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.

Full compensation no longer sacrosanct : reflections on the past and future economic loss ‘cap’ for high income earners

The civil liability provisions relating to the assessment of damages for past and future economic loss have abrogated the common law principle of full compensation by imposing restrictions on the damages award, most commonly by a “three times average weekly earnings” cap. This consideration of the impact of those provisions is informed by a case study of the Supreme Court of Victoria Court of Appeal decision, Tuohey v Freemasons Hospital (Tuohey) , which addressed the construction and arithmetic operation of the Victorian cap for high income earners. While conclusions as to operation of the cap outside of Victoria can be drawn from Tuohey, a number of issues await judicial determination. These issues, which include the impact of the damages caps on the calculation of damages for economic loss in the circumstances of fluctuating income; vicissitudes; contributory negligence; claims per quod servitum amisit; and claims by dependants, are identified and potential resolutions discussed.

Participatory content creation and collective intelligence in Rio de Janeiro's favelas [Virtual presentation]

This proposal combines ethnographic techniques and discourse studies to investigating a collective of people engaged with audiovisual productions who collaborate in Curta Favela’s workshops in Rio de Janeiro’s favelas. ‘Favela’ is often translated simply as ‘slum’ or ‘shantytown’, but these terms connote negative characteristics such as shortage, poverty, and deprivation referring to favelas which end up stigmatizing these low income suburbs. Curta Favela (Favela Shorts) is an independent project which all participants join to use photography and participatory audiovisual production as a tool for social change and raising consciousness. As cameras are not affordable for favelas dwellers, Curta Favela’s volunteers teach favela residents how they can use their mobile phones and compact cameras to take pictures and make movies, and afterwards, how they can edit the data using free editing video software programs and publish it on the Internet. To record audio, they use their mp3 or mobile phones. The main aim of this study is to shed light not only on how this project operates, but also to highlight how collective intelligence can be used as a way of fighting against the lack of basic resources.

Participatory content creation and collective intelligence in Rio de Janeiro's favelas

This proposal combines ethnographic techniques and discourse studies to investigate a collective of people engaged with audiovisual productions who collaborate in Curta Favela’s workshops in Rio de Janeiro’s favelas. ‘Favela’ is often translated simply as ‘slum’ or ‘shantytown’, but these terms connote negative characteristics such as shortage, poverty, and deprivation which end up stigmatizing these low income suburbs. Curta Favela (Favela Shorts) is an independent project in which all participants join to use photography and participatory audiovisual production as tools for social change and to raise consciousness. As cameras are not affordable for favela dwellers, Curta Favela’s volunteers teach favela residents how they can use their mobile phones and compact cameras to take pictures and make movies, and afterwards, how they can edit the data using free editing video software programs and publish it on the Internet. To record audio, they use their mp3 or mobile phones. The main aim of this study is to shed light not only on how this project operates, but also to highlight how collective intelligence can be used as a way of fighting against a lack of basic resources.

A Reliability test system for educational purposes-basic data

The IEEE Subcommittee on the Application of Probability Methods (APM) published the IEEE Reliability Test System (RTS) [1] in 1979. This system provides a consistent and generally acceptable set of data that can be used both in generation capacity and in composite system reliability evaluation [2,3]. The test system provides a basis for the comparison of results obtained by different people using different methods. Prior to its publication, there was no general agreement on either the system or the data that should be used to demonstrate or test various techniques developed to conduct reliability studies. Development of reliability assessment techniques and programs are very dependent on the intent behind the development as the experience of one power utility with their system may be quite different from that of another utility. The development and the utilization of a reliability program are, therefore, greatly influenced by the experience of a utlity and the intent of the system manager, planner and designer conducting the reliability studies. The IEEE-RTS has proved to be extremely valuable in highlighting and comparing the capabilities (or incapabilities) of programs used in reliability studies, the differences in the perception of various power utilities and the differences in the solution techniques. The IEEE-RTS contains a reasonably large power network which can be difficult to use for initial studies in an educational environment.

A Reliability test system for educational purposes-basic data

The IEEE Reliability Test System (RTS) developed by the Application of Probability Method Subcommittee has been used to compare and test a wide range of generating capacity and composite system evaluation techniques and subsequent digital computer programs. A basic reliability test system is presented which has evolved from the reliability education and research programs conducted by the Power System Research Group at the University of Saskatchewan. The basic system data necessary for adequacy evaluation at the generation and composite generation and transmission system levels are presented together with the fundamental data required to conduct reliability-cost/reliability-worth evaluation

A Reliability test system for educational purposes-basic results

A set of basic reliability indices at the generation and composite generation and transmission levels for a small reliability test system are presented. The test system and the results presented have evolved from reliability research and teaching programs. The indices presented are for fundamental reliability applications which should be covered in a power system reliability teaching program. The RBTS test system and the basic indices provide a valuable reference for faculty and students engaged in reliability teaching and research

Income Tax : Text, Materials and Essential Cases [8th ed.]

