Taking a bite out of Apple? Fixing international corporate taxation

Ruud de Mooij, Michael Keen, Victoria Perry 14 September 2014

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It’s hard to pick up a newspaper these days (or, more likely for those reading this, do the digital equivalent) without reading about Apple, Amazon, Google, or a host of others managing, by some magic, to pay little corporate income tax – and the consequent outrage of duly shocked and horrified politicians. Entertaining though all this is, understanding the rules that make such tax avoidance possible is a dull task that many of us are happy to leave to the tax nerds – detail really matters (just ask an international tax lawyer).

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Topics:  Taxation

Tags:  tax, taxation, IMF, corporate taxation, corporate income tax, spillovers, tax treaties, tax avoidance, multinationals, tax competition, tax harmonisation

Can giving taxpayers a voice increase tax compliance?

Cait Lamberton, Jan-Emmanuel De Neve, Michael I. Norton 30 May 2014

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Two things are certain in life: Death and taxes. As evidenced by Facebook groups like ‘I Hate Paying Taxes!’, it’s not clear which of the two people dislike more. Indeed, people can prefer to pay more for a product and avoid tax than get the product for cheap but know that the government is taking a cut (Sussman and Olivola 2011). This ‘tax aversion’ is no small matter. The US has an estimated annual ‘tax gap’ of almost $400 billion due to non-compliance (Internal Revenue Service 2012), while in the UK the gap stands at £42 billion (HMRC 2013).

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Topics:  Taxation

Tags:  taxation, tax compliance

It’s time to eliminate the US corporate income tax

Laurence J. Kotlikoff 14 January 2014

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Perhaps the most maddening aspect of America’s dangerous government’s political infighting is the failure of politicians in both parties to agree to reforms on which they agree.

Take, for example, taxing wealth, and taxing consumption. Many Democrats would love to enhance tax progressivity by taxing wealth and lowering taxes on workers. In contrast, Democrats think retail sales taxation is the most regressive tax around. For their part, many Republicans would applaud switching from wage to retail sales taxation, but would be appalled by wealth taxation.

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Topics:  Taxation

Tags:  US, taxation, corporate income tax

Who benefits from state corporate tax cuts? A local labour markets approach with heterogeneous firms

Owen Zidar 13 December 2013

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State and local governments have been increasing business location incentives and cutting corporate taxes to attract businesses to their jurisdictions. For instance, Jay Inslee, the Gov. of Washington, recently passed a $9 billion corporate tax package for Boeing to retain its manufacturing base near Seattle. It is the largest corporate tax break any state has ever granted a company.

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Topics:  Taxation

Tags:  taxation, economic geography

Tax policy in (and for) hard times

Michael Keen 16 October 2013

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Tax policy, like everything else, has been through tough times since the onset of the crisis. First, tax policy was to stimulate the economy (Heady 2011). Now it is to help consolidate the fiscal position – always with considerable urgency and all in the midst of public anger and disquiet.

What state has all this left our tax systems in? In the latest Fiscal Monitor (IMF 2013), my colleagues and I take a close look.

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Topics:  Macroeconomic policy Taxation

Tags:  Inequality, wealth, taxation, fiscal policy, fiscal consolidation, global crisis

Removing deadweight loss from economic discourse on income taxation and public spending

Charles F Manski 18 August 2013

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The anti-tax rhetoric evident in much lay discussion of public policy draws considerable support from the prevalent negative language of professional economic discourse. Economists regularly write about the 'inefficiency', 'deadweight loss', and 'distortion' of income taxation.

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Topics:  Frontiers of economic research

Tags:  taxation, efficiency, inefficiency

France’s weak economic performance: Sick of taxation?

Balázs Égert 10 May 2013

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France is often labelled these days as one of Europe’s problem children (The Daily Telegraph 2013, Handelsblatt 2013). Indeed, France is one of the OECD countries which has recorded the weakest real per capita income growth over the last two decades or so (Figure 1). This weak economic performance can be explained by the country’s structural weaknesses in many areas, including taxation. The high tax burden (43% of GDP in 2010) and the structure of the tax system weigh heavily on the economy.

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Topics:  Europe's nations and regions

Tags:  France, reform, taxation, Eurozone crisis

Who really pays social security contributions and labour taxes?

José M. González-Páramo, Ángel Melguizo 06 February 2013

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For almost two decades, a common policy recommendation to boost job creation from academic and international institutions has been to reduce social contributions. In order to compensate for revenue losses – taking into account that ageing will pose additional challenges to financing many social policies, especially in the fields of pensions and healthcare – this policy recommendation often includes an increase in other sources of revenues, such as consumption or environmental taxes.

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Topics:  Labour markets Macroeconomic policy

Tags:  taxation, fiscal policy, Social security, meta-analysis

Are the Nordic countries really less innovative than the US?

Mika Maliranta, Niku Määttänen, Vesa Vihriälä 19 December 2012

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The cut-throat versus cuddly capitalism distinction (Acemoglu et al. 2012) resonates with widely-held stereotypes. The US is a ‘mean streets’ sort of place to live but the law of the jungle approach to capitalism produces breakthrough innovations. European nations – especially Nordic nations – are just, social democratic societies, but comfort saps the life out of invention. Acemoglu et al. (2012) argue that advancing the technology frontier fast requires US style cut-throat capitalism and that cuddly Nordic economies are free-riding on US innovation.

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Topics:  Productivity and Innovation

Tags:  US, innovation, taxation, Nordic

Impacts of redistribution on the size and composition of the workforce

Casey B. Mulligan 31 October 2012

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The US economy experienced an unusually deep and prolonged contraction, especially in its labour markets (Federal Reserve 2012). Employment and hours worked fell during 2008 and 2009 for many demographic groups, but disproportionately so among less skilled people, and among the unmarried. As of 2012, labour market activity still remained far below pre-recession levels. Over the same time frame, many facets of fiscal policy were changed, especially policies related to the distribution of safety net programme benefits.

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Topics:  Labour markets Taxation

Tags:  US, tax rates, taxation

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