The Determinants of Personal Income Tax Progressivity Around the Globe

This paper utilizes a novel database collected by the authors to document features of the progressivity of personal income tax systems across 209 countries for the years 1980-2009. We measure progressivity in several ways. First, we associate it with the increase in effective average (marginal) tax rates between a wage of zero and ten times the average wage in a country. Second, we consider the curvature of the tax schedule expressed as the difference between the effective average (marginal) tax schedule from a wage of zero to ten times the average wage and a linear average tax schedule and, alternatively, the diference between the effective average (marginal) tax schedule from the minimum positive taxable income, to ten times the average wage as opposed to a linear average tax schedule. Moreover, the paper assesses patterns regarding the conditional correlation of country-specifc tax progressivity measures with a host of economic and political country-specific characteristics and find the labor supply elasticity and the income replacement rates for the unemployed to be key determinants of progressivity around the globe, in line with economic theory.

Special Tax Treatment as Trade Policy: A Database on Export Processing and Special Economic Zones

Many countries treat income generated via exports favourably, especially when production takes places in special zones known as export processing zones (EPZs). EPZs can be defined as specific, geographically defined zones or areas that are subject to special administration and that generally offer tax incentives, such as duty‐free imports when producing for export, exemption from other regulatory constraints linked to import for the domestic market, sometimes favourable treatment in terms of industrial regulation, and the streamlining of border clearing procedures. We describe a database of WTO Members that employ special economic zones as part of their industrial policy mix. This is based on WTO notification and monitoring through the WTO’s trade policy review mechanism (TPRM), supplemented with information from the ILO, World Bank, and primary sources. We also provide some rough analysis of the relationship between use of EPZs and the carbon intensity of exports, and relative levels of investment across countries with and without special zones.

A "Beyond WTO" Scenario for Swiss Agriculture: Consequences for Income Generation and the Provision of Public Goods

The conclusion of the Doha Round negotiations is likely to influence Swiss agricultural policy substantially. The same goes for a free trade agreement in agriculture and food with the European Communities. Even though neither of them will bring about duty-free and quota-free market access, or restrict domestic support measures to green box compatible support, both would represent a big step in that direction. There is no empirical evidence on the effect of such a counterfactual scenario for Swiss agriculture. We therefore use a normative mathematical programming model to illustrate possible effects for agricultural production and the corresponding agricultural income. Moreover, we discuss the results with respect to the provision of public goods under the assumption of continuing green box-compatible direct payments. The aim of our article is to bring more transparency into the discussion on the effects of freer and less distorted trade on the income generation by a multifunctional agriculture. The article will be organized as follows. In the first Section we specify the background of our study. In the second section, we focus on the problem statement and our research questions. In Section 3, we describe in detail a counterfactual scenario of “duty-free, quota-free and price support-free” agriculture from an economic as well as a legal perspective. Our methodology and the results are presented in Section 4 and 5 respectively. In Section 6, we discuss our results with respect to economic and legal aspects of multifunctional agriculture.

Income Insecurity and Youth Emancipation: A Theoretical Approach

n this paper, we propose a theoretical model to study the effect of income insecurity of parents and offspring on the child's residential choice. Parents are partially altruistic toward their children and will provide financial help to an independent child when her income is low relative to the parents'. We find that children of more altruistic parents are more likely to become independent. However, first-order stochastic dominance (FOSD) shifts in the distribution of the child's future income (or her parents') have ambiguous effects on the child's residential choice. Parental altruism is the very source of ambiguity in the results. If parents are selfish or the joint income distribution of parents and child places no mass on the region where transfers are provided, a FOSD shift in the distribution of the child's (parents') future income will reduce (raise) the child's current income threshold for independence.

Inequality in Income and Wealth in Switzerland from 1970 to 2010

The supposed rise of inequality in income and wealth is a much-discussed issue. Since in a number of industrialized countries a trend towards more inequality was observed over the last decades, it is often assumed that Switzerland has experienced a similar development. Yet, although a variety of studies exists that provide inequality estimates for the Swiss society at different points in time, no conclusive picture of the changes in inequality can be drawn from these studies. For example, recent estimates by the Swiss Federal Statistical Office indicate that – against expectations – inequality in disposable equivalent-incomes has not risen since the end of the 1990ies, whereas other studies indicate that earnings from employment – especially top salaries – have become more unequal. The reasons for the inconclusive picture are manifold. For example, trends might have been different for different income types and results might strongly depend on the quality of the used data. To close the knowledge gap in inequality research in Switzerland a new Swiss National Science Foundation project by the University of Bern and the Bern University of Applied Sciences has been started in 2013. Individual tax data from cantons will be analyzed along with aggregate data from the Swiss Federal Tax Administration, covering a period from the early 1970ies to the present. The goal is to gain a systematic overview of the development of inequality in income and wealth in Switzerland as a whole and within cantons, and to determine how changes can be explained. In our talk we will present first results from this project.

Low-Income Developing Countries and WTO Litigation: Why Wake Up the Sleeping Dog?

