Productive and Unproductive Reactions of MNEs to International Tax Differentials

I provide initial evidence that international taxation impacts the magnitude of R&D investments in the UK. Relying on a simple theoretical model, I show that the observed response is consistent with the mispricing of intra-group transactions. My structural estimates suggest that transfer prices for internally provided innovation increase by around three percent in response to a one percentage point increase in foreign taxation. This response is more pronounced than previous estimates of aggregate profit shifting indicate, supporting concerns on the susceptibility of intangible assets to facilitate profit relocation. (author's abstract)Series: WU International Taxation Research Paper Serie

Who benefits from Zero-Ratings? A Brief Note on the South African VAT System

Twenty years after overcoming Apartheid, South Africa still suffers from poverty and inequality. Recent data (Income and Expenditure Survey 2011) indicates that one third of the population lives on less than USD 0.70 per day while the upper tercile has USD 28 available. The country also faces other complex challenges, including high levels of unemployment, a resource-biased economy and low levels of education, and structural reforms are much needed to put the economy on a path of sustained growth. However, structural reforms require a broad consent within society, and inequality, clearly, is a major hindrance to this. By choosing how to collect revenue and how to spend it, South Africa's government has two instruments at their disposal in order to alleviate inequality and facilitate reform. Like most modern economies, South Africa is increasingly relying on indirect taxation. The combined revenue generated by VAT, excise taxes, and the fuel and gas levy, make up 35% of total revenue. In the light of growing income inequality, this development is remarkable as wealthy individuals tend to spend a smaller proportion of their income on consumption. Indirect taxation thus potentially places a relatively higher burden on the poor. To counteract an aggravation of income inequality, a range of commodities, held to be important for the poor, are currently zero-rated under South Africa's VAT system. And some studies find that this policy measure is partly effective in reducing the regressive effect (Fourie and Owen, 1993; Jansen et al., 2012). However, while studies on the regressive effect of VAT are potentially valuable, they are certainly non-conclusive in appraising the welfare consequences of zero-ratings. Increasing the rates on such commodities would not only entail an increased burden on the poor, but also an increase in governmental revenues. Depending on the redistribution of such additional revenues, the poor could either benefit or not from this reform and the conclusion would be fairly independent from the overall regressiveness of the system. In this paper, we re-evaluate the effectiveness of zero-rating as a measure to alleviate poverty in South Africa and extend earlier work by incorporating both sides of fiscal action in our analysis. We clarify the interlink between welfare effects and consumption taxation by retracing a simple model developed by Keen (2013), in Section 2, which we then apply to the South African case. In doing so, we employ data from the most recent Income and Expenditure survey to derive distributions of household spending and governmental spending in Section 3. We conclude in Section 4. (authors' abstract)Series: WU International Taxation Research Paper Serie

Taxing Income in the Oil and Gas Sector - Challenges of International and Domestic Profit Shifting

This paper provides specific estimates on the scale of profit shifting among hydrocarbon MNEs. We estimate a lower-bound semi-elasticity of reported profits to sector specific income taxation of -1.88. To assess the importance of domestic profit-shifting channels, we take advantage of domestic tax differentials among hydrocarbon producers facing additional rent taxes and find that domestic profit shifting accounts for about one third of total income concealed. Overall, we estimate revenue losses in the sector due to profit-shifting amount to 12% - 35% of the income tax base, depending on the characteristics of a country's tax regime. We also observe a higher vulnerability of non-OECD economies to profit shifting in our sample, which consists of 294 domestic and multinational parents and subsidiaries during the period from 2004-2012. Finally, our analysis confirms the mitigation effect of documentation requirements for internal transactions. However, we also find that increased enforcement prompts MNEs in the Oil and Gas sector to rely more heavily on the reallocation of profits at the domestic level. (authors' abstract)Series: WU International Taxation Research Paper Serie

Optimizing plug-in electric vehicle charging in interaction with a small office building

