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Orientation South Africa is a country where the vast majority of residents experience inequality, poverty and deprivation on a daily basis. For many black South Africans, their experience includes the expectation to financially support extended family. Research purpose This 'black tax' provides the government with an opportunity to redistribute wealth through taxation provisions. The study's purpose is to consider whether South African taxation legislation currently provides for black tax and if not, to provide suggested improvements. Motivation for the study Whilst South Africa already has a social grant system in place, there is a need to account for varying levels of taxpayer responsibility and to encourage less dependence on the government. Research approach/design and method Using a doctrinal research methodology, the authors collated relevant legislation and judicial precedents applied in South Africa with respect to supporting extended family and compared these to the taxation systems in the United States of America (USA), Brazil and Nigeria. Main findings The findings indicate that the current South African taxation legislation does not provide for supporting extended family, including black tax, and the US dependent exemption or rebate is a potential option for consideration in South Africa. Practical/managerial implications Taxpayers should encourage the South African government to develop a discussion document to encourage wider discourse. Contribution/value-add The study makes an important contribution to the debate on changing taxation legislation to ensure income and wealth redistribution.

How much are people willing to forego to be honest, to follow the rules? When people do break the rules, what can standard data sources tell us about their behavior? Standard economic models of crime typically assume that individuals are indifferent to dishonesty, so that they will cheat or lie as long as the expected pecuniary benefits exceed the expected costs of being caught and punished. We investigate this presumption by studying the response to a change in tax reporting rules that made it much more difficult for taxpayers to evade taxes by inappropriately claiming additional dependents. The policy reform induced a substantial reduction in the number of dependents claimed, which indicates that many filers had been cheating before the reform. Yet, the number of filers who availed themselves of this evasion opportunity is dwarfed by the number of filers who passed up substantial tax savings by not claiming extra dependents. By declining the opportunity to cheat, these taxpayers reveal information about their willingness to pay to be honest. In our analysis, we develop a novel method for inferring the characteristics of taxpayers in the absence of audit data. Our findings indicate both that this willingness to pay to be honest is large on average and that it varies significantly across the population of taxpayers.

A 2010 national policy change due to the Affordable Care Act allowed dependent children to remain on parental health insurance policies until age 26. Evidence shows the mandate increased insurance coverage among affected young adults and also increased premiums for family health insurance policies. In this paper, we investigate the use of dependent tax exemptions as a mechanism families could use to pay for increased costs associated with expanded coverage. Using data on households from the Medical Expenditure Panel Survey, we use a difference-in-difference methodology comparing changes in the likelihood of being claimed as a dependent on a tax return for the 19–25 year olds affected by the coverage mandate compared to 16–18 year olds that were unaffected. We find a significant increase in dependent tax exemptions among 19–25 year olds following implementation of the dependent coverage mandate. Family income gains from switching an exemption from a young adult child to the parent would shift a substantial portion of young adult insurance coverage costs (ultimately medical costs) to other taxpayers. Though we point to family health insurance cost as a likely driver of the increased dependent tax exemptions, we cannot rule out a role for other outcomes also affected by the mandate, including labor market changes among 19–25 year olds. We further compare the overall social costs and benefits of the mandate and show that absent significant health improvement to date, welfare gains likely depend on the positive contribution of young adults to insurance pools in terms of lower average costs.

This study examines the effects of the interaction of a size-dependent tax policy that exempts firms whose stated capital is at or below a certain threshold from taxation and financial frictions on firm growth and financing. Our empirical findings can be summarized as follows: First, firms with lower productivity, a positive potential tax benefit, and smaller stated capital are more likely to conduct the cash-out capital reduction to or below the threshold in response to the policy. Second, this capital reduction causes ex-post lower firm growth and fewer debt. Third, such causal effects are observed for firms with less cash flow ratios. These results indicate that the interaction between a size-dependent tax policy and financial constraints deters firm growth.Plain English SummaryThe interaction of a size-dependent tax policy that exempts firms whose stated capital is at or below a certain threshold from taxation and financial frictions deters firm growth. We use the introduction of the pro forma standard taxation system in Japan that exempts firms (SMEs), whose stated capital is at or below a threshold, from taxation to empirically examine how firms react to this institutional change and how such a reaction systematically affects their financing and real outcomes. We show that size-dependent tax policies can have a significant effect on firms’ growth and financing through financial constraints. It indicates that firms decide whether to obtain an SME status by considering the trade-off between a more severe borrowing constraint and a smaller tax payment. The results obtained in this study indicate that such indirect effects of a size-dependent tax policy on firm dynamics should be considered when designing the policy. Moreover, governments should understand that an institutional change in their tax systems generates a heterogeneous reaction from firms and thus has heterogeneous effects on their dynamics.

