On Choosing a Flat-Rate Income Tax Schedule

This paper applies a numerical optimization technique using microunit tax data to the problem of choosing the parameters of a flat-rate tax system, should one be desired. Our approach is to first formulate explicit objectives that a flat-rate tax might reasonably be designed to meet, such as minimizing the extent of changes in households' tax burdens and minimizing the efficiency cost of the tax system. The next step uses an optimization algorithm to calculate the flat-rate schedule which comes closest to meeting the objectives,subject to the constraint that it raise the same revenue as the current incometax system. The calculations are carried out using a sample of 947 tax returns randomly drawn from the Treasury Tax File for 1977 which are updated to repro-duce the pattern of tax returns that would be filed in 1982.The analysis shows that the flat-rate system which minimizes the sum of the absolute deviations in tax liabilities features a marginal tax rate between 0.204 and 0.254, though a different definition of tax burden changes which puts more emphasis on reproducing the tax burdens of high-income households has an optimal marginal tax rate of 0.382. We also derive the optimal flat-rate schedules when another objective is to minimize the efficiency cost of the tax system.

Investigating the Impact of Carbon Tax to Power Generation in Java-Bali System by Applying Optimization Technique

Java-Bali power system dominates the national installed capacity and will contribute to about 76% of the national CO2 emissions from the electricity sector in the future. Thus, minimizing CO2 emission from the Java-Bali system can help Indonesia to reduce the national CO2 emissions level. We apply optimization approach to investigate this problem by including carbon tax into the cost function. We analyzed data based on electricity generating system in 2008. In general the optimization showed that diesel and gas turbine is not needed in the power plant system. Further, the simulation showed that if Indonesia adopted carbon tax by US$56/ton CO2 - USD 86/tCO2; it will lead to three major changing. First, carbon tax will increase the cost of power plant or equivalently increase tax revenue to about 2.1$ 50/tCO2. There are some weaknesses from this study such as not use strong assumption for availability factor and generating costs. This study proposed that government needs to optimize utilization of combine cycle power plan to offset steam power and implement carbon tax above US$ 50/ ton CO2, to reduce CO2 emissions significantly.Power generation, Carbon tax, Optimization

Optimizing Urban Distribution Routes for Perishable Foods Considering Carbon Emission Reduction

The increasing demand for urban distribution increases the number of transportation vehicles which intensifies the congestion of urban traffic and leads to a lot of carbon emissions. This paper focuses on carbon emission reduction in urban distribution, taking perishable foods as the object. It carries out optimization analysis of urban distribution routes to explore the impact of low carbon policy on urban distribution routes planning. On the base of analysis of the cost components and corresponding constraints of urban distribution, two optimization models of urban distribution route with and without carbon emissions cost are constructed, and fuel quantity related to cost and carbon emissions in the model is calculated based on traffic speed, vehicle fuel quantity and passable time period of distribution. Then an improved algorithm which combines genetic algorithm and tabu search algorithm is designed to solve models. Moreover, an analysis of the influence of carbon tax price is also carried out. It is concluded that in the process of urban distribution based on the actual network information, the path optimization considering the low carbon factor can effectively reduce the distribution process of CO2, and reduce the total cost of the enterprise and society, thus achieving greater social benefits at a lower cost. In addition, the government can encourage low-carbon distribution by rationally adjusting the price of carbon tax to achieve a higher social benefit

Optimal Tax Depreciation under a Progressive Tax System

The focus of this paper is on the effect of a progressive tax system on optimal tax depreciation. By using dynamic optimization we show that an optimal strategy exists, and we provide an analytical expression for the optimal depreciation charges. Depreciation charges initially decrease over time, and after a number of periods the firm enters a steady state where depreciation is constant and equal to replacement investments. This way, the optimal solution trades off the benefits of accelerated depreciation (because of discounting) and of constant depreciation (because of the progressive tax system). We show that the steady state will be reached sooner when the initial tax base is lower or when the discounting effect is stronger.tax depreciation;progressive tax system;discounting;dynamic optimization;path coupling

TAX OPTIMIZATION THROUGH TRANSFER PRICING, COMMON AND MANIPULATIVE PRACTICE

This paper is about how multinational enterprises choose transfer prices in the presence of differential corporate income tax rates. A transfer prince is a value placed on the goods which are traded between divisions of an organization. We review and extetransfer pricing, tax optimization, tax reduction

