Corporate tax effects on the quality and quantity of FDI

This paper measures the relative importance of quality and quantity effects of corporate taxation on foreign direct investment. Quantity is affected if corporate taxes reduce the equilibrium stock of foreign capital in a given country. Quality effects arise if taxes decrease the extent to which investment contributes to the corporate tax base and the capital intensity of production. Depending on the sign of the quality effects, the detrimental welfare effects of corporate taxation are either mitigated or aggravated. We derive a number of hypotheses how corporate tax changes may affect the quality of investment. Our hypotheses are then tested using data from a large sample of European multinationals. With regard to corporate tax effects on the corporate tax base, we find that quality effects account for up to fourty per cent of the total effect. With regard to corporate tax effects on labour income, our results suggest that quality effects mitigate the negative quantity effect by nearly sixty percent (as corporate taxes strongly increase the labor intensity of production). An important implication is that governments should not exclusively care about the size of inbound FDI flows but also about their specific characteristics, i.e. their quality

Do higher corporate taxes reduce wages? : Micro evidence from Germany

Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden

Institutions and the route to reform of the European Union’s budget revenue, 1970-2017

Using process tracing, this paper charts the history of the changes in the EU’s revenue since 1970, including package deals and the unforeseen consequences of change, comparing the positions of the Council to those of the European Commission and European Parliament. Those revenue decisions allowed European integration to proceed though without a fully autonomous budget as Member States became more careful to calculate their net benefits or costs in relation to the budget. In December 2013, the European Union’s institutions established a High Level Group to recommend changes to the revenue base of the EU’s budget. This reported in January 2017, proposing to resolve the effect of sub-optimal revenue and budget decisions made by the European Union over many years, to reduce direct national contributions, to minimise the risk of unforeseen consequences, and to combine revenue flows with steering effects to discourage certain forms of economic behaviour in line with the wider policy agenda of the European Union

Income redistribution in the European Union

We explore the redistributive effects of taxes and benefits in the 27 member states of the European Union (EU) using EUROMOD, the tax-benefit microsimulation model for the EU. As well as describing redistributive effects in aggregate, we assess and compare the effectiveness of eight individual types of policy in reducing income disparities. We derive results for the 27 members of the EU using policies in effect in 2010 and present them for each country separately as well as for the EU as a whole

Documentation FiFoSiM: Integrated Tax Benefit Microsimulation and CGE Model

ABSTRACT: This paper describes FiFoSiM, the integrated tax benefit microsimulation and computable general equilibrium (CGE) model of the Center of Public Economics at the University of Cologne. FiFoSiM consists of three main parts. The first part is a static tax benefit microsimulation module. The second part adds a behavioural component to the model: an econometrically estimated labour supply model. The third module is a CGE model which allows the user of FiFoSiM to assess the global economic effects of policy measures. Two specific features distinguish FiFoSiM from other tax benefit models: First, the simultaneous use of two databases for the tax benefit module and second, the linkage of the tax benefit model to a CGE model

Drivers of Health Care Expenditure: Does Baumol's Cost Disease Loom Large?

According to Baumol (1993) health care epitomises Baumol's cost disease. Sectors that suffer from Baumol's cost disease are characterised by slow productivity growth due to a high labour coefficient. As a result, unit costs of these sectors rise inexorably if the respective wages increase with productivity growth of the progressive industries such as manufacturing. Thus, according to Baumol (1993) the secular rise in health-care expenditure has been unavoidable. This present paper demonstrates that health care is contracted by Baumol's cost disease, but only to a minor extent. Consequently, policy-makers have more leeway to curbever-increasing health-care expenditure than is suggested by Baumol (1993) and other authors. In addition, we test the implications of Baumol's cost disease for health care by avoiding the well-known flaws in constructing medical price indices. Therefore, the adjusted Baumol variable derived in this paper is also extremely appropriate to test the validity of Baumol's cost diseases of other service industries such as education or the live performing arts. Additionally, our analysis suggests that health care is rather a necessity than a luxury at the national level, which conflicts with macroeconomic evidence provided in the relevant literature

Cumulative Prognostic Score Predicting Mortality in Patients Older Than 80 Years Admitted to the ICU.

