Catalogue Search | MBRL
Are you sure you want to remove the book from the shelf?
{{itemTitle}}
620,543
result(s) for
"Tax sales"
Sort by:
Attention Variation and Welfare
This article shows that accounting for variation in mistakes can be crucial for welfare analysis. Focusing on consumer under-reaction to not-fully-salient sales taxes, we show theoretically that the efficiency costs of taxation are amplified by differences in under-reaction across individuals and across tax rates. To empirically assess the importance of these issues, we implement an online shopping experiment in which 2,998 consumers purchase common household products, facing tax rates that vary in size and salience. We replicate prior findings that, on average, consumers under-react to non-salient sales taxes—consumers in our study react to existing sales taxes as if they were only 25% of their size. However, we find significant individual differences in this under-reaction, and accounting for this heterogeneity increases the efficiency cost of taxation estimates by at least 200%. Tripling existing sales tax rates nearly doubles consumers’ attention to taxes, and accounting for this endogeneity increases efficiency cost estimates by 336%. Our results provide new insights into the mechanisms and determinants of boundedly rational processing of not-fully-salient incentives, and our general approach provides a framework for robust behavioural welfare analysis.
Journal Article
The early impacts of the COVID-19 pandemic on business sales
COVID-19 led to a massive shutdown of businesses in the second quarter of 2020. Estimates from the Current Population Survey, for example, indicate that the number of active business owners dropped by 22% from February to April 2020. We provide the first analysis of losses in sales among the universe of businesses in California using administrative data from the California Department of Tax and Fee Administration. Losses in taxable sales average 17% in the second quarter of 2020 relative to the second quarter of 2019 even though year-over-year sales typically grow by 3-4%. We find that sales losses were largest in businesses affected by mandatory lockdowns such as accommodations, which lost 91%, whereas online sales grew by 180%. Placing business types into different categories based on whether they were considered essential or nonessential (and thus subject to early lockdowns) and whether they have a moderate or high level of person-to-person contact, we find interesting correlations between sales losses and COVID-19 cases per capita across counties in California. The results suggest that local implementation and enforcement of lockdown restrictions as safety measures for public health and voluntary behavioral responses as reactions to the perceived local COVID-19 spread both played a role.Plain English SummaryBusiness sales dropped by 17% on average due to the pandemic during the second quarter of 2020 in California. Accommodations lost 91% of sales, whereas online sales grew by 180%. Sales fell more steeply in counties with more COVID-19 cases. We examine how much businesses lost in sales using administrative sales tax data. The average losses of 17% in the second quarter of 2020 relative to the second quarter of 2019 occurred even though year-over-year sales typically grow by 3-4%. We find that sales losses were largest in businesses affected by mandatory lockdowns such as accommodations, drinking places, and arts, entertainment, and recreation. Distinguishing between essential and nonessential businesses, which were subject to early lockdowns, and by the level of person-to-person contact, we find that local implementation and enforcement of lockdown restrictions for public health safety and voluntary responses to the perceived local COVID-19 spread both played a role. The results suggest that small businesses may need more support from governments and consumers to mitigate the strong shift to online vendors, and that the pandemic must be brought under control as a prerequisite to a full recovery.
Journal Article
How relative marginal tax rates affect establishment entry at state borders
We apply border discontinuity analysis to measure the impact of marginal tax rates on capital income, property, sales, and income on establishment entry on either side of state borders. Establishments are more likely to enter on the side of the border with the lower marginal tax rates. The biggest differences in start-up rates are at borders with the largest tax rate differences, with property tax rate differences mattering most. We rank borders by the differences in start-ups due to tax structure, and we rank states by their distortionary tax structures. The greatest distortion in start-ups due to tax rates is at the Wyoming-Idaho border with an 8.6% lower probability of start-ups on the Idaho side. The most distortionary tax structure is Rhode Island’s at 14.2% lower probability of entry, but it is not as heavily disadvantaged at the border because its neighbor, Connecticut, has the third most distortionary tax structure.Plain English SummaryState tax rates affect start-ups at state borders. State taxes on property, sales, personal income, and corporate income affect the side of the border start-ups tend to select. A state with a one-point higher tax rate in each of the four taxes will have a 3.2% lower probability of a start-up than its neighboring state. Property taxes have the greatest adverse effect on start-ups because new firms must pay property taxes, even if they have no sales or income. The greatest distortion in start-ups due to tax rates is Wyoming’s 8.6% advantage compared to Idaho. Some states with the most distortionary tax structures are not disadvantaged at their borders because their neighbors also have high tax rates. Rhode Island has the most distortionary tax structure, but it is not as heavily disadvantaged at the border because its neighbor, Connecticut, has the third most distortionary tax structure.
Journal Article
Can Taxes Shape an Industry? Evidence from the Implementation of the \Amazon Tax\
For years, online retailers have maintained a price advantage over brick-and-mortar retailers by not collecting sales tax at the time of sale. Recently, several states have required that online retailer Amazon collect sales tax during checkout. Using transaction-level data, we document that households living in these states reduced their Amazon purchases by 9.4% following the implementation of the sales tax laws, implying elasticities of −1.2 to −1.4. The effect is stronger for large purchases, where purchases declined by 29.1%, corresponding to an elasticity of −3.9. Studying competitors in the electronics field, we find some evidence of substitution toward competing retailers.
