The distributional impact of KiwiSaver incentives

New Zealand’s approach to retirement incomes profoundly changed with the recent introduction of KiwiSaver and its associated tax incentives. Previous policy reduced lifetime inequality but KiwiSaver and its tax incentives will increase future inequality and lead to diverging living standards for the elderly. In this paper we evaluate the distributional effects of these tax incentives. Using data from a nationwide survey conducted by the authors, we estimate the value of the equivalent income transfer provided to individuals by the tax incentives for KiwiSaver participation. Concentration curves and inequality decompositions are used to compare the distributive impact of these tax incentives with those for New Zealand Superannuation. Estimates are reported for both initial and lifetime impacts, with the greatest effect on inequality apparent in the lifetime impacts

Аналитический обзор методов оценки эффективности налогового стимулирования особых экономических зон

Налоговые льготы, как и налоговая политика в целом, являются частью комплекса мер, направленных на улучшение инвестиционного климата при создании особых экономических зон (ОЭЗ). При этом наиболее распространенными инструментами налоговой политики являются освобождение от уплаты налогов, применение пониженных налоговых ставок и предоставление налоговых льгот. Один из важнейших вопросов функционирования ОЭЗ - эффективность предоставляемых налоговых льгот. Цель исследования - изучение методов оценки эффективности налогового стимулирования в таких зонах. В статье проводится анализ практик оценки налогового стимулирования ОЭЗ, которые были разделены на группы: исследование влияния налоговых льгот на отдельные показатели развития территорий и комплексные оценки эффективности налогового стимулирования в ОЭЗ. Выделяются объекты исследования, описывается методология его проведения и обобщаются результаты. Среди множества подходов к оценке эффективности налогового стимулирования ОЭЗ, базирующихся на самых разнообразных методах экономико-математических исследований, изучены и классифицированы эконометрические и статистические методы. В работе описывается метод «разность разностей», активно используемый исследователями для оценки влияния налоговых льгот в ОЭЗ на отдельные показатели развития территорий. Кроме того, исследуются эффекты применения налоговых льгот при комплексной оценке налогового стимулирования, классифицируются показатели количественной оценки эффективности налоговых льгот на территориях ОЭЗ. Проведенное исследование позволит использовать полученные результаты для оценки эффективности налоговых льгот на территориях опережающего развития в России.Tax incentives and the tax policy as a whole are components of a system of solutions that are aimed at the economic climate improvement while establishing special economic zones (SEZ). The most common instruments of the tax policy are tax exemption, lower tax rates and tax concessions. One of the key issues of SEZs’ performance is the effectiveness of tax advantages applied in particular zone. The purpose of this study is to examine methods of assessing of tax incentives effectiveness in special economic zones. The study includes overview of existing approaches to tax incentives assessing in SEZs, which have been divided into the following groups: estimation of tax incentives effects on individual territorial development indicators, and comprehensive estimation of tax incentives effectiveness in a SEZ. The authors identified subjects of estimations, described each methodology and summarized the results. The authors focused their attention on and classified econometrical and statistical methods among the numerous approaches to assessing of tax incentives effectiveness in SEZs, which were built upon a variety of economic, and mathematical research techniques. The paper describes a method known as “difference in differences” that is widely implemented by scholars to estimate the effect of tax incentives in SEZs on individual territorial development indicators. This work also covers an effect of using tax incentives when conducting a comprehensive evaluation of tax advantages. It is also proposed a classification of quantitative indicators of tax incentives effectiveness in special economic zones. The study makes it possible to implement obtained results in assessing tax incentives effectiveness in the further development of Russian territories

Taxation, R&D tax incentives and patent application in Europe

The focus of this paper is on effects from tax incentives for research and development inputs (R&D) and corporate income tax on business R&D and patenting behaviour. First, we provide a theoretical discussion of tax planning with R&D and intellectual property (IP) ownership. Further, we employ firm-specific micro-data on patent applications of European corporations at the European Patent Office to test reactions on changes in R&D tax incentives and corporate tax burden. We find a positive impact of R&D tax incentives and a negative impact of the statutory corporate income tax rate on patenting. R&D incentives rather influence the tendency to invest in R&D, whereas the tax burden rather influences the scale of R&D investment and the count of patent applications. --Patent,R&D,Tax Incentives,Taxation,EU

