Understanding The Antecedents And Consequences Of Sales And Use Tax Policy: Evidence From Three Studies

This dissertation consists of three separate but interrelated studies examining the antecedents and consequences of sales and use tax (SUT) policy. The first study investigates whether elements of the SUT system influence elements of economic development, and tests whether SUT rates and/or bases influence state-aggregated levels of capital expenditures and employment within the manufacturing sector from 1983-2006. Results indicate that elements of the tax base (i.e., SUT exemptions) affect these indicators of economic development, but the same relationship was not seen for SUT rates. The second study examines individual taxpayer compliance across different tax settings (i.e., the state use tax compared to the federal income tax) and tests whether differences in detection mechanisms, social norms, or ignorance explain these differences in compliance. Based on a final sample of 148 taxpayers, results show that social norms had an important influence on tax compliance differences across tax settings. The third study investigates the antecedents of states\u27 adoption of the Streamlined Sales & Use Tax Agreement (SSUTA) using both a cross-sectional empirical model and an in-depth qualitative case study of three states. Both the model and case study suggest that governmental interest groups, rather than businesses, play an important role in the adoption of inter-jurisdictional tax policy changes. Overall, the three studies within this dissertation all advance the SUT literature by using various theoretical perspectives and methodological approaches to demonstrate that governmental interest groups influence the adoption of SUT policy (antecedents), and that SUT provisions in turn influence business and individual decisions alike (consequences)

The Impact of Corruption on Firm Tax Compliance in Transition Economies: Whom Do You Trust?

Tax compliance is an important issue for governments and the public alike. To meet public needs and fund public mandates, firms around the world are expected to comply with tax laws. Factors that are related to organizational (firm) tax compliance have not been sufficiently examined in the literature. Due to the increasing global influence of transition economies, factors associated with firm tax compliance in transition economies are particularly of interest. Based on a sample of over 5,000 firms from 22 former Soviet Bloc transition economies, we find that higher levels of corruption and higher levels of particularized trust (reliance on friends and family) are associated with lower levels of tax compliance. Interestingly, we also find that the negative relationship between corruption and tax compliance is weakened in situations of higher generalized trust (trust in strangers). Overall, our study’s results suggest that institutional factors play an important role and are related to firm tax compliance behavior in transition economies

An institutional perspective on corruption in transition economies

Submitted version (preprint).This is the pre-peer reviewed version of the following article: Alon, A. & Hageman, A. (2017). An institutional perspective on corruption in transition economies. Corporate governance: An International Review, 25(3), 155-166, which has been published in final form at https://doi.org/10.1111/corg.12199. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.Manuscript Type: Empirical Research Question/Issue: Companies operating in transition economies encounter a broad range of potential challenges. In the area of tax, firms make direct tax payments but may also encounter unofficial tax costs in the form of bribery or extortion. We focus on institutional determinants, including formal rules, informal rules, and enforcement, to examine conditions under which firms are more likely to encounter these transactions. We operationalize formal rules as rule-based trust and informal rules as dispositional trust. Research Findings/Insights: Based on a sample of over 5,000 firms representing 20 transition economies, we show that when rule-based trust is high, the presence of tax enforcement activities in the form of visits and inspections by tax officials does not change the relationship between rule-based trust and unofficial payments. However, when dispositional trust is low, unofficial payments are more likely if verification activities occur. Theoretical/Academic Implications: We adopt a more holistic view and focus on the joint consideration of different institutional determinants and firm outcomes. In doing so, the article demonstrates the complexity of firms' tax environments where enforcement mechanisms can have unwelcome consequences, and, under certain conditions, create conditions for the persistence of corruption. Practitioner/Policy Implications: This paper highlights the importance of the institutional landscape, especially considering the history of institutional voids in many transition economies. The results have implications for corporate governance and caution regulators and practitioners to consider institutional complexities when implementing reforms or establishing businesses in transition economies.submittedVersio

Crystal structure of dichlorido(4,11-dimethyl-1,4,8,11-tetraazabicyclo[6.6.2]hexadecane)iron(III) hexafluoridophosphate

The title compound, [FeCl₂(C₁₄H₃₀N₄)]PF₆, contains Fe³⁺ coordinated by the four nitro­gen atoms of an ethyl­ene cross-bridged cyclam macrocycle and two cis chloride ligands in a distorted octa­hedral environment. In contrast to other similar compounds this is a monomer. Inter­molecular C-H...Cl inter­actions exist in the structure between the complex ions. Comparison with the mononuclear Fe²⁺ complex of the same ligand shows that the smaller Fe³⁺ ion is more fully engulfed by the cavity of the bicyclic ligand. Comparison with the μ-oxido dinuclear complex of an unsubstituted ligand of the same size demonstrates that the methyl groups of 4,11-dimethyl-1,4,8,11-tetra­aza­bicyclo­[6.6.2]hexa­decane prevent dimerization upon oxidation

