the well being of the poor using income and consumption we evaluate the relative merits of income and consumption based measures of well being our results provide evidence that consumption better captures well being for those with few resources the bottom deciles of expenditures exceed those of income suggesting under reporting of income the under reporting rate for government transfers is high and rising overall non response is more severe in u s income data than in expenditure data furthermore a consumption data set requires fewer observations than an income data set to obtain the same level of precision for typical estimates finally very low consumption is more strongly related to other bad outcomes than very low income on evalue les merites relatifs des mesures de bien etre fondees sur le revenu et la consommation les resultats montrent que la consommation mesure mieux le bien etre de ceux qui ont peu de ressources les deciles au bas de la distribution des depenses depassent les deciles de la distribution des revenus ce qui suggere qu il y aurait des revenus non rapportes le taux de sous declaration des transferts gouvernementaux est eleve et croissant le taux global de non reponses est plus important aux etats unis pour les revenus que pour les depenses de plus les bases de donnees sur la consommation requierent moins d observations que celles sur le revenu pour obtenir le meme degre de precision des evaluations typiques finalement une tres basse consommation est plus fortement co reliee a d autres mauvaises conditions qu un tres bas niveau de revenu

share repurchases the new view and the cost of capital this paper counters the view that the possibility of share repurchases invalidates the predictions of the new or trapped equity view of corporate taxation it is shown that the new view s basic cost of capital expression which distinguishes it from the old view remains valid regardless of the proportions in which corporate distributions of earnings split into share repurchases and ordinary dividend payments it is widely held that the new view of corporate taxation put forward by auerbach 1979 1983 l3radford 1981 king 1977 fullerton and king 1984 and others is incompatible with the phenomenon of share repurchases share repurchases it is maintained undermine this view s basic premise that the corporate firm is an equity trap and thus invalidate its predictions of the firm s investment behavior in my letter i argue that this verdict may be premature while i certainly do not want to claim to have isolated the forces that determine the firm s choice between dividend payments and share repurchases i hesitate to accept the argument that the invalidity of one of a theory s assumptions will necessarily render its predictions incorrect to be precise i will show that the new view s basic cost of capital expression that distinguishes it from the old view stays valid regardless of the proportions in which corporate distributions of earnings split into share repurchases and ordinary dividend payments consider a stylized class of capital income tax systems that resembles the class operative in the 0ecd countries let 7r be the rate of corporate tax on retained earnings rd the rate of corporate tax on dividends which equals rr in the us rc the effective rate of tax on accrued capital gains rdp the rate of personal tax on dividend income and 7 the rate of personal tax on interest income where

the implications of risk and irreversibility for the measurement of marginal effective tax rates on capital the implications of risk and irreversibility for the measurement of marginal effective tax rates on capital are examined it is shown that when capital is irreversible the marginal effective tax rate is an increasing function of systematic and unsystematic capital and income risk the tax system may thus distort investments in risky capital to a much greater extent than is implied by previous research that ignored irreversibilities marginal effective tax rate calculations based upon the canadian corporate tax system are provided

measuring marginal income tax rates for individuals in canada averages and distributions over time average marginal tax rates amtrs and the dispersion of marginal tax rates across income groups for canada over 1947 91 are reported federal amtrs fluctuated with little trend from 1947 to the mid 1960s rose to the mid 1970s fell and then rose from the early 1980s through to 1991 federal plus provincial amtrs trended upward after 1949 increasing fastest from the mid 1960s to the mid 1970s relative dispersion of mtrs shows a strong downward trend over the sample period this compression has been due partly to a decline in top mtrs but the main influence has been the steady increase in the portion of the population and of income subject to tax the amtr time series is quite volatile difference stationarity is not rejected

the investment funds system reconsidered this paper studies the effects of the swedish investment funds system if on the cost of capital it is shown that the incentive effects critically depend on which regime the firm is in when the funds are released by the government and which regime it expects to be in in the future for quite reasonable assumptions if releases turn on to have much less impact on the incentive to invest than conventionally assumed

are there cultural effects on saving some cross sectional evidence why are there such large differences in saving rates across countries conventional economic analyses have not been successful in explaining international saving differences so economists have sometimes suggested that national saving differences may be explained by cultural differences this paper tests the hypothesis that cultural factors influence saving by comparing saving patterns of immigrants to canada from different cultures using data from the canadian survey of family expenditures we find no evidence of cultural effects on saving