Tax law and policy is a vital part of Australian society. Australian society insists that the Federal Government provide extensive public programs, such as health services, education, social security, foreign aid, legal infra¬structure, regulation, police services, national defence and funding for sports development. These programs are costly to provide and are funded by taxation. The aim of this book is to introduce and explain the principles of tax law and tax policy in plain English. The book contains detailed commentary on tax principles together with extracts from cases and materials that illustrate the application of the principles. The book considers tax policy and the economic and social aspects of tax law. While tax students must develop technical competence in tax law, given the speed with which changes are made to the technical details of tax law, it is also important to grasp tax principles and policy to understand why tax law has changed or why it should change. The chapters are structured to direct readers to the key provisions of the tax law. Each case is introduced by an explanation of the facts, followed by the taxpayer’s arguments, the Commissioner’s assertions and the decision of the Administrative Appeals Tribunal or a court. The commentary guides readers through the issues considered in the judgments. The book contains extracts from: articles; materials dealing with tax policy; and the Commissioner’s rulings. The book also has references for further reading and medium-neutral citations (Internet citations) for cases decided since 1998.

Basic cognitive experiences and definitions in the Longman Dictionary of Contemporary English

This study applies theories of cognitive linguistics to the compilation of English learners’ dictionaries. Specifically, it employs the concepts of basic level categories and image schemas, two basic cognitive experiences, to examine the ‘definition proper’ of English dictionaries for foreign learners. In the study, the definition proper refers to the constituent part of a reference work that provides an explanation of the meanings of a word, phrase or term. This rationalization mainly consists of defining vocabulary, sense division and arrangement, as well as the means of defining (i.e. paraphrase, true definition, functional definition, and pictorial illustration). The aim of the study is to suggest ways of aligning the consultation and learning of definitions with dictionary users’ cognitive experiences. For this purpose, an analysis of the definition proper of the fourth edition of the Longman Dictionary of Contemporary English (LDOCE4) from the perspective of basic cognitive experiences has been undertaken. The study found that, generally, the lexicographic practices of LDOCE4 are consistent with theories of cognitive linguistics. However, there exist shortcomings that result from disregarding basic cognitive experiences.

A Raman spectroscopic study of the basic carbonate mineral callaghanite Cu2Mg2(CO3)(OH)6⋅2H2O

Raman spectrum of callaghanite, Cu2Mg2(CO3)(OH)6⋅2H2O, was studied and compared with published Raman spectra of azurite, malachite and hydromagnesite. Stretching and bending vibrations of carbonate and hydroxyl units and water molecules were tentatively assigned. Approximate O–H…O hydrogen bond lengths were inferred from the spectra. Because of the high content of hydroxyl ions in the crystal structure in comparison with low content of carbonate units, callaghanite should be better classified as a carbonatohydroxide than a hydroxycarbonate.

Basic graphics : an introduction to rudimentary graphic design

These notes were compiled from several authorities to be used for teaching and learning purposes here at QUT, with the focus on first and second year landscape architecture design studio units.

Submission to National Inquiry into Children in Immigration Detention from The Australian Psychological Society

