Taxation

Ufuk Akcigit, John Grigsby, Tom Nicholas, Stefanie Stantcheva, 15 October 2018

Understanding how taxation influences innovation is of central importance to create investment incentives for R&D, yet our knowledge remains limited due to a lack of data, especially covering a longperiod of time.This column uses newly constructed datasets from the 20thcentury to examine the effects of both personal and corporate income taxation on inventors, as well as on firms that do R&D. It finds consistently negative effects of high taxes on innovation over time as well as on individual inventors and firms. 

Jayson Beckman, Carmen Estrades, Manuel Flores, Angel Aguiar, 03 October 2018

Export taxes are the most commonly employed form of export restrictions on agricultural products, but they receive relatively little scrutiny in multilateral trade negotiations. This column demonstrates that taxes have a positive effect on prices, with effects generally detectable in the same year that the taxes are implemented. The removal of export taxes does not affect international prices, but can lead to small decreases in domestic poverty.

Joshua Aizenman, Yothin Jinjarak, Hien Thi Kim Nguyen, Donghyun Park, 28 September 2018

The upward trajectory of policy interest rates in OECD countries will impose growing fiscal challenges, testing their fiscal capacity for countercyclical policy and thus their resilience. This column compares fiscal cyclicality across countries and identifies measures of fiscal space. The results reveal a mixed fiscal scenery, where more than half of countries are characterised by limited fiscal space, and fiscal policy is either procyclical or acyclical.

Thomas Tørsløv, Ludvig Wier, 24 September 2018

Every year multinational companies reduce their tax bills by about $200 billion simply by shifting profits, legally, to tax havens. Governments criticise tax loopholes and promise to close them. But at the same time they also use them to attract these paper profits to their jurisdiction. Thomas Tørsløv and Ludvig Weir talk to Tim Phillips about where the missing profits of nations go, the effect of the missing billions on government policies, and how to create a fairer system of taxation for multinationals.

Peter Egger, Nora Strecker, Benedikt Zoller-Rydzek, 24 September 2018

The OECD estimates that more than $100 billon is lost each year to tax avoidance by MNEs. One way that firms do this is by using their size and mobility to bargain for tax breaks. This column uses French data to identify the nature of such bargaining. It finds that the scale of the projected tax payment accounts for 41% of the tax break, and a credible threat to relocate accounts for the rest.

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