taking prices seriously in the measurement of inequality abstract in the measurement of inequality adjustments for differences across households in their demographic composition and in the price regimes they face are usually very simple often nominal expenditure or income is adjusted with an expenditure independent price deflator and a price independent equivalence scale i show that using more flexible expenditure dependent price deflators and price dependent equivalence scales affects the level of and trend in measured family expenditure inequality in canada over 1969 1997 for example standard methods show a significant decrease in inequality between 1969 and 1978 but more flexible methods show a significant increase in inequality over this period

measuring the well being of the poor using income and consumption we examine the relative merits of consumption and income as measures of the material well being of the poor consumption offers several advantages over income because consumption is a more direct measure of well being than income and is less subject to underreporting bias measurement problems with income are problematic for analyses of changes in well being of the poor because the biases appear to have changed over time and are correlated with government policies on the other hand income is often easier to report and is available for much larger samples providing greater power to test hypotheses we begin by considering the conceptual and pragmatic reasons why consumption might be better or worse than income then we employ several empirical strategies to examine the quality of income and consumption data first we compare income and consumption reports for those with few resources as well as their assets and liabilities to examine measurement errors and under reporting second we examine other evidence on the internal consistency of reports of low income or consumption third we compare how well micro data in standard datasets weight up to match aggregates for classes of income and consumption that are especially important for low resource families fourth we validate income and consumption measures by comparing them to other measures of hardship or material well being although the evidence tends to favor consumption measures our analyses suggest that both measures should be used to assess the material well being of the poor

time varying granger causality tests for applications in global crude oil markets abstract this paper proposes time varying granger causality tests based on the tests developed by hong 2001 and two dynamic correlation estimators i e rolling correlation and dynamic conditional correlation multivariate garch here called the rolling hong and dcc mgarch hong tests respectively the proposed tests are used to examine time varying information spillover among global crude oil markets the results provide empirical evidence of time varying information spillover in particular the instantaneous causal effects of dubai and tapis crudes on brent and wti become stronger when a major event or events occur in major oil producing countries such events include the iraq war in march 2003 opec s announcement of a record production cut in december 2008 and the libyan civil war in early 2011 and consistent with previous studies wti and brent play dominant roles in global crude markets impulse response analysis shows that market information has a positive influence on the spillover effect in global crude oil markets moreover the dcc mgarch hong test consistently leads the rolling hong test which indicates that the former performs better

welfare aspects of current u s corporate taxation the corporate income tax has provided a steadily declining fraction of federal revenues during the postwar era accounting for 23 0 percent during fiscal year 1966 and 14 2 13 9 and 10 2 percent in 1971 1976 and 1981 respectively however for several reasons aggregate tax collections are of limited use in measuring the distortionary impact of the corporate tax first one must allow for cyclical and potentially long run changes in the rate of profit to measure changes in average tax rates more fundamental problems lie in attempts to relate such an average tax rate to the desired measure the marginal tax rate assets of different age cohorts historically have faced different tax schedules because of a succession of nonretroactive tax law changes average tax rates on current income represent an amalgam of such tax rules furthermore even with a constant tax schedule the taxable income which serves as the base of the corporate tax diverges systematically from economic income because of the investment tax credit and the acceleration of depreciation allowances relative to actual economic depreciation an asset typically receives deductions and credits that are more than sufficient to shelter all income associated with it in the years immediately after purchase but faces a tax base exceeding economic income in more distant years after all depreciation allowances have been used up this implies that taxes will vary as a fraction of income depending on the age structure of assets fast growing firms will face low and potentially negative average tax rates on current income though facing the same tax schedule as stagnant firms with positive current tax payments this ignores the further complications that arise from the asymmetric treatment accorded gains and losses which i discuss below finally there may be serious distortions in the allocation of capital within the corporate sector that aggregate tax rates average or marginal cannot measure these difficulties have led to the general use and acceptance of the effective tax rate to measure the distortionary effects of the tax system this rate is based on a comparison of beforeand after tax internal rates of return on investment projects letting rg and rn be these two measures we define the effective tax rate to be

internationally mobile firms and tax policy abstract this paper analyses how the government should tax internationally mobile firms the analysis finds that if tax authorities are unable to observe firms true mobility and domestic and foreign profitability are uncorrelated then 1 information rents are acquired by immobile inefficient firms and 2 the optimal policy will stimulate investment in the immobile sector compared to the complete information case another result of the paper is that the optimal allocation is implementable within the framework of a corporate income tax system where mobile firms self select more unfavourable capital allowances than immobile firms

effects of corporate tax reforms on smes investment decisions under the particular consideration of inflation corporate tax reforms carried out in eu countries since 1980 entail lower statutory tax rates and reductions in generous tax depreciation provisions several countries including the uk have reduced tax rates for small and medium sized enterprises smes this study compares incentive effects of such reforms on the smes investment decisions adopting a simple present value model ceteris paribus tax rates and depreciation rules vary in the model simulation while the application of historical cost accounting method in inflationary phases leads to fictitious increases in nominal net present value apart from the construction of international ranking country specific patterns of reform effects are also illustrated