The World Trade Organization (WTO) is one of the most judicialized dispute settlement systems in international politics. While a general appreciation has developed that the system has worked quite well, research has not paid sufficient attention to the weakest actors in the system. This paper addresses the puzzle of missing cases of least-developed countries initiating WTO disputes settlement procedures. It challenges the existing literature on developing countries in WTO dispute settlement which predominantly focuses on legal capacity and economic interests. The paper provides an argument that the small universe of ‘actionable cases’, the option of free riding and the assessment of the perceived opportunity costs related to other foreign policy priorities better explain the absence of cases. In addition (and somewhat counterintuitively), we argue that the absence of cases is not necessarily bad news and shows how the weakest actors can use the dispute settlement system in a ‘lighter version’ or in indirect ways. The argument is empirically assessed by conducting a case study on four West African cotton-producing countries (C4) and their involvement in dispute settlement.

Comparative effectiveness of immediate antiretroviral therapy versus CD4-based initiation in HIV-positive individuals in high-income countries: observational cohort study.

BACKGROUND Recommendations have differed nationally and internationally with respect to the best time to start antiretroviral therapy (ART). We compared effectiveness of three strategies for initiation of ART in high-income countries for HIV-positive individuals who do not have AIDS: immediate initiation, initiation at a CD4 count less than 500 cells per μL, and initiation at a CD4 count less than 350 cells per μL. METHODS We used data from the HIV-CAUSAL Collaboration of cohort studies in Europe and the USA. We included 55 826 individuals aged 18 years or older who were diagnosed with HIV-1 infection between January, 2000, and September, 2013, had not started ART, did not have AIDS, and had CD4 count and HIV-RNA viral load measurements within 6 months of HIV diagnosis. We estimated relative risks of death and of death or AIDS-defining illness, mean survival time, the proportion of individuals in need of ART, and the proportion of individuals with HIV-RNA viral load less than 50 copies per mL, as would have been recorded under each ART initiation strategy after 7 years of HIV diagnosis. We used the parametric g-formula to adjust for baseline and time-varying confounders. FINDINGS Median CD4 count at diagnosis of HIV infection was 376 cells per μL (IQR 222-551). Compared with immediate initiation, the estimated relative risk of death was 1·02 (95% CI 1·01-1·02) when ART was started at a CD4 count less than 500 cells per μL, and 1·06 (1·04-1·08) with initiation at a CD4 count less than 350 cells per μL. Corresponding estimates for death or AIDS-defining illness were 1·06 (1·06-1·07) and 1·20 (1·17-1·23), respectively. Compared with immediate initiation, the mean survival time at 7 years with a strategy of initiation at a CD4 count less than 500 cells per μL was 2 days shorter (95% CI 1-2) and at a CD4 count less than 350 cells per μL was 5 days shorter (4-6). 7 years after diagnosis of HIV, 100%, 98·7% (95% CI 98·6-98·7), and 92·6% (92·2-92·9) of individuals would have been in need of ART with immediate initiation, initiation at a CD4 count less than 500 cells per μL, and initiation at a CD4 count less than 350 cells per μL, respectively. Corresponding proportions of individuals with HIV-RNA viral load less than 50 copies per mL at 7 years were 87·3% (87·3-88·6), 87·4% (87·4-88·6), and 83·8% (83·6-84·9). INTERPRETATION The benefits of immediate initiation of ART, such as prolonged survival and AIDS-free survival and increased virological suppression, were small in this high-income setting with relatively low CD4 count at HIV diagnosis. The estimated beneficial effect on AIDS is less than in recently reported randomised trials. Increasing rates of HIV testing might be as important as a policy of early initiation of ART. FUNDING National Institutes of Health.

Fiscal Federalism and Tax Equalization: The potential for progressive local taxes

We construct an empirically informed computational model of fiscal federalism, testing whether horizontal or vertical equalization can solve the fiscal externality problem in an environment in which heterogeneous agents can move and vote. The model expands on the literature by considering the case of progressive local taxation. Although the consequences of progressive taxation under fiscal federalism are well understood, they have not been studied in a context with tax equalization, despite widespread implementation. The model also expands on the literature by comparing the standard median voter model with a realistic alternative voting mechanism. We find that fiscal federalism with progressive taxation naturally leads to segregation as well as inefficient and inequitable public goods provision while the alternative voting mechanism generates more efficient, though less equitable, public goods provision. Equalization policy, under both types of voting, is largely undermined by micro-actors' choices. For this reason, the model also does not find the anticipated effects of vertical equalization discouraging public goods spending among wealthy jurisdictions and horizontal encouraging it among poor jurisdictions. Finally, we identify two optimal scenarios, superior to both complete centralization and complete devolution. These scenarios are not only Pareto optimal, but also conform to a Rawlsian view of justice, offering the best possible outcome for the worst-off. Despite offering the best possible outcomes, both scenarios still entail significant economic segregation and inequitable public goods provision. Under the optimal scenarios agents shift the bulk of revenue collection to the federal government, with few jurisdictions maintaining a small local tax.