Progressivity in the Portuguese personal income tax system

This Work Project analyzes the evolution of the Portuguese personal income tax system’s progressivity over the period of 2005 through 2013. It presents the first computation of cardinal progressivity measures using administrative tax data for Portugal. We compute several progressivity indices and find that progressivity has had very modest variations from 2005 to 2012, whilst from 2012 to 2013 there has been a relatively stronger decrease, excluding the impact of the income tax surcharge of the years 2012 and 2013. When this latter is included, progressivity of 2012 and 2013 decreases considerably. Analyzing the effective average tax rates of the top income percentiles in the income scale, we find that these rates have increased over the period 2010–2013, suggesting that an analysis of effective tax rates is insufficient to assess progressivity in the whole tax scheme.

Tax compliance and tax complexity in Portugal: essays on the perception of tax professionals

Tese de Doutoramento em Contabilidade.

Prevalencia de Trastornos Mentales en consultantes de Centros de Atención Primaria de la Ciudad de Córdoba, Argentina.Prevalence of Mental Disorders among Consultants in Primary Health Care Centers of the City of Córdoba, Argentina

El informe de la Organización Mundial de la Salud (2001), refiere que en un plazo de 20 años los trastornos mentales pasarán a ser la segunda causa dentro de la carga de morbilidad a nivel mundial, y en la actualidad una de cada cuatro personas padece de algún trastorno mental en alguna etapa de su vida. Los estudios realizados en diversos países revelan que una proporción importante de los consultantes de la atención primaria en salud presentan algún tipo de trastornos mentales. Desde esta perspectiva, la atención primaria de la salud ofrece una oportunidad de intervenir en el manejo de los trastornos mentales de forma temprana y eficaz. En Argentina, es limitada la información acerca del registro epidemiológico en salud mental, no contando con estudios abordados desde la Atención Primaria en la provincia de Córdoba. El objetivo general del proyecto es estimar la prevalencia de trastornos mentales entre los consultantes de atención primaria por problemas de salud general. Para ello se propone: Estimar la prevalencia de trastornos mentales en una muestra representativa de consultantes adultos por problemas de salud general, de centros de atención primaria de la ciudad de Córdoba, identificar y describir los tipos de trastornos mentales que presentan estos consultantes adultos de centros de atención primaria y analizar la prevalencia de los trastornos mentales por sexo y edad de la población en estudio. Metodología: el estudio se realizará en consultorios de Atención Primaria de Salud distribuídos en todo el éjido de la ciudad, teniendo en cuenta la representación de las 12 zonas de CPC. La muestra es probabilística, estratificada, polietápica de pacientes que consultan en el primer nivel de atención. Se entrevistarán 1200 pacientes utilizando la versión computorizada del CIDI 3.0, que proporciona diagnóstico de acuerdo a la DSM IV y la CIE-10. La confiabilidad y la validez del instrumento ha sido ampliamente documentada y la traducción de la encuesta al español fue realizada conforme a las recomendaciones de la OMS. El análisis efectuado será de prevalencia de Trastornos Mentales y del Comportamiento (TMC),asociación entre factores sociodemográficos y TCM estimados calculando las razones de disparidad (odds ratio), regresión logística a fin de ajustar los resultados por la posible interacción entre variables, análisis de la asociación de todas las variables con los TMC, análisis univariado de la asociación de cada variable con los TMC, controlando sexo y edad, se construirá un modelo de regresión logística. En todos los casos el nivel de significación será de 0,05. El equipo de trabajo, de cooperación internacional entre profesionales de la UNC y de la Universidad de Chile, y con la participación en colaboración de los profesionales dependientes de la Secretaría de Salud de la municipalidad de Córdoba, representa un avance para trabajar en los centros de salud de esta ciudad, constituyéndose en un avance, cualitativo y cuantitativo de la actividad científica en Atención Primaria en salud mental con abordaje epidemiológico. Se espera contribuir al conocimiento acerca de la prevalencia de los problemas de salud mental de esta población en la ciudad de Córdoba, proporcionando información a los funcionarios y responsables por la gestión de las áreas vinculadas a la salud mental, aportando conocimiento que promueva una temprana identificación de riesgos iniciales en salud mental y conductas de cuidado en la población como potencial de bienestar.Así mismo, se espera sistematizar una experiencia que pueda ser replicada en otros sitios geográficos. Por todo lo anterior, esta propuesta permitirá conocer por primera vez en la ciudad de Córdoba la frecuencia y características de los problemas de salud mental entre consultantes de Atención Primaria, información fundamental para el desarrollo posterior de estrategias que busquen mejorar la detección y el tratamiento de estos problemas. According to the WHO Report (2001), in 20 years, mental health disorders (MHDs) will be the world’s second most frequent cause of morbidity. Primary care offers the opportunity to handle MHDs efficiently at an early stage. In Argentina, the epidemiologic data on mental health (MH) is limited, and there are no records for Córdoba. The aim of this project is to assess the prevalence of MHDs among consultants who resort to primary health centers (PHCCs) in the city of Córdoba for common health problems, by using a representative sample of adult consultants, identifying and describing the types of MHDs evinced, and analysing prevalence by sex and age group under study. Methodology:the study will be carried out in PHCCs located in the municipal area of Córdoba, covering the 12 zones corresponding to the CPCs (municipal branch offices for each zone). A multi-stage stratified random sample of 1200 patients will be interviewed using the program CIDI 3.0 to produce a diagnostic according to DSM IV and CIE-10, a tool with proven reliability and validity.The aspects to be analysed are prevalence of mental and behavior disorders, their association with socio-demographic factors estimated by odds ratios, logistic regression for adjustment of potential interaction among variables, association with all variables, and univariate analysis for association with each variable. Significance level will be 0.05 in all cases. The international teamwork including professionals from the Universities of Córdoba, Chile and the Public Health Department of the Municipality of Córdoba constitutes a qualitative and quantitative step forward in the field of primary health care studies with an epidemiologic approach. This project aims at providing administrators in the MH area with data for the early detection of initial risks in MH and the promotion of prevention habits. This will be the first study conducted in Córdoba, and is aimed at facilitating replication in other geographical areas.