what is the income cost of a child exact equivalence scales for canadian two parent families this note asks how much income does it take to preserve the prechild standard of living for all members of the postchild household equivalence scales for canadian two parent families are estimated using a complete demand system approach and imposing the condition of equiva lence scale exactness independent of a base blackorby and donaldson 1993 lewbel 1989 this approach has several advantages 1 it is formally grounded in economic theory 2 the income required for children can be estimated without ignoring the well being of the children themselves 3 the estimates obtained appear reasonable relative to others currently available in the literature

redistribution and education subsidies are siamese twins abstract we develop models of optimal linear and non linear income taxation with endogenous human capital formation to explore optimal education subsidies optimal subsidies on education ensure efficiency in human capital accumulation and thus play an important role in alleviating the tax distortions on learning induced by redistributive policies if the government cannot verify all investments in human capital education policy offsets some but not all tax induced distortions on learning non pecuniary educational costs benefits may increase decrease subsidies on education especially if they are complementary to work effort

tax policy uncertainty and corporate investment abstract the anticipatory effects of a corporate tax reform of the tax cut cum base broadening variety are analyzed in a dynamic stochastic adjustment model of firm behavior focusing on the case where the firm is uncertain both about the timing and the contents of the expected reform the value of the firm is solved prior to and after the reform the existence of investment spurts prior to the implementation of the tax reform is established rigorous results are derived under constant returns and the effects of diminishing returns are explained the expectation of a future tax cut causes the firm to accelerate optimal investment while the expectation of a reduction in the tax base the rate of fiscal depreciation has the opposite effect for a firm which updates information timing uncertainty interacts with the expectation effect moreover increased timing uncertainty may accelerate or decelerate investment as an optimal response to an expected tax cut futhermore for reasonable assumptions it is shown that a rate cut cum base broadening tax reform of the type implemented in several oecd countries in the 1980s and 1990s cannot be revenue neutral

the role of subsidies in promoting italian joint ventures in least developed and transition economies this paper analyses the impact of subsidies to promote italian joint ventures jvs with firms in ldc and transition economies the empirical analysis is carried out on a unique dataset of 172 jvs interviewed during 1998 by means of a closed answer qualitative quantitative questionnaire the main finding of the study is that although there is a significant deadweight component in incentive policy subsidised firms are significantly more likely to grow moreover jvs comprising new firms which need to grow to survive also achieve a higher than average employment performance and so too do labour intensive jvs motivated by the search for lower labour costs and jvs in east european countries

the effects of welfare and tax reform the material well being of single mothers in the 1980s and 1990s abstract the tax and welfare programs that provide income and in kind benefits to single mothers have changed dramatically in recent years these changes began as far back as the mid 1980s and culminated with the 1996 welfare law that ended welfare as we knew it these tax and welfare changes have sharply increased the employment of single mothers and cut welfare rolls however little is know about the effects of these policy changes on the material well being of single mothers and their children studies of those leaving welfare have found that a substantial percentage have problems paying rent purchasing enough food and paying utility bills other studies found a decline in income among the worst off single mothers after 1994 or 1995 the goal of this paper is to examine the material well being of single mothers and their families before and after recent welfare and tax reforms using data from two nationally representative household surveys we examine the consumption patterns of single mothers and their families from 1984 2000 we find that the material conditions of single mothers did not decline in recent years either in absolute terms or relative to single childless women or married mothers this pattern holds for the average single mother as well as for low educated single mothers at both the 15th and 25th percentiles of the consumption distribution in most cases our evidence suggests that the material conditions of single mothers have improved slightly

