Tax Systems

Slemrod, Joel; Gillitzer, Christian

doi:10.7551/mitpress/9780262026727.001.0001

Cited by 72 publications

(28 citation statements)

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“…Although previous research shows that tax avoidance is a significant behavioral margin for these groups (see e.g. Slemrod and Gillitzer 2014), it is still unclear how much of the overall response is due to changes in real economic activity, and how much is due to avoidance.…”

Section: Introductionmentioning

confidence: 99%

The Elasticity of Taxable Income and Income-Shifting: What is 'Real' and What is Not?

Harju

Matikka

2014

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Previous literature shows that income taxation significantly affects the behavior of highincome earners and business owners. However, it is still unclear how much of the response is due to changes in effort and other real economic activity, and how much is caused by tax avoidance and tax evasion. This distinction is important because it affects the welfare implications and policy recommendations. In this paper we distinguish between real responses and tax-motivated income-shifting between tax bases. We show how the explicit inclusion of income-shifting affects the welfare analysis of income taxation. In our empirical example we find that income-shifting accounts for over two thirds of the overall elasticity of taxable dividend income among Finnish business owners. The large income-shifting response significantly decreases the marginal excess burden compared to the standard model in which the overall elasticity defines the welfare loss. However, in addition to income-shifting, we find that dividend taxation significantly affects the real behavior of owners. Terms of use: Documents inJEL-Code: H240, H250, H320.

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Section: Introductionmentioning

confidence: 99%

The Elasticity of Taxable Income and Income-Shifting: What is 'Real' and What is Not?

Harju

Matikka

2014

SSRN Journal

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“…Following the seminal work of Diamond and Mirrlees (1971) the traditional theoretical literature on taxation mainly focuses on the optimal design of tax schedules without paying much attention to various issues related to the tax system as a whole, including tax administration and tax compliance, among others (Slemrod and Gillitzer 2013). While more recent applied research has made important advancements also in the fields of tax administration and tax compliance, particularly owing to the availability of administrative micro datasets and field experiments, the evidence from developing countries remains fairly limited (for surveys see, e.g., Yitzhaki.…”

Section: Introductionmentioning

confidence: 99%

Responses of Firms to Tax, Administrative and Accounting Rules: Evidence from Armenia

Asatryan

Peichl

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. http://ftp.zew.de/pub/zew-docs/dp/dp16065.pdf Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar. Terms of use: Documents inDis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. we study the behavioral response of firms to three size-dependent regulations. We find: i) a strong response to an accounting notch where International Financial Reporting Standards become mandatory; ii) a moderate response to an administrative notch below which the frequency of filing and paying taxes declines from monthly to quarterly; and iii) no response to a tax notch created by the registration threshold of the value added tax. Exploiting tax audits, we provide evidence suggesting that income under-reporting drives the bunching response of firms by between 60 and 100 percent. Additional evidence suggests that firms respond to tax audits by compensating every additional dollar of audit driven increase in reported income by a 0.7-0.8 dollar increase in reported deductions. Responses of Firms to

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“…As cum-ex trading was in the legal limbo, the paper further provides evidence of market efficiency in the presence of costly arbitrage. 3 The results in this article also provide evidence on broader issues, such as the importance of the design of tax systems (e.g., Slemrod and Gillitzer, 2014). In particular, it illustrates the potential vulnerability of withholding tax systems to tax fraud.…”

Section: Introductionmentioning

confidence: 80%

Stock Market Behavior on Ex-Dividend Dates: The Case of Cum-Ex Transactions in Germany

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper explores the effect of cum-ex trading on the stock market on ex-dividend dates. A loophole in the German withholding tax system until 2011 enabled cum-ex traders to achieve the issuance of withholding-tax certificates without previous withholding-tax payment. As the tax certificates could be used by a specific group of investors to obtain a tax deduction, this opened up the possibility of a specific form of tax arbitrage. The paper discusses the implications for the capital market equilibrium and derives empirical predictions for stock market behavior. The empirical analysis provides evidence using data on daily stock prices and volumes for German stocks listed in the HDAX index for the years 2009 to 2015. The identification strategy exploits variation in the withholding-tax liability of dividends. The results support a significant impact of cum-ex trading on price-drop ratios on ex-dividend dates indicating that the withholding tax loophole had a major capital market impact. Further, in line with reported cum-ex trading strategies, we find a statistically and economically significant increase in trading volumes by 55% and almost 100% on the two days prior to the ex-dividend date. In terms of policy implications, the results emphasize the importance of designing a consistent and effective withholding tax system.

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Tax Systems

Cited by 72 publications

References 0 publications

The Elasticity of Taxable Income and Income-Shifting: What is 'Real' and What is Not?

The Elasticity of Taxable Income and Income-Shifting: What is 'Real' and What is Not?

Responses of Firms to Tax, Administrative and Accounting Rules: Evidence from Armenia

Stock Market Behavior on Ex-Dividend Dates: The Case of Cum-Ex Transactions in Germany

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