Executive Summary The Australian Psychological Society categorically condemns the practice of detaining child asylum seekers and their families, on the grounds that it is not commensurate with psychological best practice concerning children’s development and mental health and wellbeing. Detention of children in this fashion is also arguably a violation of the UN Convention on the Rights of the Child. A thorough review of relevant psychological theory and available research findings from international research has led the Australian Psychological Society to conclude that: • Detention is a negative socialisation experience. • Detention is accentuates developmental risks. • Detention threatens the bonds between children and significant caregivers. • Detention limits educational opportunities. • Detention has traumatic impacts on children of asylum seekers. • Detention reduces children’s potential to recover from trauma. • Detention exacerbates the impacts of other traumas. • Detention of children from these families in many respects is worse for them than being imprisoned. In the absence of any indication from the Australian Government that it intends in the near future to alter the practice of holding children in immigration detention, the Australian Psychological Society’s intermediate position is that the facilitation of short-term and long-term psychological development and wellbeing of children is the basic tenet upon which detention centres should be audited and judged. Based on that position, the Society has identified a series of questions and concerns that arise directly from the various psychological perspectives that have been brought to bear on estimating the effects of detention on child asylum seekers. The Society argues that, because these questions and concerns relate specifically to improvement and maintenance of child detainees’ educational, social and psychological wellbeing, they are legitimate matters for the Inquiry to consider and investigate. • What steps are currently being taken to monitor the psyc hological welfare of the children in detention? In particular, what steps are being taken to monitor the psychological wellbeing of children arriving from war-torn countries? • What qualifications and training do staff who care for children and their families in detention centres have? What knowledge do they have of psychological issues faced by people who have been subjected to traumatic experiences and are suffering high degrees of anxiety, stress and uncertainty? • What provisions have been made for psycho-educational assessment of children’s specific learning needs prior to their attending formal educational programmes? • who are suffering chronic and/or vicarious trauma as a result of witnessing threatening behaviour whilst in detention? • What provisions have been made for families who have been seriously affected by displacement to participate in family therapy? • What critical incident debriefing procedures are in place for children who have witnessed their parents, other family members, or social acquaintances engaging in acts of self-harm or being harmed while in detention? What psychotherapeutic support is in place for children who themselves have been harmed or have engaged in self- harmful acts while in detention? • What provisions are in place for parenting programmes that provide support for parents of children under extremely difficult psychological and physical circumstances? • What efforts are being made to provide parents with the opportunity to model traditional family roles for children, such as working to earn an income, meal preparation, other household duties, etc.? • What opportunities are in place for the assessment of safety issues such as bullying, and sexual or physical abuse of children or their mothers in detention centres? • How are resources distributed to children and families in detention centres? • What socialization opportunities are available either within detention centres or in the wider community for children to develop skills and independence, engage in social activities, participate in cultural traditions, and communicate and interaction with same-age peers and adults from similar ethnic and religious backgrounds? • What access do children and families have to videos, music and entertainment from their cultures of origin? • What provisions are in place to ensure the maintenance of privacy in a manner commensurate with usual cultural practice? • What is the Government’s rationale for continuing to implement a policy of mandatory detention of child asylum seekers that on the face of it is likely to have a pernicious impact on these children’s mental health? • In view of the evidence on the potential long-term impact of mandatory detention on children, what processes may be followed by Government to avoid such a practice and, more importantly, to develop policies and practices that will have a positive impact on these children’s psychological development and mental health?

Four new avian mitochondrial genomes help get to basic evolutionary questions in the late cretaceous

Good phylogenetic trees are required to test hypotheses about evolutionary processes. We report four new avian mitochondrial genomes, which together with an improved method of phylogenetic analysis for vertebrate mt genomes give results for three questions in avian evolution. The new mt genomes are: magpie goose (Anseranas semipalmata), an owl (morepork, Ninox novaeseelandiae); a basal passerine (rifleman, or New Zealand wren, Acanthisitta chloris); and a parrot (kakapo or owl-parrot, Strigops habroptilus). The magpie goose provides an important new calibration point for avian evolution because the well-studied Presbyornis fossils are on the lineage to ducks and geese, after the separation of the magpie goose. We find, as with other animal mitochondrial genomes, that RY-coding is helpful in adjusting for biases between pyrimidines and between purines. When RY-coding is used at third positions of the codon, the root occurs between paleognath and neognath birds (as expected from morphological and nuclear data). In addition, passerines form a relatively old group in Neoaves, and many modern avian lineages diverged during the Cretaceous. Although many aspects of the avian tree are stable, additional taxon sampling is required.

Double tax agreements and the international allocation of business income in Australia

Increasingly, the effectiveness of the present system of taxation of international businesses is being questioned. The problem associated with the taxation of such businesses is twofold. A system of international taxation must be a fair and equitable system, distributing profits between the relevant jurisdictions and, in doing so, avoiding double taxation. At the same time, the prevention of fiscal evasion must be secured. In an attempt to achieve a fair and equitable system Australia adopts unilateral, bilateral and multilateral measures to avoid double taxation and restrict the avoidance of tax. The first step in ascertaining the international allocation of business income is to consider the taxation of business income according to domestic law, that is, the unilateral measures. The treatment of international business income under the Australian domestic law, that is, the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth), will depend on two concepts, first, whether the taxpayer is a resident of Australia and secondly, whether the income is sourced in Australia. After the taxation of business profits has been determined according to domestic law it is necessary to consider the applicability of the bilateral measures, that is, the Double Tax Agreements (DTAs) to which Australia is a party, as the DTAs will override the domestic law where there is any conflict. Australia is a party to 40 DTAs with another seven presently being negotiated. The preamble to Australia's DTAs provides that the purpose of such agreements is 'to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income'. Both purposes, for different reasons, are equally important. It has been said that: The taxpayer hopes the treaty will prevent the double taxation of his income; the tax gatherer hopes the treaty will prevent fiscal evasion; and the politician just hopes. The first purpose, the avoidance of double taxation, is achieved through the provision of rules whereby the Contracting States agree to the classification of income and the allocation of that income to a particular State. In this sense DTAs do not allocate jurisdiction to tax but rather provide an arrangement whereby the States agree to restrict their substantive law. The restriction is either through the non-taxing of the income or via the provision of a tax credit.