the tale of the tails canadian income inequality in the 1980s and 1990s we present new evidence on levels and trends in after tax income inequality in canada between 1980 and 2000 we argue that existing data sources may miss changes in the tails of the income distribution and that many of the changes in the income distribution have been in the tails for this reason we turn to an alternative source in particular we construct data on after tax and transfer income using census files augmented with predicted taxes based on information available from administrative tax data using these data we find that canadian after tax inequality levels are substantially higher than has been previously recognized primarily because income levels are lower at the bottom of the distribution than in commonly used survey data we also find larger long term increases in after tax income inequality and far more variability over the economic cycle this raises interesting questions about the role of the tax and transfer system in mitigating both trends and fluctuations in market income inequality les auteurs presentent de nouveaux resultats sur les niveaux et tendances de l inegalite des revenus apres impots au canada entre 1980 et 2000 on suggere que les donnees existantes peuvent avoir ignore des changements dans les extremites de cette distribution alors que le gros des changements y etait concentre pour cette raison les auteurs se sont tournes vers une autre source de donnees ils ont construit une base de donnees sur les revenus apres impots et les paiements de transfert en utilisant les donnees du recensement ainsi que des donnees additionnelles sur les impots prevus a partir de renseignements disponibles dans les dossiers administratifs on decouvre que les niveaux d inegalite des revenus apres impots sont beaucoup plus eleves que ce qu on a suggere jusqu ici d abord parce que les niveaux de revenus sont plus bas au pied de la distribution que ne le suggerent les donnees d enquetes on decouvre aussi un accroissement plus grand a long terme de l inegalite des revenus apres impots et une plus grande variabilite au cours du cycle economique voila qui souleve des questions interessantes a propos du role de la fiscalite et du systeme de paiements de transfert dans la modulation de la tendance et des fluctuations dans l inegalite des revenus du marche

taxes tariffs and transfer pricing in multinational corporate decision making three interrelated aspects of u s multinational corporation activity are analyzed here the ability to shift profits from high tax countries to low tax countries the impact of host country taxes and tariffs on the distribution of real capital and the influence of these policies on international trade patterns of the united states and host countries the cross sectional empirical analysis indicates that the observed pattern of reported profits in high and low tax countries is consistent with income shifting behavior and that real investment responds to host country effective tax rates and tariffs the united states appears both to import more from and export more to low tax countries where mnc investment is greater but this bilateral focus must be amplified to consider multilateral effects if trade benefits are to be projected copyright 1991 by mit press

effects of nymex trading on ipe brent crude futures markets a duration analysis abstract recent developments in the energy markets and the surge and dip in crude oil prices over the last few years have renewed the interest in the workings of the two main price setting markets london s international petroleum exchange ipe and new york s mercantile exchange nymex the interaction of these two markets when both of them are open synchronous trading and when only london is open asynchronous trading is important in view of the fact that most participants take positions in both markets this paper looks at how london is affected by new york by analysing the transaction duration of the ipe brent futures contract both when the nymex wti futures contract is being traded and when nymex is closed using tick by tick data obtained from ipe transaction durations are found to form two distinctive and inverted u shaped patterns autoregressive conditional duration acd model first introduced by engle and russell is applied to the data parameters of ipe morning and afternoon are significantly different from each other underlining the dominant effects of nymex on ipe trading the results from the current analysis reinforce previous results by the authors which indicate that nymex is a leading price setter in crude oil futures prices and has a dominant effect on the ipe traded contracts

the vanishing harberger triangle this paper shows that the double taxation of corporate dividends or profit repatriations implies a nucleus theory of the corporation after the firm is set up with a small stock of original capital it enters a phase of purely internal growth during which no dividends are paid and no shares are issued the phase terminates when an efficient stock of capital has been accumulated and dividends are paid during the growth phases the tax distortion is inversely related to the tax burden and it is larger than conventional formulae for the cost of internal and external equity finance suggest

the taxation of corporate investment income in canada an analysis of marginal effective tax rates this paper reports estimates of marginal effective tax rates on corporate investment income in canada taking into account sales taxes as well as corporation personal and business property taxes marginal effective tax rates are found to vary widely depending upon the type of asset acquired the industry in which the asset is used the manner in which the investment is financed and the tax status of the investor supplying the funds an examination of the sensitivity of these estimates to various tax arbitrage assumptions reveals the pattern of marginal effective tax rates to be similar irrespective of the arbitrage assumption used l imposition des revenus dinvestissement des societes au canada une analyse des taux marginaux effectifs ce memoire evalue les taux marginaux effectifs d imposition des revenus d investissement des societes au canada en tenant compte des taxes de vente aussi bien que des impots personnels et des impots sur les profits et sur les actifs des societes i1 appert que les taux marginaux effectifs d imposition varient grandement selon le type d actif acquis l industrie dans laquelle cet actif est utilise la faqon dont cet

inflation tax rules and investment some econometric evidence this paper presents econometric evidence on the effect of tax incentives on business investment in the united states in the period from 1953 through1978 the analysis emphasizes that the interaction of inflation and existing tax rules has contributed substantially to the decline of business investment since the late 1960 s because the investment process is far too complex for any simple econometric model to be convincing i have estimated three quite different models of investment behavior the strength of the empirical evidence rests on the fact that all three specifications support the same conclusion more generally the analysis and evidence show that theoretical models of macroeconomic equilibrium should specify explicitly the role of distortionary taxes especially taxes on capital income the failure to include such tax rules can have dramatic and misleading effects on the qualitative as well as the quantitative properties of macroeconomic theories this paper was presented as the fisher shultz lecture at the fourth world congress of the econometric society 29 august 1980 in aix en province this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this abstract was borrowed from another version of this item

