Small business property tax reductions and job growth

Gobey, Matthew; Matikonis, Karolis

doi:10.1007/s11187-019-00219-9

Cited by 10 publications

(7 citation statements)

References 27 publications

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“…Papers in SBEJ have been integral in contributing to our knowledge base of small business taxation, in particular, its effects on entrepreneurship (Baliamoune-Lutz & Garello, 2014 ; Bennett, 2021 ; Bruce & Mohsin, 2006 ; Ferede, 2021 ; Venâncio et al, 2022 ) with findings indicating the detrimental impact of taxation, including to productivity (Romero-Jordán et al, 2020 ). Although this is generally supported by literature on tax incentives (Liu et al, 2019 ; Sterlacchini & Venturini, 2019 ; Venâncio et al, 2022 ), Gobey and Matikonis ( 2021 ) show that this is not the case for the UK, where they find that small business property tax reductions do not produce additional employment.…”

Section: Introductionmentioning

confidence: 74%

“…These tax reliefs (or subsidies) were first introduced in Scotland in 2003, England in 2005 and Wales in 2007. Initially, they were temporary reliefs, but these and subsequent deeper reductions have become permanent over time, despite little evidence that they have supported local business or growth (Gobey & Matikonis, 2021 ).…”

Section: Small Business Rate Reliefsmentioning

confidence: 99%

“…We calculate the precise individual firm level of reliefs, and this process is explained in Appendix 1. Furthermore, the differential in rates faced by small and larger businesses is widened by the partial funding of the reliefs through a higher rate (multiplier) on premises with a rateable value above the qualifying SBRR threshold, but this contribution has not kept pace with the scale of reliefs (Gobey & Matikonis, 2021 ).…”

Section: Small Business Rate Reliefsmentioning

confidence: 99%

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Small Business Property Tax Reductions and Firm Productivity

Matikonis

Gobey

2023

Small Bus Econ

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We investigate the productivity spillovers from the UK government’s decision to use extensive property tax reductions as a key instrument to stimulate innovation in smaller businesses and drive local growth. To capture the complex interaction and clustering of hierarchical effects, we apply non-parametric Random Effects Expectation Maximisation algorithm that complements more standard econometric estimators, namely matching to control for endogeneity and control functions to estimate total factor productivity. These approaches enabled us to incorporate various contextual configurations in comparing the recipients of these reductions to non-recipients with regard to productivity, in which the UK has experienced a considerably worse performance than its peers since the great recession. Contrary to policy assumptions and business community expectations, we show that generic tax reductions, when significant, are mostly associated with lower productivity and thus have been unsuitably chosen as a policy mechanism to stimulate productivity growth. We further show how instruments that are not built for causality could be beneficial for policy evaluation.

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Section: Introductionmentioning

confidence: 74%

Section: Small Business Rate Reliefsmentioning

confidence: 99%

Section: Small Business Rate Reliefsmentioning

confidence: 99%

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Small Business Property Tax Reductions and Firm Productivity

Matikonis

Gobey

2023

Small Bus Econ

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“…To increase the welfare of talent and stimulate talent innovation in the digital economy, salary for talented individuals is increased given the low proportion of after-tax income and low marginal utility of wages and salaries, which affects the incentive effect of talented individuals. A burden is laid on talent motivation in the digital economy [36]. In addition, it is not conducive to the expansion of employment and the placement of employment for digital economy enterprises.…”

Section: Increase Tax Incentives For Employment-related High-level Talentmentioning

confidence: 99%

The Effects of Tax Reduction and Fee Reduction Policies on the Digital Economy

Yang

2021

Sustainability

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The digital economy is the future of the world in terms of both contemporary trends and opportunities. Developing the digital economy is a practical way of strategically re-thinking network power and digital China and is the only way to achieve successful growth in countries’ development economies and seize a commanding position for future development. Tax reductions, which promote high-quality economic development and preserve the overall situation of national governance, are an important measure for all countries to cope with economic pressure. In recent years, China has successively introduced and continuously expanded a series of tax and fee reduction policies that have played an important role in stabilizing its economy and vigorously developing its digital economy. This study consists of six sections. The first section provides an overview of the digital economy, introducing its definitions and connotations as well as the significance of developments of the digital economy. The second section is a literature review of tax and fee reductions; the research results in this field for countries around the world are summarized based on the three perspectives of research objects, tax-reduction-policy effects and research methods and data. The third section describes the impact of tax reductions and fee reductions on China’s digital economy from an international perspective. Through the 2019 Forbes Global Top 100 Digital Economy List, this article analyzes the global digital economy corporate structure, observes the positive effects of tax and fee reductions on Chinese digital economy companies and compares the impact of tax cuts and fee reductions on digital economy companies in China, the United States and other countries. Stata software was used to conduct an empirical analysis on the panel data of digital economy companies from both macro and micro perspectives and Section 4 presents an evaluation of the policy effects of tax cuts and fee reductions on digital economy companies from multiple aspects. China does not have a systematic tax and fee reduction policy that is compatible with digital economy development and its investments in large digital economy companies can be increased, as discussed in Section 5. In Section 6, we recommend that China improves and optimizes its tax and fee policies to increase tax incentives for independent innovation and high-level talent.

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“…As a result, in the near future, local governments will become entirely dependent on local taxes for property and the business rather than subsidies. The results of research by Gobey and Matikonis (2019) and Asatryan, Baskaran, and Heinemann (2017) show that transferring the tax authority to the local level should ensure local budget revenues without applying state preferences. Consequences of decreased rate of the real estate tax for the small business indicate the higher dependence of local governments on the taxation of large corporations and restriction of the local autonomy.…”

Section: Literature Reviewmentioning

confidence: 99%

The effectiveness of financial and economic regulation of land relations in the context of stimulating entrepreneurial activity in the regions of Ukraine

Vatamanyuk-Zelinska

Melnychenko

2020

Problems and Perspectives in Management

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Solving the problem of enhancing the efficiency of the financial and economic regulation of land relations contributes to the development of entrepreneurship in Ukraine. The purpose of the paper is to determine new incentives for encouraging entrepreneurial activity by increasing the efficiency of the financial and economic regulation of land relations by local governments. The study is based on applying the method for predicting amounts of local budget revenues in Ukraine from the land tax and lease fees through the use of communally owned land plots to stimulate entrepreneurial initiatives of the unemployed. In the process of research, the projected amounts of local budget revenues from financial transactions with plots of industrial lands in each region of Ukraine have been determined, taking into account the possibilities of leasing the lands, for which lease fees are covered by a one-time benefit provided to the unemployed for organizing entrepreneurial activity. It is proposed to determine the efficiency of the financial and economic regulation of land relations in the regions of Ukraine, applying indicators such as the use of industrial lands together with objects of lease located on them and the involvement of the unemployed from among the economically active population in entrepreneurial activity. To improve the efficiency of financial and economic regulation of land relations, local governments are proposed to establish the optimal proportion of amounts of borrowed resources, taking into account the need for their saving and rational use.

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Small business property tax reductions and job growth

Cited by 10 publications

References 27 publications

Small Business Property Tax Reductions and Firm Productivity

Small Business Property Tax Reductions and Firm Productivity

The Effects of Tax Reduction and Fee Reduction Policies on the Digital Economy

The effectiveness of financial and economic regulation of land relations in the context of stimulating entrepreneurial activity in the regions of Ukraine

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