OBJECTIVES: To develop a scoring system model that predicts mortality within 30 days of admission of patients older than 80 years admitted to intensive care units (ICUs). DESIGN: Prospective cohort study. SETTING: A total of 306 ICUs from 24 European countries. PARTICIPANTS: Older adults admitted to European ICUs (N = 3730; median age = 84 years [interquartile range = 81-87 y]; 51.8% male). MEASUREMENTS: Overall, 24 variables available during ICU admission were included as potential predictive variables. Multivariable logistic regression was used to identify independent predictors of 30-day mortality. Model sensitivity, specificity, and accuracy were evaluated with receiver operating characteristic curves. RESULTS: The 30-day-mortality was 1562 (41.9%). In multivariable analysis, these variables were selected as independent predictors of mortality: age, sex, ICU admission diagnosis, Clinical Frailty Scale, Sequential Organ Failure Score, invasive mechanical ventilation, and renal replacement therapy. The discrimination, accuracy, and calibration of the model were good: the area under the curve for a score of 10 or higher was .80, and the Brier score was .18. At a cut point of 10 or higher (75% of all patients), the model predicts 30-day mortality in 91.1% of all patients who die. CONCLUSION: A predictive model of cumulative events predicts 30-day mortality in patients older than 80 years admitted to ICUs. Future studies should include other potential predictor variables including functional status, presence of advance care plans, and assessment of each patient's decision-making capacity

18 Billion at One Blow: Evaluating Germany's Twenty Biggest Tax Expenditures

“Periodically evaluating the size and effectiveness of tax expenditures is a necessary (although not sufficient) requirement for good government.” Leo Burman’s appeal of 2003 is quoted often but followed seldom. The paper reflects on the evaluation of Germany’s twenty biggest tax expenditures commissioned by the Federal Government in 2007 and completed by a team of three European research institutes in 2009. Based on a methodological framework developed for the uniform evaluation of dissimilar tax expenditures the research team worked through tax privileges worth more than 18 billion euro, i.e. 85 per cent of all official German tax subsidies. The analysis covered exemptions from corporate and personal income taxes, value-added tax (VAT) and energy taxes. To our knowledge, this was one of the biggest evaluations of tax expenditures ever concluded in the world. The paper discusses the common methodology applied in the evaluation; and the lessons learned from the research effort. It gives an overview of evaluation results and eventual policy lessons to be learned from them

Stabilität tropischer Waldrandzonen in Indonesien: STORMA – Ein Projekt zur Untersuchung sozioökonomischer und ökologischer Aspekte der Landnutzung in Zentral-Sulawesi

Das Projekt Stability of Rainforest Margins in Indonesia, kurz STORMA, wurde im Juli 2000 als Sonderforschungsbereich eingerichtet und wird von der Deutschen Forschungsgemeinschaft gefördert. Es befasst sich mit den Randbereichen des Lore-Lindu-Nationalparks

Molecular and functional characterization of BDNF-overexpressing human retinal pigment epithelial cells established by sleeping beauty transposon-mediated gene transfer

More and more patients suffer from multifactorial neurodegenerative diseases, such as age-related macular degeneration (AMD). However, their pathological mechanisms are still poorly understood, which complicates the development of effective therapies. To improve treatment of multifactorial diseases, cell-based gene therapy can be used to increase the expression of therapeutic factors. To date, there is no approved therapy for dry AMD, including late-stage geographic atrophy. We present a treatment option for dry AMD that transfers the brain-derived neurotrophic factor (BDNF) gene into retinal pigment epithelial (RPE) cells by electroporation using the plasmid-based Sleeping Beauty (SB) transposon system. ARPE-19 cells and primary human RPE cells were co-transfected with two plasmids encoding the (SB100X) transposase and the transposon carrying a BDNF transcription cassette. We demonstrated efficient expression and secretion of BDNF in both RPE cell types, which were further increased in ARPE-19 cell cultures exposed to hydrogen peroxide. BDNF-transfected cells exhibited lower apoptosis rates and stimulated neurite outgrowth in human SH-SY5Y cells. This study is an important step in the development of a cell-based BDNF gene therapy that could be applied as an advanced therapy medicinal product to treat dry AMD or other degenerative retinal diseases