On the relation between tax rates and evasion in a multi-period economy

We extend the basic tax evasion model to a multi-period economy exhibiting sustained growth. When individuals conceal part of their true income from the tax authority, they face the risk of being audited and hence of paying the corresponding fine. Both taxes and fines determine individual saving and the rate of capital accumulation. In this context we show that the sign of the relation between the level of the tax rate and the amount of evaded income is the same as that obtained in static setups. Moreover, high tax rates on income are typically associated with low growth rates as occurs in standard growth models that disregard the tax evasion phenomenon.

Settlement in tax evasion prosecution

It is often argued that even if optimal ex-post, settlement dilutes deterrence ex-ante. We analyze the interest for the tax authority of committing, ex-ante, to a settlement strategy. We show that to commit to the use of settlements is ex-ante optimal when the tax authority receives signals that provide statistical information about the taxpayers' true tax liability. The more informative the signal, the larger the additional expected evenue raised by the tax authority when using settlement as a policy tool.

The Proposals for a European tax on CO2 and their implications for intercountry distribution

This paper analyzes the advantages and implications of the implementation of a European tax on carbon dioxide emissions as an own resource of the European Union. In contrast to a harmonized tax, which would only have distributive effects within each member state, a tax collected at European scale would also have important distributive effects among different countries. These effects would also depend on the use of tax revenues. The paper investigates the distributive effects among the member states of three tax models: a pure CO2

Tax differentials and agglomeration economies in intraregional firm location

This paper analyses empirically how differences in local taxes affect the intraregional location of new manufacturing plants. These effects are examined within the random profit maximization framework while accounting for the presence of different types of agglomeration economies (localization/ urbanization/ Jacobs’ economies) at the municipal level. We look at the location decision of more than 10,000 establishments locating between 1996 and 2003 across more than 400 municipalities in Catalonia, a Spanish region. It is necessary to restrict the choice set to the local labor market and, above all, to control for agglomeration economies so as to identify the effects of taxes on the location of new establishments.

An empirical analysis of wealth taxation: equity Vs.tax compliance

Capital taxation is currently under debate, basically due to problems of administrative control and proper assessment of the levied assets. We analyze both problems focusing on a capital tax, the annual wealth tax (WT), which is only applied in five OECD countries, being Spain one of them. We concentrate our analysis on top 1% adult population, which permits us to describe the evolution of wealth concentration in Spain along 1983-2001. On average top 1% holds about 18% of total wealth, which rises to 19% when tax incompliance and under-assessment is corrected for housing, the main asset. The evolution suggests wealth concentration has risen. Regarding WT, we analyze whether it helps to reduce wealth inequality or, on the contrary, it reinforces vertical inequity (due to especial concessions) and horizontal inequity (due to the de iure and to de facto different treatment of assets). We analyze in detail housing and equity shares. By means of a time series analysis, we relate the reported values with reasonable price indicators and proxies of the propensity to save. We infer net tax compliance is extremely low, which includes both what we commonly understand by (gross) tax compliance and the degree of under-assessment due to fiscal legislation (for housing). That is especially true for housing, whose level of net tax compliance is well below 50%. Hence, we corroborate the difficulties in taxing capital, and so cast doubts on the current role of the WT in Spain in reducing wealth inequality.

