We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with heterogeneous firms. We show that it is optimal for the small country’s government to effectively subsidize capital inputs by granting a tax allowance in excess of the true costs of capital. Economic integration reduces the optimal capital subsidy and drives low-productivity firms from th...

Mike Brewer is Director of the Direct Tax and Welfare Research Programme at the IFS and a Research Affiliate of the National Poverty Center at the University of Michigan. His main research interests are in the impact of welfare reform and the personal tax and benefit system on families with children. He has evaluated the labour market impact of the working families’ tax credit, and the impact o...

We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with heterogeneous firms. We show that it is optimal for the small country’s government to effectively subsidize capital inputs by granting a tax allowance in excess of the true costs of capital. Economic integration reduces the optimal capital subsidy and drives low-productivity firms from th...

Based on the Chinese statistics from 1976 to 2004, this paper conducts an empirical study on the relationship between reduction in agricultural tax and income growth of rural residents by using econometric methodologies of cointegration theory and error correction mechanism. The result reveals that the policy of reducing agricultural tax has a positive effect on the whole level of peasant’s inc...

This paper examines the implications, for overall social welfare and inequality comparisons, of using different definitions of the unit of analysis the income recipient in computing summary measures. Comparisons are made using the Melbourne Institute Tax and Transfer Simulator (MITTS), a simulation model of the Australian direct tax and benefit system, of the effects of flattening the marginal ...

the corporate income tax rate plays a worthwhile role in developing fiscal and tax policies for companies, lawmakers and analysts. so, one of the most important issues in tax field, is to determine effective tax rates. the study and scientific calculations of the effective tax rates provide an enhanced tax justice and a careful study of tax pressure on taxpayers would be possible. the objective...

This paper presents an experimental investigation of the individual willingness to pay (WTP) for green electricity. The experimental design comprises a public-choice scenario and a individual-choice scenario. It involves three different payment vehicles for the public promotion of renewables: direct tax, indirect tax, and CO2 tax. We test for the extent of freeriding, the impact of different pa...

The multinationalization of corporate investment in recent years has given rise to a number of international tax avoidance schemes that may be eroding tax revenues in industrialized countries, but which may also reduce tax burdens on mobile capital and so facilitate investment. Both the welfare effects of and the optimal response to international tax planning are therefore ambiguous. Evaluating...