Tax Structures

The straddle rules began in 1981 with the relatively specific purpose of precluding investors from (1) accelerating losses on commodities and commodity futures contracts while deferring gains and (2) converting ordinary income and short-term capital gains into long term capital gains.  The tax system that was enacted basically limits deductions of losses on a straddle position involving activity traded property not on the mark-to-market system to the amount by which such losses exceed unrealized gains on any offsetting position.  This system proved versatile in combating a variety of abuses involving positions that effectively hedge other positions.  Yet, by developing responses for specific abuses, the straddle rules have undergone an uneven evolution and are now extraordinarily specific as to some financial structures, particularly those involving exchange-traded instruments, but remain vague and difficult to apply to others, such as over-the-counter derivatives.  Even more uneven than the evolution of the rules has been taxpayer compliance and Service enforcement.  Many taxpayers are unaware of all the straddles that could be found among their financial activities, and the IRS lacks the software sophistication that would probably be necessary to find the unreported straddles. 

Author’s note (2015):  This article is now out of date and I have not studied the area with any intensity for almost five years.  Nevertheless, I post it now because I think it might still be useful for those studying the history of this complex area of the tax law of financial instruments.  Also, now that Stevie Conlon has developed software with components of the sort that could only be dreamed about in 1999, some of my ideas have continuing relevance.

The tax structure shows the country's choice between the principles of justice and efficiency in tax policy. In a modern economy, the tax structure is expected to change in favour of direct taxes according to the principle of justice. This article investigates the causality between tax structure and per capita GDP in Turkey using asymmetric and time-varying causality analysis. The findings reveal that the per capita GDP doesn't change the tax structure in Turkey and doesn't show any change in favour of direct taxes to ensure justice in income distribution. This situation can be evaluated as the relationship between per capita GDP, and tax structure may have been drifted apart.

Bu çalışmanın amacı, vergi yapısının uzun dönem ekonomik büyüme üzerindeki etkisini, 22 OECD ülkesinin 1971-2014 dönemi için araştırmaktır. Konu üzerine daha önce yapılmış çok sayıda çalışma bulunmaktadır. Bununla beraber, ampirik metodoloji farklılıklarına bağlı olarak elde edilen sonuçlar da değişebilmektedir. Ayrıca daha önce yapılmış az sayıda çalışma, panelde yatay kesit bağımlılığını dikkate almıştır. Bu makalede, yatay kesit bağımlılığını dikkate alan panel nedensellik ve dinamik panel tahmin yöntemleri kullanılmıştır. Ampirik bulgular, uzun dönem ekonomik büyüme performansı üzerinde tüketim vergilerinin (dolaylı vergilerin) pozitif, vergi yükü ile gelir ve servet vergilerinin (dolaysız vergilerin) ise negatif etkisinin olduğunu ortaya koymaktadır. Bu güçlü tahmin sonuçları, uzun dönem ekonomik büyüme performansı için tüketim vergilerinin bozucu olmayan vergiler olduğu iddiasını desteklerken servet vergilerinin büyüme dostu vergiler olduğu iddiasına ise ampirik kanıt sunamamaktadır.

Indirect taxes play a fundamental role in revenue collection in Sudan. This role is under investigation by estimating an optimum level beyond which they make vulnerable the acceleration of economic growth. A threshold regression was used for estimation which covers the period 1970-2017. The model contains real GDP (Y) as the dependent variable and indirect taxes as a threshold variable. The unemployment rate (UR), the external gap (GAP2), and the real effective exchange rate (REER) are the non-threshold variables. The main research findings indicate that the average indirect tax ratio is more than three times the direct tax ratio and constitutes about 55.3% of the total revenue collection compared to 18% of the direct tax. These findings suggest that the optimum threshold is 7.46% above which indirect taxes exert a negative impact on economic growth. It is clear that resorting to indirect taxes fosters the maximum economic growth at the threshold that corresponds to the year 1982. This year is considered to be the most economically stable year (elected as a base year). Here the non-threshold variables i.e. external gap represents 0.03% of its mean value, while real exchange rate and employment rate are less than their mean values. This paper focuses on restructuring the tax system which is highly recommended to shift the balance in favor of direct taxes so as to curb price rises, attain social and economic balance, and reduce income inequality. Economic policies have to be focused on tackling unemployment especially among young graduates and disguised unemployment. Here, monitory policy can stimulate demand and put the economy back on track, as well as a fiscal policy through taxation and government spending. A favorable economic environment conducive for investment and jobs creation ought to be one of the priorities. Job description 128 and irradiation of nepotism can help much in reducing unemployment. Export diversification and improved range of merchandized, recapitalization of the export-import (EXIM) bank for smooth credit provision, revision of rules & tariffs, creation of single window for customs clearance, and the stable exchange rate should be the main concern of the government.