oil prices speculation and fundamentals interpreting causal relations among spot and futures prices abstract a consensus that the world oil market is unified begs the question where do innovations in oil prices enter the market here we investigate where changes in the price of crude oil originate and how they spread by examining causal relationships among prices for crude oils from north america europe africa and the middle east on both spot and futures markets results indicate that innovations first appear in spot prices for dubai fateh and spread to other spot and futures prices while other innovations first appear in the far month contract for west texas intermediate and spread to other exchanges and contracts links between spot and futures markets are relatively weak and this may have allowed the long run relationship between spot and future prices to change after september 2004 together these results suggest that market fundamentals initiated a long term increase in oil prices that was exacerbated by speculators who recognized an increase in the probability that oil prices would rise over time

what s mine is yours the influence of male and female incomes on patterns of household expenditure this paper uses microdata from the 1992 statistics canada family expenditure survey to provide evidence that male and female incomes do not always exert identical influences on household expenditures the novelty of the paper lies in its demonstration that while incomes may be pooled for some categories of consumption e g housing the income pooling hypothesis must be rejected for others we also go beyond simply rejecting the pooling hypothesis to ask how male versus female income is used our results stress the on going importance of traditional gender roles for example we find that expenditures on child care increase only with women s incomes higher male income is not associated with higher expenditure on child care even when both spouses are full time full year paid workers

what explains the lagged investment effect abstract the best predictor of current investment at the firm level is lagged investment this lagged investment effect is empirically more important than the cash flow and q effects combined we show that the specification of investment adjustment costs proposed by christiano et al 2005 predicts the presence of a lagged investment effect and that a generalized version of their model is consistent with the behavior of firm level data from compustat

capital allocation how the us compares with other major industrialized nations data for the seven major industrialized nations spanning two decades provide evidence that capital formation as a percentage of gross domestic product differs significantly among the major industrialized nations comparatively the us ranks among the leaders in residential structures and among the lowest in commercial structures however us private sector allocation of capital to machinery and equipment appears to be in line with other major trading nations the rate of capital cost recovery appears to affect the amount of capital allocated to commercial structures but not to residential structures or machinery and equipment likewise changes in the capital cost recovery provisions under the economic recovery tax act of 1981 seem to have led to an increase in capital allocated to commercial structures and to a marginal increase in capital allocated to machinery and equipment

the incidence and allocation effects of a tax on corporate distributions abstract to study the effects of double taxation first at the corporation level then at the shareholder level this paper analyzes a model with a tax on all corporate distributions to equity owners and no other taxes contrary to the common view the tax is shown to have no subtitution effect and in particular no effect on the corporate choice between debt and equity via retained earnings finance the analysis opens to question certain arguments commonly used to support integration of corporation and individual income taxes via dividend relief

tax asymmetries the cost of capital and investment some evidence from united kingdom panel data a measure of the cost of capital is developed that incorporates the dynamic effects of tax changes and tax asymmetries estimates of the cost of capital are made using an unbalanced panel of 1987 u k quoted companies over the period 1971 to 1984 there is wide cross sectional variation in the cost of capital the measure is used in estimating an equation where this cross sectional variation is found to be a significant determinant of the level of company investment copyright 1989 by royal economic society

changes in the consumption income and well being of single mother headed families there is a long standing debate over how the material well being of the disadvantaged has changed over time in the united states this debate has intensified in light of notable increases in income inequality in the 1970s and 1980s and during the 1990s dramatic changes in welfare and tax policies that target poor families including expansions in the earned income tax credit eitc welfare waivers and the passage of the personal responsibility and work opportunity reconciliation act prwora while some championed these changes as catalysts for self sufficiency others predicted that these reforms would lead to severe deprivation 1 a large body of research has shown that these changes were associated with a dramatic fall in welfare receipt and increases in work and earnings 2 there is little consensus however on how material well being has changed during this period particularly for the most disadvantaged families such as those at the bottom of the income or consumption distribution in this paper we analyze changes in material well being between 1993 and 2003 for single mother headed families a group that has been the target of these recent changes in tax and wel fare policy for these families we analyze changes in income and total consumption as well as changes in disaggregated consumption time use and health insurance coverage we describe the underlying trends in well being for disadvantaged families during this dynamic period rather than identifying the causal effects of individual policies or macroeconomic conditions we begin by briefly documenting the recent trends in income and consumption for single mother headed families for income the trends differ sharply for different deciles of single moth ers for example between 1993 1995 and 1997 2000 reported income in the bottom decile falls by about 16 percent while reported income rises by more than 17 percent in the third fourth and fifth deciles the trends for reported consumption on the other hand tell a very different story these data show neither the sharp decline at low percentiles nor the large increases at the remaining percentiles in the bottom half of the distribution of single mothers rather we find a modest about 7 to 12 percent rise in consumption throughout the entire distribution while we do not examine the reasons for the sharp differences in income and consumption changes in this paper we do argue that consumption is a better measure of material well being for those at the bottom of the distribution

