Income Tax "Loopholes" and Political Rhetoric

Income Tax Buyouts and Income Tax Evasion

A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected tax revenues. This will be the case if (1) the audit probability is constant and the penalty for eva...

The Spanish tobacco tax loopholes and their consequences.

OBJECTIVES The Spanish government has strengthened tobacco control policies since 2005, including changes in tobacco taxes. Because these changes have targeted cigarettes mainly, the tobacco industry has marketed cheaper alternative tobacco products, offering smokers the possibility to downtrade. This paper traces the evolution of patterns of demand for cigarettes and other tobacco products in ...

Tax competition when firms choose their organizational form: Should tax loopholes for multinationals be closed?

We analyze a sequential game between two symmetric countries when firms can invest in a multinational structure that confers tax savings. Governments are able to commit to long-run tax discrimination policies before firms’ decisions are made and before statutory capital tax rates are chosen non-cooperatively. Whether a coordinated reduction in the tax preferences granted to mobile firms is bene...

Dislocated Rhetoric: The Anomaly of Political Theory

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Negative Income Tax Plan