Purpose: This study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia. Methodology: This study uses the dynamic panel system generalized method of moments, controlling for firm-specific as well as macroeconomic effects Findings: We find that (1) debt funding is not conducive to SME performance; (2) access to non-bank credit sources and tax incentives support SME performance by lowering opportunity costs of riskier projects; (3) existing tax structures in Malaysia inhibit SME growth and encourage manipulation of accounts; and (5) investors in Malaysia prefer SMEs that are more conservative in their accounting and taxation practices. Limitations: Access to Malaysian SME data is restricted. Although we use robust methods, there is a chance that different conclusions may arise with a much larger sample. Implications: Our findings provide clear direction in the discussion and enactment of new policies that support SME growth especially in support of non-bank credit sources instead of revising tax policies. We also contribute by providing guidance to future SME studies that are inhibited by limited access to data. Originality: SME-related studies on credit access and tax structures have often relied on traditional metrics (e.g. total amount of bank loans; tax expenses) to measure its impact on entrepreneurial / SME performance. Although relevant to the past, financial policies have evolved to embrace Industrial Revolution 4.0. This paper is a shift from the traditional by investigating the impact of new and innovative sources of funding such as incubators and crowdfunding. Also, since one cannot exist without the other, examining the joint impact of credit access and tax structures provides a more holistic view on policy-making, something prior studies have not addressed.

The impact of taxation on long-run gross domestic product (GDP) level is one of the most important controversial issues in the literature. Nevertheless, there is no consensus how a non-distortionary taxation can be applied. The purpose of this study is to investigate the long-run relations between tax structure and GDP growth by using the annual data of 13 European transition economies covering the period of 1995-2015. The pooled mean group (PMG) estimation method developed by Pesaran et al (1999) was used to analyze the relations between tax structure and long-run GDP growth. The income effects of tax burden, tax mix, tax composition and revenue-neutral shifts were estimated by applying alternative model specifications The findings indicate the following results. (1) Tax policy affects long-run GDP growth in transition economies, (2) high tax burden with direct taxation (personal income tax, corporate tax and property taxes) are generally associated with lower long-run GDP growth while indirect taxation is associated with higher long-run GDP growth, (3) consumption taxes (except trade taxes) are the most growth-friendly while all the other taxes damage long-run growth. (4) Additionally, revenue-neutral reduction in income, property and trade taxes, offset by increases in domestic consumption taxes, appear to be growth-friendly.

The purpose of this article is to study the impact of fiscal policy on economic growth in Bulgaria for the period 1995-2018. The descriptive analysis is focused on the general trends in fiscal policy and tax structure. The influence of government spending and taxation on economic growth is studied through regressions on time-series data. The empirical estimates prove that taxation is a more reliable instrument of fiscal policy than government spending in terms of a small open emerging-market economy. The dilution of the effect of public spending is probably caused by the high negative values of the current account balance that have been maintained for long periods. Thus, when domestic supply is weak, government expenditure cannot stimulate domestic production, as supply is dominated by import goods. Public investments demonstrate a negative effect on economic growth, which suggests a low productivity of investment spending. A factor of great importance is the level of corruption, which is strongly correlated with government investments, but is harmful to their efficiency. The Bulgarian tax system demonstrates consistency with economic growth. The receipts from value-added tax seems growth-conductive. The decrease of the corporate income tax rate exerts a positive impact on economc performance during the analyzed period, while personal income taxation demonstrates a negative effect. Property taxation has no significant relation with the growth of the Bulgarian economy.

This chapter examines selected topics in what is traditionally known as the positive economic analysis of taxation. The objective is, first, to investigate 'on the ground' realities in taxation, and, second, to research their broad implications for tax design. We begin by analysing in section 2, the reasons for a secular rise in taxation as percentage of GDP in the developed countries over the twentieth century. This is followed by an examination in section 3 of the differences in the structure of taxation in the developed and the developing countries. In section 4, we examine theoretical and empirical research on using taxation as a tool for influencing economic incentives. Having thus broadly investigated the structure of taxation and its use / misuse as a fiscal tool in select areas, we then stake out research on tax incidence in section 5 and the costs that taxation imposes on economic activity in section 6. We then take an interlude into tax reform in section 7. Section 8 summarises and concludes the implications of positive economic analysis for tax design.