uncertainty welfare cost and the adaptability of u s corporate taxes alternative corporate tax systems differ in their ability to adapt to changes in the rate of inflation in the absence of complete indexing of depreciation allowances policymakers may use a particular expected inflation rate to set accelerated depreciation allowances in a way that minimizes the welfare loss from the misallocation of capital this welfare loss is a nonlinear function of the assumed inflation rate however so the welfare loss at the expected inflation rate may be quite different from the expected welfare loss we compute these two welfare concepts for each of three alternative corporate tax schemes in the u s and for two different relationships between inflation and interest rates one important finding is that the auerbach jorgenson first year recovery plan is not equivalent to indexing as is often claimed if uncertainty about inflation implies uncertainty about the real after tax discount rate

tax subsidies and household saving evidence from canada targeted tax based saving incentives can be a powerful tool for promoting household and national saving this study examines the effect of the cancellation of the registered home ownership savings plan rhosp a canadian tax subsidized saving program on household saving the cancellation provides exogenous variation in eligibility for the subsidy that is uncorrelated with householdspecific heterogeneity in saving behavior the empirical analysis suggests that the subsidy had a substantial impact on saving each dollar contributed to the program represented 56 93 and 20 57 cents of new household and national saving respectively

consumption inequality in canada 1997 to 2009 we assess the evolution of consumption inequality in canada over the years 1997 to 2009 we correct the imputation of shelter consumption for homeowners to allow for unobserved differences in housing quality correlated with selection into rental tenure and we account for measurement error in this imputation using the annual survey of household spending for years 1997 to 2009 we find that household level consumption inequality measured by the gini coefficient increased from 0 251 to 0 275 over 1997 to 2006 between 2006 and 2007 consumption inequality may have decreased and over 2007 to 2009 consumption inequality was flat over the entire period of 1997 to 2009 consumption inequality increased moderately the gini coefficient for individual level consumption inequality followed a similar pattern though the changes were smaller in magnitude we also explore a possible correction for tail non response bias in inequality measurement and find that the increase in measured consumption inequality is robust to this correction

evaluating the minimum asset tax on corporations an option pricing approach abstract king fullerton methodology cannot assess the minimum asset tax because it cannot handle uncertainty we present an alternative based on option pricing and show how carryover rules depreciation conventions and uncertainty affect the mat burden using brazilian data we show a because of the high intersectoral variance of returns on capital the mat does not reduce sectoral distortions b while high variance raises the mat burden high risk firms are not hit harder by the mat high risk firms also have a high rate of return which reduces the impact of the mat

short run politicians and long run tax revenue an empirical assessment a life cycle growth model fit to the u s economy is used to calculate the tax rate that would maximize steady state tax revenue the rate that would be set by a short run politician interested in maximizing current period receipts is also calculated in the current period the capital stock is fixed but labor is a variable factor following the intuition of buchanan and lee 1982 it might be suspected that this fixity of capital would lead the short run politician to set taxes above the steady state revenue maximizing level however such a conclusion does not hold for the cases considered in this study

uk stock relief legislation and the short run tax elasticity of inventory investment abstract this paper analyzes the effects of uk stock relief legislation on the cost of capital for inventory investment taking account of the tax position of individual companies a sample of large uk companies representative of the uk non oil non financial corporate sector is used to make calculations of the cost of capital both for aggregate corporate inventory investment and for various industrial sectors stock relief legislation reduces the cost of capital by between 4 and 8 per annum the tax position of individual companies generally makes only a small difference to the aggregate cost of capital stock relief legislation induces a pronounced seasonality in the cost of capital due to the uneven distribution of the end date of company accounting years this seasonality is exploited in time series estimates of the short run elasticity on the pre tax and post tax cost of capital for six manufacturing subsectors there is some evidence of a significant effect from the pre tax cost of capital on inventory investment but no evidence of any response to the tax incentives created by the stock relief legislation

