This paper analyzes the sources of heterogeneity in tax-minimizing strategies across individuals. We summarize insights obtained from the literature into three conditions affecting participation in tax minimization: namely, incentive, access, and awareness. Using a rich Swedish administrative panel data set on corporations, individuals, and active owners of closely held corporations, we analyze...

The tax system has a pervasive impact on poverty, both directly through its role in the distribution of society’s resources and indirectly through its effects on the incentives for economic decisions like working and saving. The two most important facets of the tax system for low-income families are payroll taxes and the Earned Income Tax Credit (EITC), the former of which levies a tax on earne...

Over the last twenty years we have seen an increasing use of in-work tax subsidies to encourage labor supply among low-income groups. In Sweden, a non-targeted earned income tax credit was introduced in 2007, and was reinforced in 2008, 2009 and 2010. The stated motive of the reform was to boost employment; in particular to provide incentives for individuals to go from unemployment to, at least...

This paper introduces “capital ownership neutrality” (CON) and “national ownership neutrality” (NON) as benchmarks for evaluating the desirability of international tax reforms, and applies them to analyze recent U.S. tax reform proposals. Tax systems satisfy CON if they do not distort the ownership of capital assets, which promotes global efficiency whenever the productivity of an investment di...

During the past 30 year of economic growth, China has also accumulated a huge environmental pollution debt. China’s government attempts to use a variety of means, including tax instruments to control environmental pollution. After nine years of repeated debates, the State Council Legislative Affairs Office released the Environmental Protection Tax Law (Draft) in June 2015. As China’s first envi...

This paper investigates the responsiveness of household portfolios to tax incentives by exploiting a substantial tax reform that altered after-tax returns and cost of debt for a large number of households. An extraordinary panel data set that covers two years before and after the reform is used for the analysis. Our empirical findings suggest that households reshuffle their balance sheets in th...

The Consequences of ‘In-Work’ Benefit Reform in Britain: New Evidence from Panel Data In October 1999, the British government enacted the Working Families’ Tax Credit, a generous tax credit aimed at encouraging work among low-income families with children. This paper uses longitudinal data collected between 1991 and 2001 to evaluate the effect of this reform on single mothers. We identify this ...

Although the U.S. health care system has made remarkable advancements, it is costly and wasteful, and it leaves many people without appropriate care. The challenge for public policy is to enable consumers and taxpayers to obtain good value for their health care dollars. Achieving this objective stands the greatest chance of success if health care markets function well. To make markets work, we ...

This paper tests whether state school finance reform alters neighborhood income homogeneity. One implication of the Tiebout model is that within-community homogeneity declines as a result of an exogenous decrease in the ability of jurisdictions to set local tax and expenditure levels. The property tax revolt and the school finance equalization reform of the 1970s and 1980s offer a test of the r...

In this paper we provide an overview and analysis of problems with, and reform efforts aimed at the different layers of the tax system in India. Overlapping in the commodity tax systems of the three levels of government in India has made the tax system non-transparent, and rendered the pursuit of the objectives of tax policy difficult. The incidence of taxes on commodities remains unknown and m...