Journal Article
Moderating role of patriotism on sales tax compliance among Jordanian SMEs
Purpose
The purpose of this paper is to investigate the impact of tax audit, tax rate and tax penalty on sales tax compliance and examine the moderating effect of patriotism on the associations between tax audit, tax rate and tax penalty with sales tax compliance among Jordanian manufacturing small- and medium-sized enterprises (SMEs).
Design/methodology/approach
In this study, 660 questionnaires were distributed by using systematic random sampling to manufacturing SMEs in Jordan, after which a total of 385 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS-SEM) was used to validate the measurement model and structural model and the predictive relevance of the study’s model.
Findings
The findings showed that tax audit and tax penalty were positively associated with the level of sales tax compliance, whereas tax rate was insignificantly associated with sales tax compliance. They also demonstrated the moderating significant effect of patriotism on the relationship between tax penalty, tax audit and tax rate with sales tax compliance.
Research limitations/implications
Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen eligible SMEs to comply to further boost their sales collections.
Originality/value
This study extends the deterrence theory in the context of sales tax compliance by proposing the moderating effect of patriotism in the deterrence theory on sales tax compliance among SMEs. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the extended deterrence theory with patriotism as a moderating variable as well as its implications for theory and practice was also discussed.
Journal Article
Policy Forum: How Canada Could Benefit from E-Invoicing for GST/HST Purposes
Dans cet article, l'auteur examine l'importance de la facturation électronique dans les systèmes de taxe sur la valeur ajoutée, tant du point de vue du gouvernement que des contribuables. La facturation électronique désigne l'adoption d'une norme exigeant que les entreprises établissent des factures comprenant les renseignements obligatoires sur la fourniture dans un format électronique prescrit, et les transmettent à l'administration fiscale en temps réel au moyen d'un système électronique donné. L'auteur analyse également le développement des systèmes de facturation électronique dans le monde, en commençant par les pionniers latino-américains, puis il aborde les expériences récentes en Europe. L'expérience en Amérique latine montre que les gouvernements peuvent tirer profit de la facturation électronique pour réduire la fraude fiscale et augmenter ainsi les recettes publiques, tandis que l'expérience en Europe montre que les entreprises ont leurs propres raisons de promouvoir la facturation électronique, notamment pour réduire les coûts de conformité. En conclusion, l'auteur propose des pistes pour intégrer la facturation électronique dans le système canadien de taxe sur les produits et services/taxe de vente harmonisée.
Journal Article
NEXUS TAX LAWS AND ECONOMIES OF DENSITY IN E-COMMERCE
We quantify the distortionary effects of nexus tax laws on Amazon’s distribution network investments between 1999 and 2018. We highlight the role of two features of the expansion of Amazon’s network: densification of the network of distribution facilities and vertical integration into package sortation. Densification results in a reduction in the cost of shipping orders, but comes at the expense of higher facility operating costs in more expensive areas and lower scale economies of processing shipments. Nexus laws furthermore generate additional sales tax liabilities as the network grows. Combining data on household spending across online and offline retailers with detailed data on Amazon’s distribution network, we quantify these trade-offs through a static model of demand and a dynamic model of investment. Our results suggest that Amazon’s expansion led to significant shipping cost savings and facilitated the realization of aggregate economies of scale. We find that abolishing nexus tax laws in favor of a non-discriminatory tax policy would induce the company to decentralize its network, lowering its shipping costs. Non-discriminatory taxation would also entail lower revenue, however, as tax-inclusive prices would rise, resulting in a fall in profit overall. This drop and the decline in consumer welfare from higher taxes together fall short of the increases in tax revenue and rival profit, suggesting that the abolishment of nexus laws would lead to an increase in total welfare.
Journal Article
Sales Taxes and Internet Commerce
We estimate the sensitivity of Internet retail purchasing to sales taxes using eBay data. Our first approach exploits the fact that a seller's location—and therefore the applicable tax rate—is revealed only after a buyer has expressed interest in an item. We document how adverse tax \"surprises\" reduce the likelihood of purchase and shift subsequent purchases toward out-of-state sellers. We then use more aggregated data to estimate that every one percentage point increase in a state's sales tax increases online purchases by state residents by almost 2 percent, while decreasing their online purchases from state retailers by 3-4 percent.
Journal Article
Do accounting earnings provide useful information for state tax revenue forecasts?
State tax revenue forecasting is critical to states’ fiscal planning because many states have constitutions or laws that require a balanced budget and restrict borrowing to fund deficits. We develop and compare four measures of aggregate corporate earnings growth. We find that a state-specific industry-weighted measure of earnings growth predicts future state tax revenue growth, incremental to states’ actual forecasts (i.e., it increases explanatory power by a factor of 1.86). Earnings growth also improves states’ component forecasts of personal income, sales, and corporate income tax revenues. We also find that both forecast errors and lagged earnings growth can explain midyear spending cuts, suggesting that there are real consequences to omitting earnings growth from tax revenue forecasts. Because accurate revenue forecasts are necessary for the efficient allocation of government resources, these findings should be useful to those who prepare, monitor, or are otherwise affected by state tax revenue forecasts and budgets.
Journal Article