Sales tax enforcement: An empirical analysis of compliance enforcement methodologies and pathologies

Most research on tax evasion has focused on the income tax. Sales tax evasion has been largely ignored and dismissed as immaterial. This paper explored the differences between income tax and sales tax evasion and demonstrated that sales tax enforcement is deserving of and requires the use of different tools to achieve compliance. Specifically, the major enforcement problem with sales tax is not evasion: it is theft perpetrated by companies that act as collection agents for the state. Companies engage in a principal-agent relationship with the state and many retain funds collected as an agent of the state for private use. As such, the act of sales tax theft bears more resemblance to embezzlement than to income tax evasion. It has long been assumed that the sales tax is nearly evasion free, and state revenue departments report voluntary compliance in a manner that perpetuates this myth. Current sales tax compliance enforcement methodologies are similar in form to income tax compliance enforcement methodologies and are based largely on trust. The primary focus is on delinquent filers with a very small percentage of businesses subject to audit. As a result, there is a very large group of noncompliant businesses who file on time and fly below the radar while stealing millions of taxpayer dollars. ^ The author utilized a variety of statistical methods with actual field data derived from operations of the Southern Region Criminal Investigations Unit of the Florida Department of Revenue to evaluate current and proposed sales tax compliance enforcement methodologies in a quasi-experimental, time series research design and to set forth a typology of sales tax evaders. This study showed that current estimates of voluntary compliance in sales tax systems are seriously and significantly overstated and that current enforcement methodologies are inadequate to identify the majority of violators and enforce compliance. Sales tax evasion is modeled using the theory of planned behavior and Cressey’s fraud triangle and it is demonstrated that proactive enforcement activities, characterized by substantial contact with non-delinquent taxpayers, results in superior ability to identify noncompliance and provides a structure through which noncompliant businesses can be rehabilitated.^

The Re-Emergence of Suriname’s Désiré (Desi) Bouterse: Political Acumen and Geopolitical Anxiety

This study examines some concerns that derive from Suriname‘s May-July 2010 elections, which resulted in the re-emergence of erstwhile military ruler and convicted drug trafficker, Désiré (Desi) Bouterse, as President of the Republic. The victory reflects Bouterse‘s political acumen in aggregating disparate political interests and in establishing a viable coalition government. But because of his history and profile, this triumph has generated anxiety in some places internationally. In this respect, the study examines anxieties related to three matters: (a) relations with Guyana, where there is an existing territorial dispute and a recently resolved maritime dispute, (b) illegal drug trafficking operations, and (c) foreign policy engagement with Venezuela. There has been a flurry of bilateral activities—including several presidential summits—with Guyana since President Bouterse‘s inauguration, albeit seemingly more about symbolism than substance. Although the maritime dispute was settled by a Tribunal of the United Nations Convention of the Law of the Sea in 2007, the 15,000 km2 New River Triangle is still unresolved. Indeed, in June 2011 President Bouterse reasserted Suriname‘s claim to the Triangle. Suriname has upped the ante in that dispute by portraying internationally the map of Suriname as inclusive of the disputed area. In all likelihood that self-redefinition slowly will become the country‘s cartographic definition in the eyes of the world if Guyana does not successfully rebuff that move or pursue the definitive settlement of the dispute. A geonarcotics assessment shows Suriname to be still heavily implicated in trafficking, because of geography, law enforcement limitations, corruption, and other factors. But despite Bouterse‘s drug-related history and that of former senior military officers, several reasons suggest the inexpediency of a narco-state being created by Bouterse. As well, as part of Suriname‘s pursuit of increased Caribbean and South American engagement, it has boosted relations with Venezuela, which has included it in PetroCaribe and provided housing and agricultural aid. However, the engagement appears to be driven more by pragmatism and less by any ideological affinity with Hugo Chavez.

Latin America and the Caribbean in 2011 and Beyond: A conversation among Latin America and Caribbean Specialists.

