Taxes as Pandemic Controls

Abstract

Tax policy can play important roles in limiting the spread of communicable disease and in managing the economic fallout of a pandemic. Taxes on business activities that bring workers or customers into close contact with each other offer efficient alternatives to broad regulatory measures, such as shutdowns, that have been effective but enormously costly. Corrective taxation also helps raise the revenue required to cover elevated government expenditure during a pandemic. Moreover, the restricted consumer choice that accompanies a pandemic reduces the welfare cost of raising tax revenue from higher-income taxpayers, making it a good time for deficit closure. Current U.S. tax measures serve some of these functions, but additional measures could further limit the spread of disease while also addressing government budget deficits.

International taxation sentiment and COVID-19 crisis

“… Clemens and Veuger (2020) note that the pandemic caused a significant decline in tax revenue, which affects governments’ public spending. Craig and Hines (2020) confirm that tax policy could be effective in limiting the spread of communicable diseases and in managing the economic fallout of a pandemic. It can further be noted that some corporations, such as large technology companies, have profited dramatically from the pandemic as the majority has suffered.…”

“…The opportunity costs of the governments’ needed massive spending in response to the pandemic are significant forgone future benefits ( Karnon, 2020 ). Moreover, governments must balance budget deficits as well as possible; thus, raising taxes during the pandemic may be a logical policy option ( Craig and Hines, 2020 ) for two reasons. First, the disutility of taxation during COVID-19 is reduced compared to the disutility of taxation in normal times due to the public health-related constraints on individuals’ consumption ability and economic activity during the pandemic.…”

“…Substantial research exists on taxation policies across countries. In this regard, scholars engage in the heated debate over tax policy ( Coffey et al, 2020 , Clemens and Veuger, 2020 , Karnon, 2020 , Craig and Hines, 2020 ). Existing studies have certain deficiencies that are primarily based on survey data, minimal coverage and a lack of cross-country comparative analyses.…”

The Effect of Taxes and Capital Expenditures on Economic Growth The Effects of the COVID-19 Pandemic in Indonesia

“…Export and import performance declined along with the inhibition of trade activities between countries. Therefore, the pandemic COVID-19 impact is tremendous for the economy, can use policies taxes to create flexible incentives for individuals and businesses so that, when applied can be used to control environmental externalities and others (Craig & Hines, 2020). Therefore, taxes as a fiscal instrument can provide a role that supports the domestic economy.…”

Tax Policy Measures to Combat the SARS-CoV-2 Pandemic and Considerations to Improve Tax Compliance: A Behavioral Perspective

“…Building on the derived insights, we close with a set of considerations to strengthen trust in authorities and their perceived power that may help contain aggressive tax avoidance and evasion when the pandemic is under control. Such considerations are one way of discussing thoughtful tax policies crucial to addressing the problems and challenges nations now face due to the Covid-19 pandemic (Craig & Hines Jr, 2020).…”