the social opportunity cost of capital in the presence of labour market distortions this paper examines the conditions under which the social opportunity cost of capital in a tax distorted economy is equal to the gross of tax return to capital plus the excess of the market over the shadow wage bill whenever public investment serves as an unpriced or underpriced input in the private sector s production process only part of the excess of the market over the shadow wage bill should be attributed to private sector capital in addition whenever some of the benefits of public investment are appropriated by owners of capital the gross of tax return to capital will tend to overstate the genuine marginal product of capital the overall implication is that the social discount rate may be less than the gross of tax rate of return to capital in the private sector even if public investment crowds out private investment dollar for dollar

unemployment collective bargaining and the demand for protection there is a widespread consensus among nonacademic observers that labor unions with large numbers of unemployed members have been central actors in political coalitions demanding protectionist trade policies since the mid 1970s in advanced industrial societies yet trade unions and unemployment are hardly mentioned in most theories of the politics of international trade the purpose of this paper is to develop a theoretical framework for understanding the importance of unemployment as a determinant of protectionist demands that is consistent with optimizing behavior on the part of union members and firms models of labor negotiations derived from cooperative bargaining theory are used to illustrate why the material benefits of protection received by union members and their employers in protected industries increase when union members are unemployed even when workers are risk neutral and capital is immobile

price discount inventories and the distortion of wti benchmark abstract applying a rolling estimation to the hasbrouck information share model this study investigates the changing status of wti benchmark over time results show the ability of wti in reflecting market conditions decreases sharply and wti s efficiency in processing information has been surpassed by brent s since the second half of 2004 in the short run the wti distortion is related to its price discount problem but the distortion cannot be indicated by contangos in the long run wti s price discount problem coexists with a positive forward curve and both have harmed the price discovery role of wti the rising inventories in cushing significantly deteriorate wti s ability in serving as a world benchmark

marginal taxes and the asset portfolios of swedish households this paper focuses on the effects of marginal tax rates wealth income and a set of socioeconomic and demographic variables on the portfolio composition of households using detailed micro data on 2 000 swedish households in particular efforts are made to disentangle the effects of marginal tax rates on the portfolio behavior of households some econometric problems involved when estimating asset demand equations in the presence of incomplete portfolios are briefly discussed a final section examines the overall effect of marginal tax rates on asset demands by applying estimated discrete and continuous portfolio equations to compute different tax elasticities

the ineffectiveness of effective tax rates on business investment a critique of feldstein s fisher schultz lecture abstract in his fisher schultz lecture martin feldstein 1982 examined the effects of non neutral tax rules on business investment by estimating three econometric models and he concluded that the rising rate of inflation has because of the structure of existing u s tax rules substantially discouraged investment in the past 15 years in a detailed examination of feldstein s effective tax rate model and a less extensive review of his other formulations neoclassical and return over cost we advance a number of important and independent criticisms and find that these three models fail to support feldstein s conclusion that taxes have exerted a significantly depressing effect on net investment during the recent inflation episode

do economic instruments matter wind turbine investments in the eu 15 abstract this paper analyses how governments in the eu 15 countries have succeeded in stimulating investments in wind turbines between 1985 and 2005 i use four different evaluation criteria tobin s q euler equation estimation investment accelerator model and the effective marginal tax rate to describe the observed investment patterns after a period of rapid growth in capital stock 1985 2000 a period of modest growth 2001 2005 can be observed even though the economic attractiveness of investing increases modestly this pattern cannot be explained by the evaluation criteria unless we accept economic attractiveness is a necessary condition and not a necessary and sufficient condition when analysing which policy has worked best the policies of germany denmark and spain stand out their early and consistent support has been based on feed in tariffs combined with subsidies

effective tax and subsidy rates on human capital in canada abstract effective tax and subsidy rates etrs and esrs on human capital investment via post secondary education are estimated for canada in the years 2000 and 2006 the flattening of the federal personal income tax structure in 2001 substantially reduced the tax disincentive for investment in human capital effective subsidy rates also declined as public spending did not keep pace with rising tuition fees the change on the tax side was strong enough to dominate the subsidy reduction according to our main results but disaggregation shows that this result did not hold in all cases results are shown for college master s and phd programs in addition to bachelor s degrees they are also broken down by gender and are shown for the 25th and 75th percentiles as well as the median provincial detail and 1997 results are provided in the case of bachelor s graduates

new findings on firm investment and monetary transmission in the euro area in this paper we present comparable results on the determinants of firms investment and their link to monetary policy the results have been obtained by the eurosystem monetary transmission network this network has produced a series of papers in which the use of micro data permits estimating and quantifying the relevance of two channels of monetary policy transmission the interest rate and the broad credit channel the research findings provide evidence of an operative interest rate channel in all countries examined moreover the results indicate that variables which proxy firms financial conditions play a role firms characterised by weaker balance sheets show higher liquidity sensitivity