New functional and structural insights from updated mutational databases for complement factor H, Factor I, membrane cofactor protein and C3

aHUS (atypical haemolytic uraemic syndrome), AMD (age-related macular degeneration) and other diseases are associated with defective AP (alternative pathway) regulation. CFH (complement factor H), CFI (complement factor I), MCP (membrane cofactor protein) and C3 exhibited the most disease-associated genetic alterations in the AP. Our interactive structural database for these was updated with a total of 324 genetic alterations. A consensus structure for the SCR (short complement regulator) domain showed that the majority (37%) of SCR mutations occurred at its hypervariable loop and its four conserved Cys residues. Mapping 113 missense mutations onto the CFH structure showed that over half occurred in the C-terminal domains SCR-15 to -20. In particular, SCR-20 with the highest total of affected residues is associated with binding to C3d and heparin-like oligosaccharides. No clustering of 49 missense mutations in CFI was seen. In MCP, SCR-3 was the most affected by 23 missense mutations. In C3, the neighbouring thioester and MG (macroglobulin) domains exhibited most of 47 missense mutations. The mutations in the regulators CFH, CFI and MCP involve loss-of-function, whereas those for C3 involve gain-of-function. This combined update emphasizes the importance of the complement AP in inflammatory disease, clarifies the functionally important regions in these proteins, and will facilitate diagnosis and therapy

The role of confidence in tax return preparation

This paper investigates the nature of tax preparers’ confidence, as well as how the introduction of a tax decision support system (TDSS) affects tax preparers’ confidence levels. Psychological theories of confidence (e.g., Einhorn & Hogarth, 1978) are drawn upon to develop predictions regarding the role of process (ex-ante) and outcome (ex-post) confidence in tax return preparation. An experimental methodology is used with 114 inexperienced and experienced participants that prepare an individual income tax return manually or with tax preparation software (a TDSS). Less experienced tax preparers have lower levels of ex-ante confidence, and are more likely to be overconfident in the accuracy of their performance. Furthermore, when examining only the participants that made errors in their tax return preparation task, those that prepare the return with the TDSS are significantly more likely to be overconfident in their performance. These results support the predictions of Noga & Arnold (2002) and suggest that inexperienced users’ over-reliance on a TDSS (Masselli et al., 2002) may be due to individuals’ overconfidence in the accuracy of their performance with the software

An institutional perspective on corruption in transition economies

Manuscript Type: Empirical Research Question/Issue: Companies operating in transition economies encounter a broad range of potential challenges. In the area of tax, firms make direct tax payments but may also encounter unofficial tax costs in the form of bribery or extortion. We focus on institutional determinants, including formal rules, informal rules, and enforcement, to examine conditions under which firms are more likely to encounter these transactions. We operationalize formal rules as rule-based trust and informal rules as dispositional trust. Research Findings/Insights: Based on a sample of over 5,000 firms representing 20 transition economies, we show that when rule-based trust is high, the presence of tax enforcement activities in the form of visits and inspections by tax officials does not change the relationship between rule-based trust and unofficial payments. However, when dispositional trust is low, unofficial payments are more likely if verification activities occur. Theoretical/Academic Implications: We adopt a more holistic view and focus on the joint consideration of different institutional determinants and firm outcomes. In doing so, the article demonstrates the complexity of firms' tax environments where enforcement mechanisms can have unwelcome consequences, and, under certain conditions, create conditions for the persistence of corruption. Practitioner/Policy Implications: This paper highlights the importance of the institutional landscape, especially considering the history of institutional voids in many transition economies. The results have implications for corporate governance and caution regulators and practitioners to consider institutional complexities when implementing reforms or establishing businesses in transition economies

A Regional Diffusion Theory Explanation For States\u27 Proposal And Adoption Of Anti-Passive Investment Company Laws

We investigate the propensity of states to propose and adopt laws prohibiting the deduction of intercompany interest or royalties in response to the passive investment company tax minimization strategy (anti-PIC statutes). Using event history analysis with panel data from 1991-2005, we investigate whether regional diffusion theory explains the proposal and adoption of anti-PIC statutes. Our results provide support for the regional diffusion theory explanation, in that both proposing and adopting states have a higher proportion of adopting states in their particular Bureau of Economic Analysis (BEA) region. We find no relationship between decreases in states\u27 real corporate income tax revenues and their adoption of anti-PIC statutes, but do find that proposals are more common in states with slower growth in real personal income. This study contributes to existing state and local tax policy research by demonstrating that certain types of policy decisions may arise from reasons closely linked to herding behavior. © 2011 Elsevier Inc