Tax reform and the political economy of the tax base

Ilzetzki, Ethan

doi:10.1016/j.jpubeco.2018.06.005

Cited by 23 publications

(18 citation statements)

References 33 publications

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“…My simulations also show that, at least over some range, widening the scope for reform (i.e. raising the number of goods that are deregulated) is likely to raise its total support, thus con…rming the importance of reform scope and complementarities, which was pointed out in other contexts by Blanchard and Giavazzi (2003), Caselli and Gennaioli (2008) or Ilzetski (2018) 7 : losers from reform in one area are partially compensated (as consumers) by their gains from reform in another area.…”

supporting

confidence: 65%

Pareto-improving structural reforms

Saint‐Paul

2021

Journal of Economic Theory

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Economists recommend to partly redistribute gains to losers from a structural reform, which in many cases may be required for making the reform politically viable. However, taxation is distortionary. Then, it is unclear that compensatory transfers can support a Pareto-improving reform. This paper provides su¢ cient conditions for this to occur, despite tax distortions. I consider an economy where workers have sector-speci…c skills and some sectors are regulated by a price ‡oor. Transfers have to be …nanced by proportional taxation on …rm's revenues or, equivalently, labor income. Labor supply is elastic to net post-tax real wages, and hence reduced by taxation. In a setting where preferences are isoelastic, deregulation is implementable in a Paretoimproving way through compensatory lump-sum transfers, despite that these are …nanced by distortionary taxes. In a more general setting, there always exist Pareto-improving reforms but they may involved tightening regulation for some goods. I provide su¢ cient conditions for deregulation, i.e. a general reduction in price ‡oors, to be Pareto-improving. They imply that demand cross-price elasticities should not be too large and that the reform should not be too unbalanced. Finally, I consider counter-examples where some people earn rents associated with informational or institutional frictions. In such situations, Pareto improvements are unlikely. If losers have veto power, the reform may only be supported by a minority of people. Broadening reform scope is especially useful to raise its political support when its impact is uneven across consumers.

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supporting

confidence: 65%

Pareto-improving structural reforms

Saint‐Paul

2021

Journal of Economic Theory

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“…Pernyataan ini dilatarbelakangi oleh suatu pemahaman bahwa hubungan pemerintah dan pemba yar pajak adalah hubungan pertukaran (exchange relationship). Dari perspektif psikolo gi sosial dikatakan bahwa kepuasan individu dalam konsep hubungan pertukaran terjadi apabila masingmasing pihak menerima ha sil pertukaran yang setara (Ilzetzki, 2018).…”

Section: Hasil Dan Pembahasanunclassified

Quo Vadis Kepatuhan Pajak?

Mangoting

2018

jamal

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Quo Vadis Kepatuhan Pajak? Penelitian ini bertujuan untuk mengidentifikasi, menilai, dan memberikan interpretasi hasil penelitian kualitatif tentang kepatuhan pajak. Metode yang dijadikan alat analisis adalah meta sintesis terhadap sejumlah temuan dalam penelitian kua litatif mengenai kepatuhan pajak. Hasil penelitian ini menjelaskan per lunya menciptakan model ketaatan pajak yang berkomitmen. Komitmen menjadi landasan wajib pajak dan otoritas pajak mengemban bagian peran dan kewajiban masingmasing secara proporsional. Kepatuhan pajak dengan komitmen akan mendukung pengumpulan pajak berbasis self assessment, yang meletakkan kewenangan penuh kepada wajib pa jak untuk menjalankan ketentuan perpajakan sendiri secara sukarela.

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“…Although always opposed by the public, reforming tax policy is one of the bold moves that need to be made by governments. Buettner and Madzharova (2018), and Ilzetzki (2018) supported the claim by proving that tax reform usually results in positive effects for the governments.…”

Section: Literature Reviewmentioning

confidence: 71%

Tax Reform: Is it Welfare-Enhancing or Welfare-Reducing?

Taha

Ahmad

Endut

et al. 2021

IJBS

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The ongoing tax reform in Malaysia has triggered our motivation to understand the effect of such reform on the public since the government has continuously emphasised that the changes would not burden the consumer. Whether this is a myth or reality is deemed interesting to ponder upon. Thus, this study aims to provide evidence concerning Malaysian tax reform on consumer welfare by looking at the price effect, consumer burden, and inflation. Price observations of the pre-, during and post-reformation period were conducted to provide meaningful evidence. Interestingly, the outcome of the observation rules out the public accusation that the tax reform would boost the price of goods and services and further result in a welfarereducing event. Also, a review of the recent statistics on poverty incidence does not show a negative effect of tax policy changes on society’s welfare. It is hoped that the discussion provided in this paper will shed light on the impact of tax reformation in Malaysia, albeit a further thorough examination might be required.

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Tax reform and the political economy of the tax base

Cited by 23 publications

References 33 publications

Pareto-improving structural reforms

Pareto-improving structural reforms

Quo Vadis Kepatuhan Pajak?

Tax Reform: Is it Welfare-Enhancing or Welfare-Reducing?

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