Öz
Çok sayıda kamu çalışanının yaşadığı, sanayisi yok denecek kadar az, dolayısıyla oldukça sınırlı bir işçi nüfusuna sahip Tunceli’deki ekonomik aktivite ağırlıklı olarak küçük esnafın başını çektiği perakende ticaret ve yiyecek-içecek hizmeti veren işletmelerce yürütülmektedir. Türkiye’nin en düşük nüfuslu ili olan Tunceli, düşük nüfusuna bağlı olarak genel bütçe vergi gelirleri içerisinde son sıralarda olsa da uzun yıllardır vergi tahsilat oranı açısından ilk sıralarda yer almaktadır. Çalışmamız, Tunceli’deki vergilerin yapısına ve yüksek vergi uyumuna etki eden sosyal, psikolojik, kültürel, ekonomik, politik ve tarihsel belirleyicilere ışık tutmayı amaçlamaktadır.
Anahtar Kelimeler: Vergi Yapısı, Vergi Uyumu, Vergi Ahlakı, Tunceli, Dersim.
JEL Kodları: H20, H71, R10.

Tax Structure and Tax Compliance in Tunceli
Abstract
Tunceli has a large number of public employees, but little to no industry, and thus it has a very limited worker population. Economic activity is mainly carried out by businesses in retail trade, food and beverage services, that are led by small tradesmen. Tunceli, the lowest populated province in Turkey, occupies the last place among provinces in terms of general budget tax revenues, but the first place in terms of tax collection rate for many years. Our study aims to shed light on the social, psychological, cultural, economic, political and historical determinants affecting the structure of taxes and high tax compliance in Tunceli.
Keywords: Tax Structure, Tax Compliance, Tax Morale, Tunceli, Dersim.
JEL Codes: H20, H71, R10.

Ten years from the last financial crisis, and 17 years from the most virulent one in the history of Argentina, its government insists on policies that spark exchange rate volatility in attempting to right macroeconomic imbalances. The effects of this volatility on inequality should not be ignored as, for the most part, structural reform must be socially sustainable as well as economically sustainable.
This work analyses some aspects of the response of the government to the 2018 financial crisis in Argentina. To do this, this work is organized in three sections. The first section gives a general overview of the current crisis and the response of the government and its distributive effects. The second section analyses a model and extends it for the case of an economy with two sectors, one of which has access to the world market, the effects of changes in the exchange rate on inequality are analysed and calibrated for Argentina focusing on the parameter τ. Finally, some policy recommendations are proposed.

The purpose of this article is to study the impact of fiscal policy on economic growth in Bulgaria for the period 1995–2018. The descriptive analysis is focused on the general trends in fiscal policy and tax structure. The influence of government spending and taxation on economic growth is studied through regressions on time-series data. The empirical estimates prove that taxation is a more reliable instrument of fiscal policy than government spending in terms of a small open emerging-market economy. The dilution of the effect of public spending is probably caused by the high negative values of the current account balance that have been maintained for long periods. Thus, when domestic supply is weak, government expenditure cannot stimulate domestic production, as supply is dominated by import goods. Public investments demonstrate a negative effect on economic growth, which suggests a low productivity of investment spending. A factor of great importance is the level of corruption, wh...

