The revenue generated by a taxpayer survey, which brings small businesses into the tax system in ... more The revenue generated by a taxpayer survey, which brings small businesses into the tax system in Thailand, exceeds its administration cost, but we show that expanding the survey is not warranted unless the shadow price of tax revenue times the net marginal revenue from expanding the survey exceeds the social marginal loss inflicted on the small business sector.
We investigate whether more resources should be devoted to a Thai tax enforcement program which i... more We investigate whether more resources should be devoted to a Thai tax enforcement program which is aimed at bringing small businesses into the tax system. We show that the appropriate criteria for determining whether more resources should be devoted to tax enforcement is whether the Atkinson–Stern condition for the optimal provision of a publicly-provided good is satisfied, or equivalently, whether the marginal cost of finds obtained through additional tax enforcement, SMCF p , is less than the marginal cost of funds obtained through raising tax rates, SMCF t . In our base case scenario, the SMCF p is 11.60 which exceeds our estimate of the SMCF t for an across-the-board increase in income tax rates on wage earners. The use of pro-poor distributional weights makes expanding the survey less attractive if the alternative way of obtaining additional tax revenue is an across-the-board income tax rate increase, while aversion to tax evasion makes it more attractive. Copyright Kluwer Acad...
The author evaluates the fiscal stimulus policies of 20 OECD countries within a simple benefit-co... more The author evaluates the fiscal stimulus policies of 20 OECD countries within a simple benefit-cost framework. Among his findings: in Canada, to be justifiable on a benefit-cost basis, a fiscal stimulus project that improves consumptive public services must provide at least 73 cents in benefits for every dollar of fiscal stimulus.
Statistical discrimination occurs when a characteristic, such as sex, is used as an indicator of ... more Statistical discrimination occurs when a characteristic, such as sex, is used as an indicator of the risk group of an individual. The theory of adverse selection is used to explain the occurrence of statistical discrimination. A model of the market for collision insurance, which is based on the theory of adverse selection, is estimated on Canadian data. The results suggest that adverse selection occurs in this market. Simulations of the effect of prohibiting sexual discrimination in the 21–24 age group indicate that the premiums for single females would increase substantially and that a significant proportion would no longer purchase collision insurance.
Copyright to papers in this working paper series rests with the authors and their assignees. Pape... more Copyright to papers in this working paper series rests with the authors and their assignees. Papers may be downloaded for personal use. Downloading of papers for any other activity may not be done without the written consent of the authors. Short excerpts of these working papers may be quoted without explicit permission provided that full credit is given to the source. The Department of Economics, The Institute for Public Economics, and the University of Alberta accept no responsibility for the accuracy or point of view represented in this work in progress.
Periodically, tax systems need major reforms to remove the "barnacles" that accumulate ... more Periodically, tax systems need major reforms to remove the "barnacles" that accumulate under the short-term pressures of political expediency and to adapt to the long-term forces of technological and economic change. The current fiscal and economic problems that confront the provinces require an assessment of much-needed reforms. Raising tax revenue imposes large costs on our society, not only because of the administration and compliance costs of collecting taxes, but because taxes distort economic decisions in the private sector. This is especially true of provincial corporate income taxes. Taxing highly mobile corporate capital and corporate profits encourages firms to shift their investments and profits across provincial and international boundaries. The provinces would enjoy significant boosts to economic growth and efficiency gains by enacting a revenue-neutral switch from corporate to sales or personal income taxes. For Alberta, such a shift would yield up to $40 per...
Page 1. Tax Reform and Economic Growth in Alberta PO Box 6572, Station D Calgary, AB, CANADA T2P ... more Page 1. Tax Reform and Economic Growth in Alberta PO Box 6572, Station D Calgary, AB, CANADA T2P 2E4 Ph: (403) 264-9535 Fax: (403) 269-4776 www.cwf.ca October 2000 ISBN# 1-895992-83-4 Bev Dahlby, PhD Professor of Economics, University of Alberta Page 2. ...
This paper describes the experience of Canada and other OECD countries in providing retirement in... more This paper describes the experience of Canada and other OECD countries in providing retirement incomes for the elderly. This paper is intended to provide background on the options for reforming the social security system in Malaysia.
This paper illustrates the use of the marginal cost of public funds concept in three contexts. Fi... more This paper illustrates the use of the marginal cost of public funds concept in three contexts. First, we extend Parry's (2003) analysis of the efficiency effects excise taxes in the U.K., primarily by incorporating the distortion caused by imperfect competition in the cigarette market and distinguishing between the MCFs for per unit and ad valorem taxes on cigarettes. Our computations show, contrary to the standard result in the literature, that the per unit tax on cigarettes has a slightly lower MCF than the ad valorem tax on cigarettes. Second, we calculate the MCF for a payroll tax in a labour market with involuntary unemployment, using the Shapiro and Stiglitz (1984) efficiency wage model as our framework. Our computations, based on Canadian labour market data, indicate that incorporating the distortion caused by involuntary unemployment raises the MCF by 25 to 50 percent. Third, we derive expressions for the distributionally-weighted MCFs for the exemption level and the mar...
An optimal tax system equates the marginal cost of public funds across all tax bases. This idea i... more An optimal tax system equates the marginal cost of public funds across all tax bases. This idea is applied to a federation to derive the optimal unconditional transfers that will promote an optimal allocation of taxation and expenditures among the governments in the federation. This approach provides insights into the concepts of vertical and horizontal fiscal imbalance, fiscal capacity, and
The revenue generated by a taxpayer survey, which brings small businesses into the tax system in ... more The revenue generated by a taxpayer survey, which brings small businesses into the tax system in Thailand, exceeds its administration cost, but we show that expanding the survey is not warranted unless the shadow price of tax revenue times the net marginal revenue from expanding the survey exceeds the social marginal loss inflicted on the small business sector.