This paper considers the integration of plug-in electric vehicles (PEVs) in micro-grids. Extending a theoretical framework for mobile storage connection, the economic analysis here turns to the interactions of commuters and their driving behavior with office buildings. An illustrative example for a real office building is reported. The chosen system includes solar thermal, photovoltaic, combined heat and power generation as well as an array of plug-in electric vehicles with a combined aggregated capaci-ty of 864 kWh. With the benefit-sharing mechanism proposed here and idea-lized circumstances, estimated cost savings of 5% are possible. Different pricing schemes were applied which include flat rates, demand charges, as well as hourly variable final customer tariffs and their effects on the operation of intermittent storage were revealed and examined in detail. Because the plug-in electric vehicle connection coincides with peak heat and electricity loads as well as solar radiation, it is possible to shift energy demand as desired in order to realize cost savings. --Battery storage,building management systems,dispersed storage and generation,electric vehicles,load management,microgrid,optimization methods,power system economics,road vehicle electric propulsion

Tax distortions from inflation: What are they? How to deal with them?

Inflation that is fully anticipated has few real effects in purely private market economies, but this need not be the case in the presence of taxation. In practice, tax systems are not neutral with respect to inflation – though some countries have attempted make their tax systems inflation-neutral in the past – and this paper provides a comprehensive overview of the most relevant non-neutralities, drawing on existing literature, but also supplying new illustrations and evidence of the effects. The paper shows, for example, how taxing inflationary gains can have a large impact on effective tax rates – even at relatively low rates of inflation. It also shows how partial coverage of protection against inflation – for some types of incomes only – can create additional distortions. A new empirical analysis reveals how the erosion of the value of depreciation allowances through inflation affects investment

Learning and restricted perceptions in the New Keynesian Model

Gegenstand dieser Arbeit ist die Analyse von optimaler Geldpolitik, unter der Annahme, dass Erwartungen des privaten Sektors auf ökonometrischen Modellen beruhen. Adaptives Lernens wird als minimale, wenngleich notwendige Abweichung vom Konzept der Rationalen Erwartungen (Muth, 1960) dargestellt. Die Implikationen dieser Annahme werden für das "New Keynesian" Modell analysiert. Bedingungen werden charakterisiert unter welchen die kontinuierliche Aktualisierung der ökonometrischen Modelle und der damit verbundenen subjektiven Erwartungen zu einem Gleichgewicht Rationaler Erwartungen (REE) führen kann. Diese Bedingungen werden als notwendige Voraussetzung für die Plausibilität eines REE präsentiert und der Forderung nach Determiniertheit des Gleichgewichts gegenübergestellt. Aufgrund dieser Untersuchungen wird argumentiert, dass die Orientierung einer optimalen Geldpolitik an subjektiven Erwartungen, der Stabilität des Gleichgewichts förderlich ist. Abschließend wird die Relevanz einer transparenten Geldpolitik besprochen und in diesem Zusammenhang das Konzept des Gleichgewichts eingeschränkter Wahrnehmungen (Restricted Perceptions Equilibrium) erläutert.This thesis investigates optimal monetary policy under the assumption that private sector expectations are based on econometric models. Adaptive learning is presented as a minimal deviation from the concept of Rational Expectations (Muth, 1960). Its implications for the dynamics of the New Keynesian model are analysed. Conditions are characterised under which the continuous updating of econometric models and the hereby associated subjective beliefs may asymptotically lead to a Rational Expectations Equilibrium (REE). These conditions, which are evaluated as necessary for the plausibility of a REE, are compared with the requirement of determinacy. Based on these considerations it is argued that the orientation of optimal monetary policy on subjective expectations is conducive for the stability of equilibrium. Furthermore, in course of discussing the relevance of central bank‘s transparency, the concept of a Restricted Perceptions Equilibrium is introduced