taxation and inflation a new explanation for capital flows abstract in a world of mobile capital the current system of taxation implies that the after tax cost of capital and return to saving in each country are negatively correlated with the rate of inflation thus a country s net foreign asset position ought to be negatively correlated with its long run inflation rate the magnitude of these effects is shown to be potentially large for oecd countries cross section and time series regressions confirm that inflation rates are good predictors of net foreign assets the existing distribution of net foreign assets may therefore largely reflect tax distortions

structural dependence of the state on capital a central claim of both marxist and neoclassical political theory is that under capitalism all governments must respect and protect the essential claims of those who own the productive wealth of society this is the theory of structural dependence of the state on capital using a formal model the internal logic and the robustness of the theory is examined we conclude that in a static sense the theory is false virtually any distribution of consumption between wage earners and owners of capital is compatible with continual private investment once an appropriate set of taxes and transfers is in place yet the state may be structurally dependent in a dynamic sense policies that once in place redistribute income without reducing investment do reduce investment during the period in which they are anticipated but not yet implemented

local business taxes theory and practice local taxes which are borne by business are an aspect of local government revenue systems in almost all western countries these taxes cover a wide range of possible structures from the highly visible and direct such as taxes on business profits assets and wealth to the more indirect which bear on the inputs to a firm such as payroll property and resource rentals and severance taxes or taxes which bear on outputs such as sales taxes most local governments also employ in addition to taxes user fees and charges the range of local business tax is still further widened when we extend consideration beyond corporate business to include sole traders and partnerships in this case in addition to most of the above taxes we must also consider local taxes on personal income capital gains capital transfers and inheritance hence the range of taxes to be considered amongst local business taxes is both large and very complex

stockholder tax rates and firm attributes abstract this paper develops a rigorous theoretical model to assess when investor clienteles may be empirically identified using ex dividend day data and what firm attributes these clienteles should respond to it then presents empirical results for the period 1963 1977 suggesting that 1 tax based investor clienteles do exist and are reasonably stable over time and 2 these clienteles are strongly influenced by the dividend price ratio but insignificantly by direct measures of risk and other firm characteristics

measuring the cost of capital when taxes are changing with foresight abstract the familiar hall jorgenson 1967 cost of capital perturbation is not a uniquely feasible one because of institutional features of actual tax systems the optimal holding time for an incremental unit of capital will generally be infinite the impossibility of an optimal rule for recapturing excess depreciation allowances on disposal is demonstrated when tax changes are foreseen the error in the traditional measure of cost of capital can become highly significant ignorance of this effect led to underestimates of the extent to which the radical changes to the u k corporation tax in 1984 would affect cost of capital and incentives to forestall planned investment

viewpoint measuring the well being of the poor with income or consumption a canadian perspective there is a long tradition of using consumption measures derived from statistics canada s household expenditures surveys to study material well being inequality and poverty we offer an introduction to this research income and consumption measures give different pictures of the patterns of material well being in canada but the differences are not as large as in the us we also provide a comparison to meyer and sullivan s results on data quality canadian expenditure surveys are of high quality unique aspects of these surveys variation in quality control measures over time and the possibility of comparing to income tax data provide important insights into the quality of survey data on income and consumption il existe une longue tradition d utilisation de mesures de consommation derivees de l enquete des depenses des menages de statistiques canada pour mesurer le bien etre materiel l inegalite et la pauvrete les auteurs presentent ces recherches les mesures de revenus et de consommation donnent des portraits differents des patterns de bien etre materiel au canada mais les differences ne sont pas aussi importantes qu aux etats unis on presente une comparaison avec les resultats de meyer et sullivan sur la qualite des donnees les enquetes sur les depenses sont de haute qualite au canada certains aspects uniques de ces enquetes variation dans les mesures de controle de qualite dans le temps et possibilite de comparer les donnees derivees des rapports d impot sur le revenu fournissent des apercus importants sur la qualite des donnees d enquetes sur le revenu et la consommation canadian economics association

estimating a third order translog using canadian cross sectional micro data a third order translog is estimated using canadian cross sectional micro data stratified by four family sizes third order terms and family size are found to be statistically important explanatory variables homogeneity and symmetry restrictions are also rejected for the third order translog the translog and the almost ideal demand system directions for future research implied by these results include conditioning the third order translog on more demographic variables or relaxing some aggregation conditions imposed in the model used here