EXTENDED ABSTRACT This study first deals with the tax structure of 31 transition economies in the period 2010-2019, which consists of tax rates, tax tariffs, and tax revenues. In this context, to evaluate the components of the tax structure, an evaluation was made by relating tax rates and tax response, economic freedom with tax revenues, and finally corruption and GDP per capita. Then, the factors that add to the corruption index of 24 transition economies in the 2010-2019 period were analyzed with panel data analysis. While corruption is the dependent variable in the model, tax revenues (control variable), GDP per capita, commercial openness, economic freedom, corporate tax rate, income tax rate, and excise tax rate are included as independent variables. In this context, the scope of the study is to examine the tax structure of transition economies in the 2010-2019 period and then analyze the institutional determinants of the tax structure of 24 transition economies. In this context, the study aims to investigate whether the tax system is rationalized as financing the transition process. In other words, the first purpose is to examine the relationship of the tax structure in these countries with tax response, economic freedom, and corruption. Secondly, in countries where free-market institutions are not developed, factors affecting the problem of corruption, such as bribery as a substitute for taxes, are examined in the tax system. In the study, tax rates, tax revenues, and tax tariffs are analyzed with descriptive and predictive statistical methods. Descriptive statistics, which is one of these methods, converts numbers and observations into descriptive indices. It is used to summarize, organize, and reduce many observations. Descriptive statistics are the best way to summarize data and interpret research results. On the other hand, inferential statistics are used to draw conclusions and make predictions in determining the similarities between the population and the sample. Additionally, many research questions require predictions about the universe from the sample. According to the results, corruption is high in countries with a low economic freedom index. Similarly, GDP per capita is low in economies with high corruption. It can be said that bribery in transition economies is seen as a substitute for tax due to reasons such as high tax burden, low justice in income distribution, and the institutional weakness of tax administrations. Within this framework, according to the findings of static analysis, a one-unit increase in income per capita in transition economies positively affects corruption at 0.0371%, openness at 0.0134%, economic freedom at 0.0394%, and income tax rate at 0.0122%. According to the findings of the dynamic analysis, two variables negatively affect corruption. Among these, economic freedom corruption negatively affects 0.073% and excise taxes 0.108%. On the other hand, tax revenues (0.064), per capita income (0.056), trade deficit (0.073), and income tax rate (0.063) positively affect corruption. The corruption perception index was used in the study to examine the institutionalization of the tax system. The relationship between economic freedom, which was examined in the first part, corruption, and GDP per capita was analyzed in the second part with panel data analysis. In this context, panel data analysis has been done with static and dynamic models. This is because the dynamic analysis does not neglect the periodic effect and the static analysis detects the annual effect. In static analysis, first, the F test, LR test, LM test, and ALM test were used to determine estimators. As a result of these tests, it was concluded that the pooled least squares method (PLSM) is invalid, and the random-effects (RE) model is valid. Then, the Hausman test was conducted to test the random effects model against the fixed effects (FE) model and the fixed effects estimator was decided upon. Variance, autocorrelation, and inter-unit correlation tests were performed for the three basic assumptions of the fixed effects estimator, and it was found that all three questions were present. For this reason, the Driscoll / Kraay fixed effects regression test was conducted, which gives consistent results against these problems. Additionally, the Arellano and Bover / Blundell and Bond system generalized moments (System GMM) estimators were used for dynamic panel analysis. The existence of autocorrelation in the model was checked by AR (1) and AR (2) statistics and it was concluded that there was no second-order autocorrelation. Using the Sargan test in the prediction tested the validity of the vehicle variables and it was concluded that it is appropriate. ÖZ Tarihsel mirasında kurumsal vergi sistemine sahip olmayan ekonomiler bağımsızlıklarıyla birlikte vergi sistemi tesisi arayışına girmişlerdir. Böyle bir sistemin esas unsuru olan vergi yapısı ise geçiş ekonomilerinin serbest piyasa reformlarının finansmanı anlamına gelmektedir. Çalışmanın amacı, 31 geçiş ekonomisinin mevcut vergi yapısını değerlendirmektir. Ek olarak, vergi yapısı ve vergi sisteminin kurumsal yapısının etkinliğini değerlendirmek amacıyla 24 geçiş ekonomisinde yolsuzluk ile toplam vergi yükü, kişi başına düşen GSYH, dışa açıklık, ekonomik özgürlük, kurumlar-gelir-tüketim vergisi oranları ilişkisi incelenmiştir. Bu amaçla statik ve dinamik panel veri analizi yapılmıştır. Sonuçlarına göre ekonomik özgürlük endeksi düşük olan ülkelerde yolsuzluk yüksek seyretmektedir. Benzer şekilde yolsuzluğun yüksek olduğu ekonomilerde kişi başına düşen GSYH düşüktür. Vergi yükünün yüksek, gelir dağılımında adaletin düşük ve vergi idarelerinin kurumsal zayıflığı gibi nedenlerden dolayı geçiş ekonomilerinde rüşvet, verginin ikamesi olarak görüldüğü söylenebilir. Bu çerçevede statik analiz bulgularına göre geçiş ekonomilerinde kişi başına düşen gelirde bir birimlik artış yolsuzluğu %0,0371, dışa açıklık %0,0134, ekonomik özgürlük %0,0394 ve gelir vergisi oranı %0,0122 pozitif etkilemektedir. Dinamik analizin bulgularına göre yolsuzluğu negatif etkileyen iki değişken bulunmaktadır. Bunlardan ekonomik özgürlük yolsuzluğu %0,073 ve tüketim vergileri %0,108 negatif etkilemektedir. Diğer taraftan vergi gelirleri (0,064), kişi başına düşen gelir (0,056), ticari açıklık (0,073) ve gelir vergisi oranı (0,063) yolsuzluğu pozitif etkilemektedir. Anahtar Kelimeler: Geçiş ekonomileri, Vergi yapısı, Yolsuzluk, Sabit etkiler, Sistem GMM