Zur Analyse parenthetischer Strukturen über einen erweiterten Merge-Begriff

Die Arbeit setzt sich mit der Analyse von Parenthesen (und ähnlichen Phänomenen) nach Mark de Vries auseinander, der allerlei parataktische Strukturen über die Einführung einer terminologischen Teilung des strukturbildenden Mechanismus "Merge" (nach Chomsky) erklärt. In einem ersten Teil werden theoretische Grundlagen zum Phänomen „Parenthese“ und seiner Analyse bzw. Grundproblemstellungen der Analyse von Parenthesen innerhalb der Grammatiktheorie und im Besonderen innerhalb syntaktischer Modelle diskutiert, deren Kenntnis unerlässlich ist in der weiteren eingehenden Diskussion und Kritik des konkreten Analyseversuchs nach De Vries im zweiten Teil. Besonderes Augenmerk erfährt dabei die Definitionsproblematik, die eingehend thematisiert und analysiert wird. Im zweiten Teil wird De Vries' Argumentation nachvollzogen und kritisch betrachtet. Probleme innerhalb der Argumentationslinien werden aufgezeigt und die gesamte Theorie in Hinsicht auf gängige syntaktische Modelle analysiert

Fast responding ephedrine detection with miniaturized surface ionization gas sensors

AbstractWe report on novel kinds of miniaturized gas sensors whose operation is based on the principle of surface ionization (SI). In SI gas sensing adsorbed analyte species are ionized at a heated solid surface and the formed ions are extracted towards an oppositely charged collector electrode positioned a short distance from the emitting surface. Here, we show that SI sensors allow for a fast, sensitive and selective detection of illicit drugs in the presence of large concentrations of solvent water

Gegen die "tödliche Dekadenz": Agitation in Zeiten des Ukraine-Krieges am Beispiel von Björn Höcke

Der vorliegende Beitrag analysiert drei Reden, die der AfD-Politiker Björn Höcke im ersten Jahr des Ukraine-Krieges gehalten hat. Es wird untersucht, ob diese Reden dem Typus der faschistischen Agitation entsprechen, den Leo Löwenthal vor fast 75 Jahren beschrieben hat. Löwenthals "Studien zur faschistischen Agitation" eignen sich auch heute noch, um sozialpsychologische Dimensionen rechtsextremer Mobilisierung in Krisenzeiten zu analysieren. Anhand der Reden wird untersucht, welche Strategien Höcke anwendet und warum sich der Ukraine-Krieg auf besondere Weise eignet, um in völkischnationale Ideologie implementiert zu werden. Hierfür wurden Höckes Reden mithilfe eines deduktiv-induktiven Verfahrens in Anlehnung an die qualitativ-strukturierende Inhaltsanalyse nach Kuckartz ausgewertet. Zur ideologischen Einordnung wurden die Ergebnisse mit Theorien von Vordenkern der 'Neuen Rechten', wie Carl Schmitt, Alain de Benoist oder Henning Eichberg, verknüpft. Die Analyse zeigt, dass Höcke dem Typus des Agitators weitestgehend entspricht und den Krieg durch eine "Entweder-Oder"-Erzählung in ein völkisches, antiwestliches und antimodernes Weltbild integriert.This article analyzes three speeches given by AfD politician Björn Höcke during the first year of the Ukraine war. It examines whether these speeches can be classified as fascist agitation described by Leo Löwenthal almost 75 years ago. Löwenthal's A Study of the Techniques of the American Agitator is still suitable today for analyzing socio-psychological dimensions of right-wing extremist mobilization in times of crisis. Based on the speeches, the study examines the strategies Höcke uses and why the Ukraine war is particularly suitable to be implemented in ethnic-national ideology. For this purpose, Höcke's speeches were analyzed using a deductive-inductive method based on the qualitative-structuring content analysis by Kuckartz. In order to classify the speeches ideologically, the results were linked to theories of thought leaders of the 'Neue Rechte', such as Carl Schmitt, Alain de Benoist or Henning Eichberg. The analysis shows that Höcke can be largly classified as agitator and integrates the war into an ethnic-national anti-western and anti-modern ideology through an "Either-or" narrative