Tax evasion, inequality, and progressive taxes : a political economy perspective

The standard approach to tax compliance applies the economics-of-crime methodology pioneered by Becker (1968): in its first application, due to Allingham and Sandmo (1972) it models the behaviour of agents as a decision involving a choice of the extent of their income to report to tax authorities, given a certain institutional environment, represented by parameters such as the probability of detection and penalties in the event the agent is caught. While this basic framework yields important insights on tax compliance behavior, it has some critical limitations. Specifically, it indicates a level of compliance that is significantly below what is observed in the data. This thesis revisits the original framework with a view towards addressing this issue, and examining the political economy implications of tax evasion for progressivity in the tax structure. The approach followed involves building a macroeconomic, dynamic equilibrium model for the purpose of examining these issues, by using a step-wise model building procedure starting with some very simple variations of the basic Allingham and Sandmo construct, which are eventually integrated to a dynamic general equilibrium overlapping generations framework with heterogeneous agents. One of the variations involves incorporating the Allingham and Sandmo construct into a two-period model of a small open economy of the type originally attributed to Fisher (1930). A further variation of this simple construct involves allowing agents to initially decide whether to evade taxes or not. In the event they decide to evade, the agents then have to decide the extent of income or wealth they wish to under-report. We find that the ‘evade or not’ assumption has strikingly different and more realistic implications for the extent of evasion, and demonstrate that it is a more appropriate modeling strategy in the context of macroeconomic models, which are essentially dynamic in nature, and involve consumption smoothing across time and across various states of nature. Specifically, since deciding to undertake tax evasion impacts on the consumption smoothing ability of the agent by creating two states of nature in which the agent is ‘caught’ or ‘not caught’, there is a possibility that their utility under certainty, when they choose not to evade, is higher than the expected utility obtained when they choose to evade. Furthermore, the simple two-period model incorporating an ‘evade or not’ choice can be used to demonstrate some strikingly different political economy implications relative to its Allingham and Sandmo counterpart. In variations of the two models that allow for voting on the tax parameter, we find that agents typically choose to vote for a high degree of progressivity by choosing the highest available tax rate from the menu of choices available to them. There is, however, a small range of inequality levels for which agents in the ‘evade or not’ model vote for a relatively low value of the tax rate. The final steps in the model building procedure involve grafting the two-period models with a political economy choice into a dynamic overlapping generations setting with more general, non-linear tax schedules and a ‘cost-of evasion’ function that is increasing in the extent of evasion. Results based on numerical simulations of these models show further improvement in the model’s ability to match empirically plausible levels of tax evasion. In addition, the differences between the political economy implications of the ‘evade or not’ version of the model and its Allingham and Sandmo counterpart are now very striking; there is now a large range of values of the inequality parameter for which agents in the ‘evade or not’ model vote for a low degree of progressivity. This is because, in the ‘evade or not’ version of the model, low values of the tax rate encourages a large number of agents to choose the ‘not-evade’ option, so that the redistributive mechanism is more ‘efficient’ relative to the situations in which tax rates are high. Some further implications of the models of this thesis relate to whether variations in the level of inequality, and parameters such as the probability of detection and penalties for tax evasion matter for the political economy results. We find that (i) the political economy outcomes for the tax rate are quite insensitive to changes in inequality, and (ii) the voting outcomes change in non-monotonic ways in response to changes in the probability of detection and penalty rates. Specifically, the model suggests that changes in inequality should not matter, although the political outcome for the tax rate for a given level of inequality is conditional on whether there is a large or small or large extent of evasion in the economy. We conclude that further theoretical research into macroeconomic models of tax evasion is required to identify the structural relationships underpinning the link between inequality and redistribution in the presence of tax evasion. The models of this thesis provide a necessary first step in that direction.

Knowledge economy market development mapping study

The knowledge economy relies on the diffusion and use of knowledge as well as its creation (Houghton and Sheenan, 2000). The future success of economic activity will depend on the capacity of organisations to transform by increasing their flexibility. In particular, this transformation is dependant on a decentralised, networked and multi-skilled workforce. To help organisations transition, new strategies and structures for education are required. Education systems need to concentrate less on specialist skills and more on the development of people with broad-based problem solving skills that are adaptable, with social and inter-personal communication skills necessary for networking and communication. This paper presents the findings of a ‘Knowledge Economy Market Development Mapping Study’ conducted to identify the value of design education programs from primary through to tertiary level in Queensland, Australia. The relationship of these programs to the development of the capacities mentioned above is explored. The study includes the collection of qualitative and quantitative data consisting of a literature review, focus groups and survey. Recommendations for the future development of design education programs in Queensland, Australia are proposed, and future research opportunities are presented and discussed.