The Effects of Fiscal Incentives for R & D in Spain

This paper explores the effect of fiscal incentives for R&D on innovation. Spain is considered one of the most generous countries in the OECD in fiscal treatment of R&D, yet our data reveal that tax incentives are little known and, especially, seldom used by firms. Restricting our empirical analysis to those firms that do report knowing about such incentives, we investigate the average effect of tax incentives on innovation, using both nonparametric methods (matching estimators) and parametric methods (Heckman’s two-step selection model with instrumental variables). First, we find that large firms, especially those that implement innovations, are more likely to use the tax incentives, while small and medium enterprises (SMEs) encounter some obstacles to using them. Secondly, the average effect of the policy is positive, but significant only in large firms. Our main conclusion is that tax incentives increase innovative activities by large and high-tech sector firms, but may be used only randomly by SME

Tax Incentives for R&D in Canada: A Review of the Recent Experience

This paper discusses the Canadian experience in the early 1980s with tax incentives for R&D.It presents some issues concerning the efficiency and cost effectiveness of the various government tax incentives in stimulating R&D.Tax Incentives for R&D, Tax Policy, Innovation policy

The Impact of R&D Tax Incentives on R&D Costs and Income Tax Burden

We analyse R&D tax incentives in a detailed way considering a multi-period setting and economic assumptions which reflect a realistic economic environment. We measure the incentive's impact on the firm's total tax payments and the R&D cost by means of the simulation model European Tax Analyzer. Using different economic settings and model firms, we run sensitivity analyses and get by that a more detailed view on the effects from R&D tax incentives against the background of the framing tax system. We find that not so much the kind but rather the specific design of R&D tax incentives, the interplay with the framing tax system and the firm's profitability relative to the level of R&D expenditures heavily influence the amount of tax subsidy for R&D. --R&D,Tax incentives,Corporate Tax Burden,EU

The Economics of Location-Based Tax Incentives

Many local governments offer rich tax deals to firms to get these firms to come to their cities. In this brief essay, I review the economics of location-based tax incentives. I first address the positive economics of these incentives and present five theories of why these tax incentives occur. I then consider the normative aspects of these incentives and discuss the conditions under which these theories lead to optimal locations of firms and to optimal bundles of public goods. In general, I argue that tax incentives will generally lead to more efficient locational decisions. There may be undesirable redistributional consequences of these incentives, but these are best handled by national redistribution policy.

FEW COORDINATES OF THE TAX INCENTIVES IN ROMANIA

Each taxpayer willingness to pay as little in taxes and duties can be materialized by the benefit provided by tax incentives. Tax incentives are an essential component of the technical elements required for sampling, and they appear as economic and social policy measures, with a stimulating role. Without claiming a comprehensive approach, through this paper, we refer to the typology, methodology and effects of granting tax incentives, trying to specify for which tax relief is granted, who are awarded and for whose benefit they were designed.tax incentives; discounts; exemptions; financial support; benefits

How tax incentives affect decisions to invest in developing countries

The authors contend that in evaluating and designing investment incentives in developing economies, analysts should consider their effect on: the marginal effective tax rate (METR). Even simple tax incentives can perversely affect the METR. Many schemes have relatively generous write-offs to begin with, so generous that a negative marginal effective tax rate is not uncommon. In these circumstances, tax rate reductions (including tax holidays) can discourage investment. Investment tax credits are more likely to be effective. Loss firms. Incentives that do not have generous loss-offsetting or refundability provisions willbe of limited use to firms likely to suffer losses (including small growing firms and firms in risky environments). Cash flows. Incentives that improve firms'cash flows may be more effective than those that do not. Refundability may be important here. Simply adopting cash-flow costing principles with refundability may be more effective than reducing tax rates. Foreign-owned firms. If the value of a tax incentive is fully offset by reduced credits for foreign taxes, the incentive effect will probably be minimal. Capital allocation among assets. Some measures favor short- over long-lived capital, machinery over inventory, some industries over others. Incentives that encourage investment selectively may cause distortions in the way capital is allocated. Other factors to be considered in designing tax incentives: inflation, which is typically high in developing economies. Incentives should offset the effects of inflation; tax evasion, a common problem in developing countries; technology transfer; the fulfillment of social, environmental, and regional non-economic objectives; the effects on firms'organization (do the incentives encourage mergers, takeovers, or bankruptcy?)Economic Theory&Research,Environmental Economics&Policies,International Terrorism&Counterterrorism,Public Sector Economics&Finance,Banks&Banking Reform