| The
Shadow Economy in OECD and EU Accession Countries The
Impact of Institutions, Liberalization, Taxation and Regulation
--
Dominik H Enste
Tax
evasion, illicit work and social security fraud are quite common. Most governments
try to fight this deviant behavior by punitive measures. But recent empirical
data for Germany reveals that, in contrast to standard economic theory, this line
of approach is expensive, inefficient and unsuccessful. Instead, governments have
to change institutions (e.g., tax system) and regulations. The regression analysis
shows that the increasing burden of taxation and social security contributions,
along with regulations and the poor quality of institutions are the elementary
causes for the rise of the shadow economy, especially in OECD countries. For transition
countries, multivariate analysis provides evidence for the significant influence
of corruption, economic freedom and the quality of institutions upon the size
of their shadow economies. ©
2006 IUP . All Rights Reserved.
A
Frontier Approach to Income Tax Revenue Efficiency in Select Indian States
-- Nitin
Kumar
The
study attempts to measure the income tax revenue efficiency of 17 major states
of India for the period 1989-90 to 2001-02, using a stochastic frontier approach,
such that the efficiency varies across both time and states. It is found that
inefficiency effects are certainly playing a highly significant role in the income
tax revenue collection for various Indian states over the years. The income tax
rate and exemption limit have a negative effect over income tax revenue, whereas
real personal income and tax base have a positive one on revenue. The determinants
of revenue inefficiency have also been found, among which literacy rate and economic
crimes appear to play a signicant role. Finally, it has also been checked whether
the inefficiency rankings of various states during the time period under analysis
show convergence. It is found that the null hypothesis of no association between
ranks of different years is decisively rejected implying that the poor performing
states are not improving over the years. ©
2006 IUP . All Rights Reserved.
Economic
Effects of Value Added Tax
-- R
Sthanumoorthy
The
article analyzes the effect of VAT on the macro-economic variables as savings,
investment, tax regressivity, consumption pattern, tax revenue and foreign trade.
VAT has the capacity to increase savings if it is substituted for part or all
of the income tax and this has been proved empirically. Although by design VAT
has regressive elements, in practice the regressivity of VAT depends on several
factors such as the consumption patterns of higher and lower income groups, taxes
replaced, the exemptions and zero ratings. The international evidences on regressivity
of VAT reveal a mixed picture. In general, VAT promotes investment if it replaces
distortionary taxes and earns more revenue to the government. Finally, VAT ensures
that international trade takes place on a transparent basis and avoids distortions
like tax cascading associated with alternative commodity taxes. ©
2006 IUP . All Rights Reserved.
Public
Finance in Transition Economies: How
Competitive are They?
-- Robert W McGee
This
article examines the relative tax burden of transition economies from a microeconomic
perspective. It employs data from the Tax Misery Index and the Index of Economic
Freedom to compare the tax burden of transition economies to that of more developed
market economies. It then creates a hybrid index, which provides a more representative
look at relative tax burdens from an investor's perspective. ©
2006 IUP . All Rights Reserved. | 
