Macroeconomic Implications of Changes in Corporate Tax Rates: A Review

Mukherjee, Sacchidananda; Badola, Shivani

doi:10.1111/1467-8462.12497

Cited by 2 publications

(1 citation statement)

References 88 publications

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“…Finocchiaro andRizzo (2014) andPapanikolaou (2021), through econometrics, showed that when people are in a condition of inequity, they are significantly more likely to evade taxes than in conditions of equity. Murphy, Chistensen, and Kimmis (2005); Bachas, Gadenne, and Jensen (2020)and Mukherjee and Badola (2023) consider that tax justice is a primary factor for the state to obtain income from taxes. Pérez (2014) estimates that through an increase in horizontal equity, it is possible to improve collection efficiency.…”

Section: Literature Reviewmentioning

confidence: 99%

Tax progressivity and its influence on tax collection levels in Mexico, 1992-2016

Delfin-Ortega,

Navarro-Chavez,

Sepulveda

2024

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This study aims to examine the impact of income tax and VAT progressivity on Mexico’s tax collection. In Mexico, tax collection has persistently remained at notably low levels, attributed in part to the perceived inequity within the tax system. Initially, we compute the progressivity of income tax and VAT to ascertain the average percentage increase in these taxes relative to a 100% rise in income. Results indicate income tax's progressive nature, contrasting with VAT's regressive pattern. Subsequently, employing a time-series model, we analyze the influence of income tax and VAT progressivity on tax collection. Our findings reveal a positive correlation between fiscal progressiveness and tax collection levels over both short and long terms. These findings offer practical implications, suggesting that leveraging the insights from this research could fortify tax policies, thereby enhancing tax revenues and contributing to improved income distribution. The analysis underscores the importance of considering the level of progressivity in income tax and VAT rates for enhancing tax collection in Mexico. By leveraging progressive taxation policies, policymakers can potentially boost tax revenues while promoting a more equitable distribution of income. Furthermore, an increase in tax collection can potentially support public programs and services benefiting society as a whole, thus enhancing overall welfare.

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Section: Literature Reviewmentioning

confidence: 99%

Tax progressivity and its influence on tax collection levels in Mexico, 1992-2016

Delfin-Ortega,

Navarro-Chavez,

Sepulveda

2024

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Commodity Price and Indonesian Fiscal Policy: An SVAR Analysis with Non-Gaussian Errors

Mansur

2024

Journal of Time Series Econometrics

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This study exploits the non-Gaussianity for identification of a Bayesian SVAR model on newly unexplored monthly Indonesian data from 2007M1–2022M12, where we disentangle the commodity-related revenue from the total government revenues. Our main contribution is in labeling the statistically identified structural shocks as economic shocks by conducting a formal assessment of a set of proposed sign constraints. We simultaneously label a commodity price and three fiscal policy shocks, i.e. fiscal income tax, investment-spending, and consumption-spending shocks. Having evaluated their impacts, among the fiscal policy shocks, we find income tax shock the most impactful on output. Moreover, during the Covid crisis 2020–2021, the launched fiscal economic stimulus package (PEN program) positively contributed to the output. The recession of the Covid crisis could have deepened had the fiscal policymaker not responded at all. Albeit so, we should not overlook the contribution of the rising commodity prices to the output recovery. We also evaluate the commodity boom period in 2007–2009, the tax amnesty program in 2016–2017 and 2022, and the infrastructure spending boost in 2015. Our results suggest that output and retail sales would have been lower without the commodity price shock’s contribution during the commodity boom. Then, we find that tax amnesty and infrastructure spending boost policies contribute to higher retail sales.

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Macroeconomic Implications of Changes in Corporate Tax Rates: A Review

Cited by 2 publications

References 88 publications

Tax progressivity and its influence on tax collection levels in Mexico, 1992-2016

Tax progressivity and its influence on tax collection levels in Mexico, 1992-2016

Commodity Price and Indonesian Fiscal Policy: An SVAR Analysis with Non-Gaussian Errors

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