Cash flow or income? : the choice of base for company taxation

Considerable interest has been expressed in recent years by tax theorists as well as practitioners, for the taxation of companies based on their cash flow. Unlike the equity-income tax base, which requires the deductibility of economic depreciation and debt financing costs, the cash-flow base expenses capital at the point of purchase, eliminating the need for the subsequent costing of this capital. This paper raises some of the issues that would arise in trying to implement a company tax either in the form of an indexed equity-income or a cash-flow tax. Issues raised include: (i) administrative complexity; (ii) international tax coordination and competition; and (iii) transition problems. In a closed economy the cash-flow tax seems a simple, efficient form of company taxation, administratively straightforward and neutral with regard to investment decisions. The more complicated equity-income tax is harder to defend in a closed economy.Economic Theory&Research,Public Sector Economics&Finance,Environmental Economics&Policies,Banks&Banking Reform,International Terrorism&Counterterrorism

Spherical Universe topology and the Casimir effect

The mode problem on the factored 3--sphere is applied to field theory calculations for massless fields of spin 0, 1/2 and 1. The degeneracies on the factors, including lens spaces, are neatly derived in a geometric fashion. Vacuum energies are expressed in terms of the polyhedral degrees and equivalent expressions given using the cyclic decomposition of the covering group. Scalar functional determinants are calculated and the spectral asymmetry function treated by the same approach with explicit forms on one-sided lens spaces.Comment: 33 pages, 1 figure. Typos corrected and one reference adde

Optimal redistributive tax and education policies in general equilibrium

This paper studies optimal linear and non-linear income taxes and education subsidies in two-type models with endogenous human capital formation, endogenous labor supply, and endogenous wage rates. Assuming constant human capital elasticities, human capital investment should be efficient under optimal linear policies, whether general equilibrium effects are present or not. Hence, education subsidies should not be used for distributional reasons. Due to general equilibrium effects, optimal linear income taxes may even become negative. Optimal non-linear policies exploit general equilibrium effects for redistribution. The high-skilled type optimally has a negative marginal income tax rate and a positive marginal education subsidy. The low-skilled type optimally faces a positive marginal income tax rate and a marginal tax on education. Simulations demonstrate that general equilibrium effects have only a modest effect on optimal non-linear policies

Anosov representations: Domains of discontinuity and applications

The notion of Anosov representations has been introduced by Labourie in his study of the Hitchin component for SL(n,R). Subsequently, Anosov representations have been studied mainly for surface groups, in particular in the context of higher Teichmueller spaces, and for lattices in SO(1,n). In this article we extend the notion of Anosov representations to representations of arbitrary word hyperbolic groups and start the systematic study of their geometric properties. In particular, given an Anosov representation of $\Gamma$ into G we explicitly construct open subsets of compact G-spaces, on which $\Gamma$ acts properly discontinuously and with compact quotient. As a consequence we show that higher Teichmueller spaces parametrize locally homogeneous geometric structures on compact manifolds. We also obtain applications regarding (non-standard) compact Clifford-Klein forms and compactifications of locally symmetric spaces of infinite volume.Comment: 63 pages, accepted for publication in Inventiones Mathematica

Fiscal Discrimination between Consumer Groups: Tax Burden Distribution Under Price Discrimination

In this paper it is analysed, how, under price discrimination, the tax burden is shared between the distinct consumer groups. Unit and ad valorem taxes are compared, revealing an impossibility of fiscal discrimination with regard to price changes. Contrary to conventional tax incidence analysis, it is shown that quantities traded do matter. Relative market shares are decisive for the distribution of tax burdens thereby opening up an opportunity for fiscal discrimination in choosing tax types. This discriminatory potential is limited and not caused by price discrimination per se but rather due to monopolistic supply

'Windfall Profits 2.0' During the Third Phase of the EU-ETS

The first two phases of the EU-ETS were characterized by a profit increase, which was primarily due to free allowances given through grandfathering. To avoid these windfall profits and to decrease leakage, two major modifications have been implemented for the third phase: electric companies no longer receive free allowances, while energy intensive and trade exposed sectors are granted free allowances that are calculated based on firm production capacity. This paper theoretically shows a new type of profit increase in sectors that are not exposed to international competition. This paper also illustrates the profit increase for the third phase of the EU-ETS and shows that profits in the electricity sector may increase by approximately 2% when free allowances are given to the other sectors