We investigate whether more resources should be devoted to a Thai tax enforcement program which i... more We investigate whether more resources should be devoted to a Thai tax enforcement program which is aimed at bringing small businesses into the tax system. We show that the appropriate criteria for determining whether more resources should be devoted to tax enforcement is whether the Atkinson–Stern condition for the optimal provision of a publicly-provided good is satisfied, or equivalently, whether the marginal cost of finds obtained through additional tax enforcement, SMCF p , is less than the marginal cost of funds obtained through raising tax rates, SMCF t . In our base case scenario, the SMCF p is 11.60 which exceeds our estimate of the SMCF t for an across-the-board increase in income tax rates on wage earners. The use of pro-poor distributional weights makes expanding the survey less attractive if the alternative way of obtaining additional tax revenue is an across-the-board income tax rate increase, while aversion to tax evasion makes it more attractive. Copyright Kluwer Acad...
The author evaluates the fiscal stimulus policies of 20 OECD countries within a simple benefit-co... more The author evaluates the fiscal stimulus policies of 20 OECD countries within a simple benefit-cost framework. Among his findings: in Canada, to be justifiable on a benefit-cost basis, a fiscal stimulus project that improves consumptive public services must provide at least 73 cents in benefits for every dollar of fiscal stimulus.
Statistical discrimination occurs when a characteristic, such as sex, is used as an indicator of ... more Statistical discrimination occurs when a characteristic, such as sex, is used as an indicator of the risk group of an individual. The theory of adverse selection is used to explain the occurrence of statistical discrimination. A model of the market for collision insurance, which is based on the theory of adverse selection, is estimated on Canadian data. The results suggest that adverse selection occurs in this market. Simulations of the effect of prohibiting sexual discrimination in the 21–24 age group indicate that the premiums for single females would increase substantially and that a significant proportion would no longer purchase collision insurance.
Copyright to papers in this working paper series rests with the authors and their assignees. Pape... more Copyright to papers in this working paper series rests with the authors and their assignees. Papers may be downloaded for personal use. Downloading of papers for any other activity may not be done without the written consent of the authors. Short excerpts of these working papers may be quoted without explicit permission provided that full credit is given to the source. The Department of Economics, The Institute for Public Economics, and the University of Alberta accept no responsibility for the accuracy or point of view represented in this work in progress.
Periodically, tax systems need major reforms to remove the "barnacles" that accumulate ... more Periodically, tax systems need major reforms to remove the "barnacles" that accumulate under the short-term pressures of political expediency and to adapt to the long-term forces of technological and economic change. The current fiscal and economic problems that confront the provinces require an assessment of much-needed reforms. Raising tax revenue imposes large costs on our society, not only because of the administration and compliance costs of collecting taxes, but because taxes distort economic decisions in the private sector. This is especially true of provincial corporate income taxes. Taxing highly mobile corporate capital and corporate profits encourages firms to shift their investments and profits across provincial and international boundaries. The provinces would enjoy significant boosts to economic growth and efficiency gains by enacting a revenue-neutral switch from corporate to sales or personal income taxes. For Alberta, such a shift would yield up to $40 per...
Page 1. Tax Reform and Economic Growth in Alberta PO Box 6572, Station D Calgary, AB, CANADA T2P ... more Page 1. Tax Reform and Economic Growth in Alberta PO Box 6572, Station D Calgary, AB, CANADA T2P 2E4 Ph: (403) 264-9535 Fax: (403) 269-4776 www.cwf.ca October 2000 ISBN# 1-895992-83-4 Bev Dahlby, PhD Professor of Economics, University of Alberta Page 2. ...
This paper describes the experience of Canada and other OECD countries in providing retirement in... more This paper describes the experience of Canada and other OECD countries in providing retirement incomes for the elderly. This paper is intended to provide background on the options for reforming the social security system in Malaysia.
This paper illustrates the use of the marginal cost of public funds concept in three contexts. Fi... more This paper illustrates the use of the marginal cost of public funds concept in three contexts. First, we extend Parry's (2003) analysis of the efficiency effects excise taxes in the U.K., primarily by incorporating the distortion caused by imperfect competition in the cigarette market and distinguishing between the MCFs for per unit and ad valorem taxes on cigarettes. Our computations show, contrary to the standard result in the literature, that the per unit tax on cigarettes has a slightly lower MCF than the ad valorem tax on cigarettes. Second, we calculate the MCF for a payroll tax in a labour market with involuntary unemployment, using the Shapiro and Stiglitz (1984) efficiency wage model as our framework. Our computations, based on Canadian labour market data, indicate that incorporating the distortion caused by involuntary unemployment raises the MCF by 25 to 50 percent. Third, we derive expressions for the distributionally-weighted MCFs for the exemption level and the mar...
An optimal tax system equates the marginal cost of public funds across all tax bases. This idea i... more An optimal tax system equates the marginal cost of public funds across all tax bases. This idea is applied to a federation to derive the optimal unconditional transfers that will promote an optimal allocation of taxation and expenditures among the governments in the federation. This approach provides insights into the concepts of vertical and horizontal fiscal imbalance, fiscal capacity, and
Uploads