Taxation

Paolo Pasimeni, Stéphanie Riso, 19 January 2017

EU budget reform is a key issue in policy debates, in particular the redistributive effects between member states. This column assesses redistribution within the EU budget over the period 2000 to 2014. It finds that the net redistributive impact of the EU budget is rather small and, contrary to common belief, that the revenue side is more progressive than the expenditure side.

Jason Furman, Katheryn Russ, Jay Shambaugh, 12 January 2017

Tariffs – taxes on imported goods – likely impose a heavier burden on lower-income households, as these households generally spend more on traded goods as a share of expenditure/income and because of the higher level of tariffs placed on some key consumer goods. This column estimates the tariff burden by income group and by family structure using a new dataset constructed by matching of granular data on trade and consumer spending. The findings suggest that tariffs function as a regressive tax that weighs most heavily on women and single parents.

Pierre Cahuc, Olivier Charlot, Franck Malherbet, Hélène Benghalem, Emeline Limon, 05 January 2017

Temporary job contracts account for a substantial proportion of the workforce in countries such as France and Spain, but they can result in high job turnover and instability. This column assesses the impact of government policies that impose taxes on temporary contracts to induce employers to lengthen job durations. Such policies a negative impact on the labour market, reducing the mean duration of jobs and decreasing job creation. The introduction of open-ended contracts with no termination cost for separations occurring at short tenure may be more effective.

Jörg Paetzold, Hannes Winner, 17 December 2016

Since the Global Crisis, many governments around the world have initiated policies against tax evasion and harmful tax avoidance. This column uses data from an Austrian commuter allowance scheme to explore how the design of tax schemes and the social environment affect compliance. A substantial share of employees in the study misreport their commuting distance in order to receive more compensation. Employees also appear to be influenced by the misreporting behaviour of their co-workers, showing how tax evasion can have spillover effects.

Kai Konrad, Tim Stolper, 22 November 2016

The reasons why a country would comply with international standards of transparency in the face of sizeable returns in the tax haven business are unclear. This column highlights fundamental coordination problems in the fight against offshore secrecy regimes and their implications for optimal policies, and explores whether the fight will be successful or not.

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