Taxes and Benefits: Two Distinct Options to Cheat on the State?

Economists have studied many aspects of tax evasion. The vast literature has concentrated on the individual taxpayer’s decision on avoiding taxes by underreporting income. However no comprehensive investigation of the individual taxpayer’s decision on claiming unjustified subsidies (e. g. by underreporting income) exists so far. Employing Austrian survey data we show that the basic attitude towards avoiding taxes (tax morale) and claiming unjustified subsidies (benefit morale) have different determinants. Our applied econometric framework relaxes the often stated assumption of the exogeneity of income as an explaining variable of tax morale. Furthermore we find empirical evidence that tax morale and benefit morale have different impact on actual behavior: Whereas a low benefit morale leads indeed to unjustified claims on benefits and therefore to higher income, we find no statistically significant effect of tax morale on tax evasion. These different determinants and effects of tax morale and benefit morale can be explained by differences in the deterrence factors from the traditional economic approach, by alternative theories or simply by more opportunities to cheat on the state by unjustified subsidies in contrast to avoiding taxes.tax; subsidies; tax morale; benefit morale; tax evasion; benefit fraud

Tax compliance under tax regime changes

In this paper we focus on the compliance effects of tax regime changes. According to the economic model of tax evasion, a tax reform should affect compliance through its impact on tax rates and incentives. Our findings demonstrate the importance of at least two further effects not covered by the traditional model: First, reform losers tend to evade more taxes after the reform. Second, a reform from a proportionate to a progressive system decreases compliance compared to a switch in the reverse direction. However, the level of compliance is generally higher under a progressive than under a proportionate regime.tax reforms; tax compliance; experiment

Tax compliance under tax regime changes

In this paper we focus on the compliance effects of tax regime changes. According to the economic model of tax evasion, a tax reform should affect compliance through its impact on tax rates and incentives. Our findings demonstrate the importance of at least two further effects not covered by the traditional model: First, reform losers tend to evade more taxes after the reform. Second, a reform from a proportionate to a progressive system decreases compliance compared to a switch in the reverse direction. However, the level of compliance is generally higher under a progressive than under a proportionate regime. --tax reforms,tax compliance,experiment

An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale

Does the supply of a welfare state create its own demand? Many economic scholars studying welfare arrangements refer to Say’s law and insinuate a self-destructive welfare state. However, little is known about the empirical validity of these assumptions and hypotheses. We study the dynamic effect of different welfare arrangements on benefit fraud. In particular, we analyze the impact of the welfare state on the respective social norm, i. e. benefit morale. It turns out that a high level of public social expenditures and a high unemployment rate are associated with a small positive (or no) immediate impact on benefit morale, which however is crowded out by adverse medium and long run effects.Welfare state, social norms, benefit fraud, benefit morale

An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale

Does the supply of a welfare state create its own demand? Many economic scholars studying welfare arrangements refer to Say’s law and insinuate a self-destructive welfare state. However, little is known about the empirical validity of these assumptions and hypotheses. We study the dynamic effect of different welfare arrangements on benefit fraud. In particular, we analyze the impact of the welfare state on the respective social norm, i. e. benefit morale. It turns out that a high level of public social expenditures and a high unemployment rate are associated with a small positive (or no) immediate impact on benefit morale, which however is crowded out by adverse medium and long run effects.Welfare state, social norms, benefit fraud, benefit morale

Current dependence of grain boundary magnetoresistance in La_0.67Ca_0.33MnO_3 films

We prepared epitaxial ferromagnetic manganite films on bicrystal substrates by pulsed laser ablation. Their low- and high-field magnetoresistance (MR) was measured as a function of magnetic field, temperature and current. At low temperatures hysteretic changes in resistivity up to 70% due to switching of magnetic domains at the coercitive field are observed. The strongly non-ohmic behavior of the current-voltage leads to a complete suppression of the MR effect at high bias currents with the identical current dependence at low and high magnetic fields. We discuss the data in view of tunneling and mesoscale magnetic transport models and propose an explicit dependence of the spin polarization on the applied current in the grain boundary region.Comment: 5 pages, to appear in J. Appl. Phy

Depression, School Performance, and the Veridicality of Perceived Grades and Causal Attributions

An external criterion was assessed to test whether depressives have distorted perceptions of covariation information and whether their attributions are consistent with this information. Students’ actual and self-perceived grades, depression status, and attributions for failures were assessed. Furthermore, partici pants estimated average grades. Generally, self-perceived own past grades were inflated. Depressed students and those with low grades distorted their own grades (but not the average grade) more to their favor than individuals low in depression and those with high grades. Depression went along with lower actual grades and with internal, stable, and global failure attributions. Mood differences in attributions were not due to differences in previous grades. Depressed individuals drew (unrealistically) more depressogenic causal inferences when they perceived average grades to be low than when average grades were perceived to be high. However, they (realistically) attributed failure more in a depressogenic fashion than did nondepressives when their own grade history was low

Which role for a European Minister of Economy and Finance in a European Fiscal Union?

The European Commission has proposed to inaugurate a European Minister of Economy and Finance with the broad purpose of streamlining the complex and fragmented decision-making processes within the European Monetary Union. The Minister would jointly serve as Vice-President of the Commission and President of the Eurogroup, and have the tasks of coordinating budgetary instruments and structural reforms, designing and implementing adequate fiscal policies for the euro area, coordinating the enforcement of the Stability and Growth Pact, among others. This policy report discusses the potential role the Minister could play in the development of the European Fiscal Union. The report lays out the main challenges along the current institutional solutions facing several dimensions of the Fiscal Union, in particular related to fiscal sustainability, macroeconomic shocks, incentives of structural reforms, and the optimum provision of European public goods. The report then discusses whether and to what degree the new European Minister of Economy and Finance can provide appropriate solutions to these challenges for the Fiscal Union

Histaminergic H3-Heteroreceptors as a Potential Mediator of Betahistine-Induced Increase in Cochlear Blood Flow

OBJECTIVE Betahistine is a histamine-like drug that is considered beneficial in Ménière's disease by increasing cochlear blood flow. Acting as an agonist at the histamine H1-receptor and as an inverse agonist at the H3-receptor, these receptors as well as the adrenergic \textgreeka2-receptor were investigated for betahistine effects on cochlear blood flow. MATERIALS AND METHODS A total of 54 Dunkin-Hartley guinea pigs were randomly assigned to one of nine groups treated with a selection of H1-, H3- or \textgreeka2-selective agonists and antagonists together with betahistine. Cochlear blood flow and mean arterial pressure were recorded for 3 min before and 15 min after infusion. RESULTS Blockage of the H3- or \textgreeka2-receptors caused a suppression of betahistine-mediated typical changes in cochlear blood flow or blood pressure. Activation of H3-receptors caused a drop in cochlear blood flow and blood pressure. H1-receptors showed no involvement in betahistine-mediated changes of cochlear blood flow. CONCLUSION Betahistine most likely affects cochlear blood flow through histaminergic H3-heteroreceptors