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.

Acepromazine pharmacokinetics: A forensic perspective

Acepromazine (ACP) is a useful therapeutic drug, but is a prohibited substance in competition horses. The illicit use of ACP is difficult to detect due to its rapid metabolism, so this study investigated the ACP metabolite 2-(1-hydroxyethyl)promazine sulphoxide (HEPS) as a potential forensic marker. Acepromazine maleate, equivalent to 30 mg of ACP, was given IV to 12 racing-bred geldings. Blood and urine were collected for 7 days post-administration and analysed for ACP and HEPS by liquid chromatography–mass spectrometry (LC–MS). Acepromazine was quantifiable in plasma for up to 3 h with little reaching the urine unmodified. Similar to previous studies, there was wide variation in the distribution and metabolism of ACP. The metabolite HEPS was quantifiable for up to 24 h in plasma and 144 h in urine. The metabolism of ACP to HEPS was fast and erratic, so the early phase of the HEPS emergence could not be modelled directly, but was assumed to be similar to the rate of disappearance of ACP. However, the relationship between peak plasma HEPS and the y-intercept of the kinetic model was strong (P = 0.001, r2 = 0.72), allowing accurate determination of the formation pharmacokinetics of HEPS. Due to its rapid metabolism, testing of forensic samples for the parent drug is redundant with IV administration. The relatively long half-life of HEPS and its stable behaviour beyond the initial phase make it a valuable indicator of ACP use, and by determining the urine-to-plasma concentration ratios for HEPS, the approximate dose of ACP administration may be estimated.

Impaired driving countermeasures : an Australian perspective

The prevalence of impaired driving in Australia  Regulatory approaches used to manage: – Alcohol impaired driving – Other drug impaired driving  Key countermeasures – Lower blood alcohol limits – Random breath testing (RBT) – Random drug testing (RDT)  Ongoing challenges and future directions

Patient expectations, outcomes and satisfaction : related, relevant or redundant?

Abstract Study design: A prospective investigation of patients undergoing lumbar spine surgery. Objective: Is there a correlation between patient’s expectations before lumbar surgery, postoperative outcomes and satisfaction levels? Methods: A prospective study of 145 patients undergoing primary, single-level surgery for degenerative lumbar conditions was conducted. Oswestry Disability Index (ODI), back visual analogue scale (VAS) and leg VAS were assessed pre-operatively and at 6 weeks and 6 months post-surgery. Patients’ expectations were measured pre-operatively by asking them to score the level of pain and disability that would be least acceptable for them to undergo surgery and be satisfied. Satisfaction was assessed six weeks post-operatively with a Likert scale. Differences in patient expectations between actual and expected improvements were quantified. Results: Most patients had a clinically relevant improvement, but only about half achieved their expectation. Satisfaction did not correlate with pre-operative pain or disability, or with patient expectation of improvement. Instead, satisfaction correlated with positive outcomes. Conclusions Patient expectations have little bearing on final outcome and satisfaction.

Negotiating : experiences of community nurses when contracting with clients

A community nurse is required to have excellent interpersonal, teaching, collaborative and clinical skills in order to develop effective individualised client care contracts. Using a descriptive qualitative design data was collected from two focus groups of fourteen community nurses to explore the issues surrounding negotiating and contracting client care contracts from the perspective of community nurses. Thematic analysis revealed three themes: ‘assessment of needs’, ‘education towards enablement’, and ‘negotiation’. ‘Assessment of needs’ identified that community nurses assess both the client’s requirements for health care as well as the ability of the nurse to provide that care. ‘Education towards enablement’ described that education of the client is a common strategy used by community nurses to establish realistic goals of health care as part of developing an ongoing care plan. The final theme, ‘negotiation’, involved an informed agreement between the client and the community nurse which forms the origin of the care contract that will direct the partnership between the client and the nurse. Of importance for community nurses is that development of successful person-centred care contracts requires skillful negotiation of care that strikes the balance between the needs of the client and the ability of the nurse to meet those needs.

Direct fabrication as a patient-targeted therapeutic in a clinical environment

A paradigm shift is taking place in orthopaedic and reconstructive surgery. This transition from using medical devices and tissue grafts towards the utilization of a tissue engineering approach combines biodegradable scaffolds with cells and/or biological molecules in order to repair and/or regenerate tissues. One of the potential benefits offered by solid freeform fabrication (SFF) technologies is the ability to create such biodegradable scaffolds with highly reproducible architecture and compositional variation across the entire scaffold due to their tightly controlled computer-driven fabrication. Many of these biologically activated materials can induce bone formation at ectopic and orthotopic sites, but they have not yet gained widespread use due to several continuing limitations, including poor mechanical properties, difficulties in intraoperative handling, lack of porosity suitable for cellular and vascular infiltration, and suboptimal degradation characteristics. In this chapter, we define scaffold properties and attempt to provide some broad criteria and constraints for scaffold design and fabrication in combination with growth factors for bone engineering applications. Lastly, we comment on the current and future developments in the field, such as the functionalization of novel composite scaffolds with combinations of growth factors designed to promote cell attachment, cell survival, vascular ingrowth, and osteoinduction.

An Indigenous perspective on the standardisation of restorative justice in New Zealand and Canada

The dramatic increase in restorative justice activity in western jurisdictions since the early 1990s has driven state officials, supported by some theorists and practitioners, to standardise the design and delivery of restorative justice programmes. The purpose of this paper is to provide a critical indigenous examination of various rationale proffered in support of the standardisation process that is occurring in the neo-colonial jurisdictions of Canada and New Zealand. The paper ends with a call for Maori justice practitioners to develop their own standard for enhancing the delivery of restorative justice initiatives to Maori offenders, victims, families and communities.