The creative citizen : understanding the value of design education programs in the knowledge economy

The knowledge economy relies on the diffusion and use of knowledge as well as its creation (Houghton and Sheenan, 2000). The future success of economic activity will depend on the capacity of organisations to transform by increasing their flexibility. In particular, this transformation is dependant on a decentralised, networked and multi-skilled workforce. To help organisations transition, new strategies and structures for education are required. Education systems need to concentrate less on specialist skills and more on the development of people with broad-based problem solving skills that are adaptable, with social and inter-personal communication skills necessary for networking and communication. This paper presents the findings of a ‘Knowledge Economy Market Development Mapping Study’ conducted to identify the value of design education programs from primary through to tertiary level in Queensland, Australia. The relationship of these programs to the development of the capacities mentioned above is explored. The study includes the collection of qualitative and quantitative data consisting of a literature review, focus groups and survey. Recommendations for the future development of design education programs in Queensland, Australia are proposed, and future research opportunities are presented and discussed.

e-Technology v t-Engagement : a snapshot of Australia's digital economy readiness

Before e-Technology’s effects on users can be accurately measured, those users must be fully engaged with the relevant systems and services. That is they must be able to function as part of the digital economy. The paper refers to this ‘user functionality’ as t-Engagement. Not all users are t-Engaged and in many instances achieving t-Engagement will require assistance from external sources. This paper identifies the current state of Australia’s regional digital economy readiness and highlights the role of Local Government Authorities (‘LGAs’) in enabling t-Engagement. The paper analyses responses to the 2012 BTA, NBN and Digital Economy Survey by LGA and other regional organizations within Australia. The paper’s particular focus is on the level of use by Local Government Authorities of federal, state and other programs designed to enable t-Engagement. The analysis confirms the role of LGAs in enabling t-Engagement and in promoting Australia’s digital economy. The paper concludes by reinforcing the need to ensure ongoing meaningful federal and State support of regional initiatives, as well as identifying issues requiring specific attention.

Disaster resilience and local adaptation capacity in coastal Queensland

The 2011 floods illustrated once again Queensland’s vulnerability to flooding and similar disasters. Climate change will increase the frequency and magnitude of such events and will have a variety of other impacts. To deal with these impacts governments at all levels need to be prepared and work together. Like the rest of the nation most of the population of the state is located in the coastal areas and these areas are more vulnerable to the impacts of climate change. This paper examines climate change adaptation efforts in coastal Queensland. The aim is increasing local disaster resilience of people and property through fostering coordination between local and state government planning activities in coastal high hazard areas. By increasing the ability of local governments and state agencies to coordinate planning activities, we can help adapt to impacts of climate change. Towards that end, we will look at the ways that these groups currently interact, especially with regard to issues involving uncertainty related to climate change impacts. Through an examination of climate change related activities by Queensland’s coastal local governments and state level planning agencies and how they coordinate their planning activities at different levels we aim to identify the weaknesses of the current planning system in responding to the challenges of climate change adaptation and opportunities for improving the ways we plan and coordinate planning, and make recommendations to improve resilience in advance of disasters so as to help speed up recovery when they occur.

Militarism and International Relations : Political economy, security, theory, edited by Anna Stavrianakis and Jan Selby, Abingdon, Routledge, 2012, 212 pp., £80.00 (hardback), ISBN 978-0-415-61491-7

An engaging narrative is maintained throughout this edited collection of articles that address the issue of militarism in international relations. The book seamlessly integrates historical and contemporary perspectives on militarism with theory and relevant international case studies, resulting in a very informative read. The work is comprised of three parts. Part 1 deals with the theorisation of militarism and includes chapters by Anna Stavrianakis and Jan Selby, Martin Shaw, Simon Dalby, and Nicola Short. It covers a range of topics relating to historical and contemporary theories of militarism, geopolitical threat construction, political economy, and the US military’s ‘cultural turn’.