For the first time in more than fifty years, the domestic and external conflicts in Latin America and the Caribbean (LAC) are not primarily ideological in nature. Democracy continues to thrive and its promise still inspires hope. In contrast, the illegal production, consumption, and trading of drugs – and its links to criminal gangs and organizations – represent major challenges to the region, undermining several States’ already weak capacity to govern. While LAC macroeconomic stability has remained resilient, illegal economies fill the region, often offering what some States have not historically been able to provide – elements of human security, opportunities for social mobility, and basic survival. Areas controlled by drug trafficking organizations (DTOs) are now found in Central America, Mexico, and the favelas of Rio de Janeiro and São Paulo, reflecting their competition for land routes and production areas. Cartels such as La Familia, Los Zetas, and Primeiro Comando da Capital (PCC-Brazil), among others, operate like trade and financial enterprises that manage millions of dollars and resources, demonstrating significant business skills in adapting to changing circumstances. They are also merciless in their application of violence to preserve their lucrative enterprises. The El Salvador-Guatemala-Honduras triangle in Central America is now the most violent region in the world, surpassing regions in Africa that have been torn by civil strife for years. In Brazil’s favelas and Guatemala’s Petén region, the military is leaving the barracks again; not to rule, however, but to supplement and even replace the law enforcement capacity of weak and discredited police forces. This will challenge the military to apply lessons learned during the course of their experience in government, or from the civil wars that plagued the region for nearly 50 years during the Cold War. Will they be able to conduct themselves according to the professional ethics that have been inculcated over the past 20 years without incurring violations of human rights? Belief in their potential to do good is high according to many polls as the Armed Forces still enjoy a favorable perception in most societies, despite frequent involvement in corruption. Calling them to fight DTOs, however, may bring them too close to the illegal activities they are being asked to resist, or even rekindle the view that only a “strong hand” can resolve national troubles. The challenge of governance is occurring as contrasts within the region are becoming sharper. There is an increasing gap between nations positioned to surpass their “developing nation” status and those that are practically imploding as the judicial, political and enforcement institutions fall further into the quagmire of illicit activities. Several South American nations are advancing their political and economic development. Brazil in particular has realized macro-economic stability, made impressive gains in poverty reduction, and is on track to potentially become a significant oil producer. It is also an increasingly influential power, much closer to the heralded “emerging power” category that it aspired to for most of the 20th century. In contrast, several Central American States have become so structurally deficient, and have garnered such limited legitimacy, that their countries have devolved into patches of State controlled and non-State-controlled territory, becoming increasingly vulnerable to DTO entrenchment. In the Caribbean, the drug and human trafficking business also thrives. Small and larger countries are experiencing the growing impact of illicit economies and accompanying crime and violence. Among these, Guyana and Suriname face greater uncertainty, as they juggle both their internal affairs and their relations with Brazil and Venezuela. Cuba also faces new challenges as it continues focusing on internal rather than external affairs and attempts to ensure a stable leadership succession while simultaneously trying to reform its economy. Loosening the regime’s tight grip on the economy while continuing to curtail citizen’s civil rights will test the leadership’s ability to manage change and prevent a potential socio-economic crisis from turning into an existential threat. Cuba’s past ideological zest is now in the hands of Venezuela’s President Hugo Chavez, who continues his attempts to bring the region together under Venezuelan leadership ideologically based on a “Bolivarian” anti-U.S. banner, without much success. The environment and natural disasters will merit more attention in the coming years. Natural events will produce increasing scales of destruction as the States in the region fail to maintain and expand existing infrastructure to withstand such calamities and respond to their effects. Prospects for earthquakes, tsunamis, and hurricanes are high, particularly in the Caribbean. In addition, there are growing rates of deforestation in nearly every country, along with a potential increase in cross-sector competition for resources. The losers might be small farmers, due to their inability to produce quantities commensurate to larger conglomerates. Regulations that could mitigate these types of situations are lacking or openly violated with near impunity. Indigenous and other vulnerable populations, including African descendants, in several Andean countries, are particularly affected by the increasing extraction of natural resources taking place amongst their terrain. This has led to protests against extraction activities that negatively affect their livelihoods, and in the process, these historically underprivileged groups have transitioned from agenda-based organization to one that is bringing its claims and grievances to the national political agenda, becoming more politically engaged. Symptomatic of these social issues is the region’s chronically poor quality of education that has consistently failed to reduce inequality and prepare new generations for jobs in the competitive global economy, particularly the more vulnerable populations. Simultaneously, the educational deficit is also exacerbated by the erosion of access to information and freedom of the press. The international panorama is also in flux. New security entities are challenging the old establishment. The Union of South American Nations, The South American Defense Council, the socialist Bolivarian Alliance, and other entities seem to be defying the Organization of American States and its own defense mechanisms, and excluding the U.S. And the U.S.’s attention to areas in conflict, namely Iraq, Afghanistan, and Pakistan – rather than to the more stable Latin America and Caribbean – has left ample room for other actors to elbow in. China is now the top trading partner for Brazil. Russian and Iran are also finding new partnerships in the region, yet their links appear more politically inclined than those of China. Finally, the aforementioned increasing commercial ties by LAC States with China have accelerated a return to the preponderance of commodities as sources of income for their economies. The increased extraction of raw material for export will produce greater concern over the environmental impact that is created by the exploitation of natural resources. These expanded trade opportunities may prove counterproductive economically for countries in the region, particularly for Brazil and Chile, two countries whose economic policies have long sought diversification from dependence on commodities to the development of service and technology based industries.

Restaurant Customer Loyalty: A Qualitative Assessment of Niche Brands

Using the Loyalty Triangle framework developed by Lewis and Shoemaker (1999) and focus group methodology, the study examined how a niche brand restaurant best achieved long-term loyalty. Results indicate that customers are loyal to a niche brand because of the unique characteristics inherent to the brand. Customers have higher perceptions of such qualities as the presentation of service, consistency of product, and the benefits offered by the loyalty program than characteristics that are shared across all brands. Niche brand restaurants can be more effective in developing these qualities to promote customer loyalty.

Infants' detection of synchrony between sounds and pauses in the movement of an object

The present study investigated the development of sensitivity to temporal synchrony between sounds of impact and pauses in the movement of an object by infants of 2 1/2, 4 and 6 months of age. Ninety infants were tested across four experiments with side-by-side videos of a red and white square and a blue and yellow triangle along with a centralized soundtrack which was synchronized with only one of the films. This preference phase was then followed by a search phase, where the two films were accompanied by intermittent bursts of the soundtrack from each object. Twomonth- olds showed no evidence of matching films and soundtracks on the basis of synchrony, however 4-month-olds looked more on the second block of trials to the object which paused when the sound occurred and directed more first looks during the preference phase to the matching object. Six-month-olds demonstrated significantly more first looks to the mismatched object during the search phase only. These results suggest that infants relate impact sounds with synchronous pauses in continuous motion by the age of four months.