Taxing Expats. Instrumental versus Expressive Voting Compared

It is common knowledge that mobile individuals are difficult to tax. Governments accommodate these difficulties by granting special tax reductions to mobile individuals as it is expedient to get some tax revenue from these individuals rather than to lose them as tax payers completely. Taxing according to expediency is, however, criticized by ordinary tax payers who claim that the basic principles of tax equity are consequently violated. Therefore governments have to solve a difficult trade off between the two goals in order to survive. The variables entering in this optimization process remain disguised in the normal case of a representative democracy. In a direct democracy, however, the trade-off between tax expediency and tax equity principles is revealed by voters.In this paper we distinguish between situations where voters vote instrumentally in favour of tax expediency and where voters vote expressively in favour of equity principles. A popular vote in the canton of Zurich of 2009 serves as a natural experiment for testing the instrumental versus expressive voter hypotheses. We find that instrumental voting prevails in small rural municipalities and expressive voting in larger cities. As expressive voters are in majority in the canton, they exert a cross border externality by imposing their will on the majority decisions of the smaller municipalities. This observation may be of a particular importance when, on the federal level, expressive urban voters may impose their will on the voters of rural cantons voting instrumentally.political economics of taxation

Bunching and Non-Bunching at Kink Points of the Swedish Tax schedule

The compensated taxable income elasticity at a given income level is proportional to the number of individuals who bunch at a convex kink point. This holds true even in the presence of optimization frictions if the jump in marginal tax rates is suciently large. In this paper we estimate bunching of taxpayers at a very large kink point of the Swedish tax schedule. During the period of study the change in the log net-of-tax rate reached a maximum value of 45.6%. Interestingly, we nd no economically signi cant bunching of wage earners at this large kink. Self-employed individuals, on the other hand,display clear bunching, but the implied elasticities are not very large. Following Chetty (2011) we calculate an upper bound on the structural elasticity for wage earners consistent with our estimate. If wage earners on average tolerate 1% of their disposable income in optimization costs, the upper bound on the taxable income elasticity is 0.39. We also evaluate the performance of the bunching estimator by performing Monte Carlo simulations.bunching; taxable income; bounds; optimization frictions

Pengaruh Sanksi Administrasi dan Surat Paksa terhadap Optimalisasi Pencairan Tunggakan Pajak (Studi pada Kantor Pelayanan Pajak Pratama Singosari)

The trust given by the government to taxpayers in self-assessment system should be able to run well according to the plan. Taxpayers are capable for performing their tax duty well and properly without negligence, deliberateness, and ignorance concerning this duty. In order to minimize these actions, there should be law enforcement in the obedience of the taxpayers. This study is aimed to (1) Know whether the administration charge and distress warrant has significant effects on the optimization of Disbursement of Tax Arrears. (2) Analyze and explain whether the administration charge has partially significant effects on the optimization of Disbursement of Tax Arrears, and (3) Analyze and explain whether the distress warrant has partially significant effects on the optimization of Disbursement of Tax Arrears.The kind of study used in this research is quantitative study, which is used to test hypothesis about the effects of the administration charge and distress warrant on the optimization of Disbursement of Tax Arrears. The population in this study is Taxpayers who receive administration charge and distress warrant and have tax arrears in Small Tax Office Singosari.The result of this study exclaimed that administration charge and distress warrant Variables have simultaneously significant effects on the optimization of Disbursement of Tax Arrears. Partially, administration charge and distress warrant Variables havesignificant effects on the optimization of Disbursement of Tax Arrears. It is suggested for the next researchers to employ other variables that affect the optimization of Disbursement of Tax Arrears, which are taxpayers, awareness, criminal sanctions, and so on to improve the study

Налог на прибыль: проблема оптимизации и направления реализации

Налоговое планирование играет важную роль на эффективность деятельности компании. В этой связи важно учитывать риски при введении той или иной нормы налогового планирования. Большое количество компаний применяет незаконные способы налоговой оптимизации. Однако даже самые чистые методы налогового планирования могут вызывать споры. Налог на прибыль является одним из наиболее сложных и важных налогов компании. В статье рассматриваются основные законные способы оптимизации налогообложения, а также проблемы, которые могут быть связаны в связи с использованием того или иного метода оптимизации.Tax planning has a significant role on the efficiency of the company. In this regard, it is important to consider the risks with the introduction of one or another provision of tax planning. A large number of companies are resorting to illegal methods of tax optimization. However, even the purest methods of tax planning can be contentious. The income tax is one of the most difficult and important taxes of the company. The article discusses the main legal ways of optimization of the tax, as well as problems that can be associated in connection with the use of optimization methods