The political economy of food in schools : the case of Queensland State education

Food in schools is typically understood from a biomedical perspective. At practical, ideational and material levels, whether addressed pedagogically or bureaucratically, food in schools is generally considered from a natural sciences perspective. This perspective manifests as the bioenergetic principle of energy in versus energy out and appears in policy focused on issues such as obesity and physical activity. Despite the considerable literature on the sociology of food and eating, little is understood about food in schools from a sociological perspective. This oversight of one of the most fundamental requirements of the human condition--namely, food--should be of concern for educators. Investigating food through a political economy lens means understanding food in schools as part of broader economic, political, social and cultural conditions. Hence, a political economy of food and schooling is concerned with the formation of ideas about food relative to political, economic, and cultural ideologies in social practice. From a critical sociology study of food messages students receive in the primary school curriculum, this paper reports on some of the official food messages of an Australian state's education policy, as a case to highlight the current political economy of food in Australia. It examines the role of the corporate food industry in the formation of Australian food policy and how that policy created artefacts infused with competing messages. The paper highlights how food and nutrition policy moved from solely a health concern to incorporate an economic dimension and links that shift with the quality of food available in Queensland schools.

Corporate governance as social responsibility : a meta-regulation approach to raise social responsibility of corporate governance in a weak economy

Corporate governance (CG) denotes the rules of business decision-making and directs the internal mechanism of companies to follow the output of the rules. It includes the customs, policies, laws and institutions as a set of processes that affects the way in which a corporation is directed, administered or controlled.

Handbook on the Knowledge Economy : Volume Two

The second volume of the Handbook on the Knowledge Economy is a worthy companion to the highly successful original volume published in 2005, extending its theoretical depth and developing its coverage. Together the two volumes provide the single best work and reference point for knowledge economy studies. The second volume with fifteen original essays by renowned scholars in the field, provides insightful and robust analyses of the development potential of the knowledge economy in all its aspects, forms and manifestations.

Critical discourse analysis and political economy of communication : understanding the new corporate order

This article uses critical discourse analysis to analyse material shifts in the political economy of communications. It examines texts of major corporations to describe four key changes in political economy: (1) the separation of ownership from control; (2) the separation of business from industry; (3) the separation of accountability from responsibility; and (4) the subjugation of ‘going concerns’ by overriding concerns. The authors argue that this amounts to a political economic shift from traditional concepts of ‘capitalism’ to a new ‘corporatism’ in which the relationships between public and private, state and individual interests have become redefined and obscured through new discourse strategies. They conclude that the present financial and regulatory ‘crisis’ cannot be adequately resolved without a new analytic framework for examining the relationships between corporation, discourse and political economy.

Australian copyright regimes and political economy of music

In this chapter I review the history of copyright in Australia through a singular and exemplary ruling of the Australian High Court made in 2012 and then relate that to the declining fortunes of Australian recorded music professionals. The case in point is Phonographic Performance Company [PPCA] of Australia Limited v Commonwealth of Australia [2012] HCA 8 (hereafter, HCA 8 2012). The case encapsulates the history of copyright law in Australia, with the judicial decision drawing substantive parts of its rationale from the Statute of Anne (8 Anne, c. 19, 1710), as well as copyright acts that regulated the Australian markets prior to 1968. More importantly the High Court decision serves to delineate some important political economic aspects of the recorded music professional in Australia and demonstrates Attali’s (1985) assertion that copyright is the mechanism through which composers are, by statute, literally excluded from capitalistic engagement as ‘productive labour’.

Brave new green world : consequences of a carbon economy for the conservation of Australian biodiversity