Changes in the demand for private medical insurance following a shift in tax incentives

The 1998 Spanish reform of the Personal Income Tax eliminated the 15% deduction for private medical expenditures including payments on private health insurance (PHI) policies. To avoid an undesirable increase in the demand for publicly funded health care, tax incentives to buy PHI were not completely removed but basically shifted from individual to group employer-paid policies. In a unique fiscal experiment, at the same time that the tax relief for individually purchased policies was abolished, the government provided for tax allowances on policies taken out through employment. Using a bivariate probit model on data from National Health Surveys, we estimate the impact of said reform on the demand for PHI and the changes occurred within it. Our findings suggest that the total probability of buying PHI was not significantly affected. Indeed, the fall in the demand for individual policies (by 10% between 1997 and 2001) was offset by an increase in the demand for group employer-paid ones, so that the overall size of the market remained virtually unchanged. We also briefly discuss the welfare effects on the state budget, the industry and society at large.

Multinational Firms’ Heterogeneity in Tax Responsiveness: the Role of Transfer Pricing

In this paper we show that the ability of multinational firms to manipulate transfer prices affects the tax sensitivity of foreign direct investment (FDI). We offer a model of international capital allocation where firms are heterogeneous in their ability to manipulate transfer prices. Perhaps paradoxically, we show that the ability to shift profits can make parent companies' investment more sensitive to host-country tax rates, as long as investors expect fisscal authorities to use price and profit detection methods. We then offer a comprehensive empirical study to test our predictions in the case of Japanese FDI. We exploit the finding that the unobservable ability to manipulate transfer prices is correlated with whole ownership of a±liates and R&D expenditure. Based on country, parent firm and sector characteristics, we estimate an investment equation on a sample of 3614 Japanese affiliates in 49 emerging countries. We obtain a greater semi-elasticity of investment to the statutory tax rate in a±liates that are wholly-owned and that have R&D intensive parents. We interpret these results as indirect evidence that abusive transfer pricing is one of the determinants of FDI activity.

Tax Structure, Growth and Welfare in the UK

This paper studies the quantitative implications of changes in the composition of taxes for long-run growth and expected lifetime utility in the UK economy over 1970-2005. Our setup is a dynamic stochastic general equilibrium model incorporating a detailed scal policy struc- ture, and where the engine of endogenous growth is human capital accumulation. The government s spending instruments include pub- lic consumption, investment and education spending. On the revenue side, labour, capital and consumption taxes are employed. Our results suggest that if the goal of tax policy is to promote long-run growth by altering relative tax rates, then it should reduce labour taxes while simultaneously increasing capital or consumption taxes to make up for the loss in labour tax revenue. In contrast, a welfare promoting policy would be to cut capital taxes, while concurrently increasing labour or consumption taxes to make up for the loss in capital tax revenue.

Do political incentives matter for tax policies? Ideology, opportunism and the tax structure

This paper investigates the importance of political ideology and opportunism in the choice of the tax structure. In particular, we examine the effects of cabinet ideology and elections on the distribution of the tax burden across factors of production and consumption for 21 OECD countries over the period 1970-2000 by employing four alternative cabinet ideology measures and by using the methodology of effective tax rates. There is evidence of both opportunistic and partisan effects on tax policies. More precisely, we find that left-wing governments rely more on capital relative to labor income taxation and that they tend to increase consumption taxes. Moreover, we find that income tax rates (but not consumption taxes) tend to be reduced in preelectoral periods and that capital effective tax rates (defined broadly to include taxes on selfemployed income) are reduced by more than effective labor tax rates.

Are two tax rates better than one?

Abstract: Should two–band income taxes be progressive given a general income distribution? We provide a negative answer under utilitarian and max-min welfare functions. While this result clarifies some ambiguities in the literature, it does not rule out progressive taxes in general. If we maximize total or weighted utility of the poor, as often intended by the society, progressive taxes can be justified, especially when the ‘rich’ are very rich. Under these objectives we obtain new necessary conditions for progressive taxes, which only depend on aggregate features of income distributions. The validity of these conditions is examined using plausible income distributions.

Inverted Haavelmo Effects in a General Equilibrium Analysis of the Impact of Implementing the Scottish Variable Rate of Income Tax.

The Scottish Parliament has the authority to make a balanced-budget expansion or contraction in public expenditure, funded by corresponding local changes in the basic rate of income tax of up to 3p in the pound. This fiscal adjustment is known as the Scottish Variable Rate of income tax, though it has never, as yet, been used. In this paper we attempt to identify the impact on aggregate economic activity in Scotland of implementing these devolved fiscal powers. This is achieved through theoretical analysis and simulation using a Computable General Equilibrium (CGE) model for Scotland. This analysis generalises the conventional Keynesian model so that negative balanced-budget multipliers values are possible, reflecting a regional “inverted Haavelmo effect”. Key parameters determining the aggregate economic impact are the extent to which the Scottish Government create local amenities valuable to the Scottish population and the extent to which this is incorporated into local wage bargaining.