The recent interest in the valuation of tax benefits from debt arises from the disagreement in the existing literature about the meaning of “value of tax shields.” Although it is accepted that the value of a firm increases as effect of the tax deductibility of interest, the correct valuation of this extra-value is controversial. In this paper we adopt a risk-neutral approach to derive a general...

126 words) Following the seminal work of late nineteenth century economist Etienne Laspeyres we analyse the incidence of the Prussian milling and slaughter tax shortly before its repeal in 1875. A comparison of flour prices in cities which levied this tax with cities that did not reveals unusually strong tax overshifting. Modern theories explain overshifting of a specific tax with quality impro...

This paper models a capital-exporting country that encounters difficulties in taxing foreignsource income, due to tax evasion problems. The paper compares the country’s optimal effective tax rates on the income from capital invested at home and abroad (including penalties levied on detected tax evaders). It finds that tax evasion abroad does not provide a justification for a relatively low effe...

Should the assessment of government policies, such as the provision of public goods and the control of externalities, deviate from first-best principles to account for distributive effects and for the distortionary cost of labor income taxation? For example, is the optimal extent of public goods provision smaller than indicated by the Samuelson rule because finance is distortionary? Or should e...

This study argues that economic vulnerability causes citizens to participate in clientelism, a phenomenon with various pernicious consequences. To examine how reduced affects citizens’ participation we employ two exogenous shocks vulnerability. First, designed randomized control trial reduce household vulnerability: our development intervention constructed residential water cisterns drought-pro...

This article investigates the effect of the intensity of political competition on the tax choices by local governments. More precisely, we study whether local governments determine their tax rates more in a Leviathan way, exploiting a low political competition to vote high tax rates, or in a partisan way, fiscal choices by leftwing governments being significantly in contrast with those by right...

Article history: Received 29 June 2013 Received in revised form 18 November 2013 Accepted 19 November 2013 Available online 12 December 2013 Constructing a duopoly model with non-constant marginal costs and a strict Pareto criterion, this paper examines welfare effects of world-price-fixing tariff reductions accompanied by adjustments of a domestic tax. If a destination-based consumption tax is...

Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity In this paper we argue that, for a given overall level of labour income taxation, a more progressive tax schedule increases employment. From a theoretical point of view, higher progressivity increases overall employment through a wage moderating effect and also because employment of low-paid workers is mor...

Article history: Received 29 July 2014 Received in revised form 3 October 2015 Accepted 5 October 2015 Available online 22 October 2015 This paper examines the relationship between tax competition and fiscal equalization in a standard tax competition model with repeated actions, in which regions differ in per capita capital endowments and production technologies. In particular, it asks how a fi...

regarding the decentralization of credits management, this study examined the effect of fiscal policies on gross domestic product of the iranian provinces over the period 2001-2009. therefore, we used dynamic panel data and employed gmm-sys method to examine the model. the results show that the government expenditure and tax multiplier coefficients are less than one in short - run but greater t...