Pricing greenhouse gas emissions is a burgeoning and possibly lucrative financial means for climate change mitigation. Emissions pricing is being used to fund emissions-abatement technologies and to modify land management to improve carbon sequestration and retention. Here we discuss the principal land-management options under existing and realistic future emissions-price legislation in Australia, and examine them with respect to their anticipated direct and indirect effects on biodiversity. The main ways in which emissions price-driven changes to land management can affect biodiversity are through policies and practices for (1) environmental plantings for carbon sequestration, (2) native regrowth, (3) fire management, (4) forestry, (5) agricultural practices (including cropping and grazing), and (6) feral animal control. While most land-management options available to reduce net greenhouse gas emissions offer clear advantages to increase the viability of native biodiversity, we describe several caveats regarding potentially negative outcomes, and outline components that need to be considered if biodiversity is also to benefit from the new carbon economy. Carbon plantings will only have real biodiversity value if they comprise appropriate native tree species and provide suitable habitats and resources for valued fauna. Such plantings also risk severely altering local hydrology and reducing water availability. Management of regrowth post-agricultural abandonment requires setting appropriate baselines and allowing for thinning in certain circumstances, and improvements to forestry rotation lengths would likely increase carbon-retention capacity and biodiversity value. Prescribed burning to reduce the frequency of high-intensity wildfires in northern Australia is being used as a tool to increase carbon retention. Fire management in southern Australia is not readily amenable for maximising carbon storage potential, but will become increasingly important for biodiversity conservation as the climate warms. Carbon price-based modifications to agriculture that would benefit biodiversity include reductions in tillage frequency and livestock densities, reductions in fertiliser use, and retention and regeneration of native shrubs; however, anticipated shifts to exotic perennial grass species such as buffel grass and kikuyu could have net negative implications for native biodiversity. Finally, it is unlikely that major reductions in greenhouse gas emissions arising from feral animal control are possible, even though reduced densities of feral herbivores will benefit Australian biodiversity greatly.

Modelling surface and shallow groundwater interactions in an ungauged subtropical coastal catchment using the SWAT model, Elimbah Creek, southeast Queensland, Australia

The study presented here applies the highly parameterised semi-distributed U.S. Department of Agriculture Soil and Water Assessment Tool (SWAT) to an Australian subtropical catchment. SWAT has been applied to numerous catchments worldwide and is considered to be a useful tool that is under ongoing development with contributions coming from different research groups in different parts of the world. In a preliminary run the SWAT model application for the Elimbah Creek catchment has estimated water yield for the catchment and has quantified the different sources. For the modelling period of April 1999 to September 2009 the results show that the main sources of water in Elimbah Creek are total surface runoff and lateral flow (65%). Base-flow contributes 36% to the total runoff. On a seasonal basis modelling results show a shift in the source of water contributing to Elimbah Creek from surface runoff and lateral flow during intense summer storms to base-flow conditions during dry months. Further calibration and validation of these results will confirm that SWAT provides an alternative to Australian water balance models.

The changing role of copyright in China’s emergent media economy

This chapter introduces the changing role of copyright in China from a historical perspective. It begins by briefly tracing the history of copyright, from a censorship-related system associated with the emergence of the printing press in imperial China, through modernisation during the Republican period, abolition under communism and finally to the introduction of the People's Republic of China's (PRC) first copyright law in 1990 and the nation's entry into the World Trade Organisation (WTO) in 2001.

Resilient Maroochydore 2029 : Urban Design Futures

Resilient Maroochydore 2029 This exhibition showcases the work of 4th year undergraduate Landscape Architecture students in response to issues of sustainability in Maroochydore on the Queensland Sunshine coast. The projects comprising this exhibition all investigate possible design futures for the Maroochydore Centre, in the light of a series of new disturbance scenarios. Specific disturbances upon the landscape have been imagined, and design resolutions developed based on resilience to these disturbances. The proposals investigate how the Maroochydore Centre might respond to these scenarios, and how future components of the Centre might be designed for greater ‘resilience’. The Exhibition Five groups of students (32 in total) produced five strategic planning and design options toward this future: Team Transect: “What happens to a region following a sustained period of economic prosperity, with affordable property and negligible unemployment? This proposal investigates the effects on a community of massive population explosion, land shortages and inadequate planning regulations following an extended boom period.” The Foodfighters: “This proposal considers the scenario of massive food shortages and of escalating prices, and the possibility of government intervention to stabilise food supply. Strategies based upon simplified, collaborative approaches to food production are investigated.” The TTMKG: “This proposal explores the scenario of Peak Oil and the subsequent effects on society of homelessness, large scale unemployment, food shortages and global financial and political instability. Individual opportunities are restricted by the limitations of bicycle transportation.” Team Peak: “Peak Oil has restricted private vehicle transport to only the most wealthy, while public transport systems are under immense pressure. Rising unemployment drives localised trade initiatives, and the global import/export market has collapsed. This proposal considers the transition of a community from its position in a global economy to that of a relocalised economy, where basic needs are secured as close to home as possible.” After the City: “A rapid population decline as a result of the region’s failing economy has resulted in a fragmented urban fabric. This proposal investigates the possibility of new suburbanisation, reinterpretation and reinvention of space through phased processes.”