This paper examines the changes in vertical equity across different types of tax filing families during the span of a series of drastic personal income tax reforms in Taiwan. The newly enacted 2016 Taxpayer Rights Protection Act has brought unprecedented challenges to the tax authority’s distributional goal and revenue stability. Utilizing the administrative tax return data collected by the Ministry of Finance’s Fiscal Information Agency between 2016 and 2018, we show that while the income tax has contributed to improving equality in income distribution, the effects, however, were limited and even declined slightly in recent years. We also found that distributions of tax benefits are generally regressive, especially among itemized and special deductions. It is also shown that the personal exemption and the adjustments of basic living expenses provided comparably more relief to households with dependents than to those claiming no dependents. According to our two-parameter metric encompassing the usage rates and the tax-benefit distributions for each deduction, we found that itemized deductions and special deductions, in general, are regressive. Specifically, we calculate and compare different representative families’ tax payments before and after the reform. While the tax reform has helped reduce many tax-filing families’ tax liabilities, most tax benefits generated from the expansion of exemptions and deductions would likely be enjoyed by families with higher incomes. In a broader reform-minded context, the analysis cautions the tax authority in Taiwan and equity pursuing policy makers in other countries not to prioritize an overarching short-term equity goal over long-term revenue stabilization. Phasing out or capping some of the itemized deductions such as donations and special deductions related to discretionary purchasing decisions looks to be a promising reform path toward improving equity and restoring revenue stability.

Personal bankruptcy exempt property refers to the property retained to ensure future survival and development to safeguard the basic life, career development, and other rights and interests of the debtor and dependents. It is a strong solution to the problems of the right to survival and development of the honest but unfortunate debtor, among other things. This thesis handles the Personal Bankruptcy Regulations of Shenzhen, the personal bankruptcy judicial documents, and judicial cases issued by the courts as samples and comprehensively analyzes the problems in the judicial practice of exempting property from personal bankruptcy in China. It innovatively proposes that the scope of recognition of exempted property adopts “inflation as the main approach” and sets up exceptions to protect the interests of creditors and debtors through the principle of “balance of interests”; Construct a recognition standard that “only specifies the types of property” and sets regional limits, protecting and limiting the rights of debtors under the principle of moderate protection; Implement the construction model of exemption property that combines “enumeration” and “generalization”, and under the guidance of the “flexibility principle”, establish a scope of exemption property that is in line with China’s national conditions. This study provides a new sample for international comparative research on the system of personal bankruptcy exempt property. It gives a new direction for exploring the judicial recognition of personal bankruptcy exempt property in China.

The county-to-county migration data of the Internal Revenue Service's (IRS) is an incredible resource for understanding migration in the United States. Produced annually since 1990 in conjunction with the US Census Bureau, the IRS migration data represents 95% to 98% of the tax-filing universe and their dependents, making the IRS migration data one of the largest sources of migration data. However, any analysis using the IRS migration data must process at least seven legacy formats of this public data across more than 2000 data files--a serious burden for migration scholars. To produce a single, fiat data file containing complete county-to-county IRS migration flow data and to make the computer code to process the migration data freely available. This paper uses R to process more than 2,000 IRS migration files into a single, flat data file for use in migration research.

Kajian ini bertujuan menganalisis perbezaan jumlah bayaran zakat pendapatan individu berdasarkan had kifayah perbelanjaan keperluan asasi hidup (PKA) yang ditetapkan dalam pengiraan zakat pendapatan di Malaysia. Ketidakseragaman PKA menyebabkan jumlah zakat pendapatan berbeza walaupun pembayar memiliki pendapatan dan perbelanjaan yang sama. Sehubungan itu, maklumat jenis dan kadar PKA di setiap negeri dianalisis secara kualitatif untuk memahami bentuk ketidakseragaman tersebut. Selanjutnya, pengiraan zakat pendapatan dengan andaian pembayar mempunyai pendapatan dan perbelanjaan yang sama dilaksana secara simulasi berbantukan kalkulator zakat atas talian setiap Majlis Agama Islam Negeri. Hasil penelitian PKA menunjukkan terdapat persamaan dan perbezaan berkaitan jenis dan kadar yang digunakan. Perbelanjaan untuk diri sendiri, isteri dan anak merupakan antara senarai perbelanjaan yang digunakan oleh semua negeri dalam pengiraan zakat pendapatan. Namun demikian, pengkategorian lebih terperinci untuk perbelanjaan isteri dan anak dengan kadar yang berbeza, dan amalan beberapa jenis perbelanjaan baharu yang hanya diamalkan di beberapa buah negeri sahaja seperti rawatan kronik, tanggungan kurang upaya dan ansuran kenderaan dan rumah memberi kesan terhadap pengiraan jumlah zakat pendapatan individu. Kesan ketidakseragaman PKA melalui analisis simulasi menunjukkan jumlah bayaran zakat pendapatan individu paling kecil adalah di Perlis, manakala bayaran zakat paling tinggi pula di Kedah. Oleh yang demikian, kajian ini mendapati ketidakseragaman jenis dan kadar di dalam PKA boleh menyebabkan berlaku pembayaran zakat merentasi negeri secara meluas. Implikasi daripada kajian ini menunjukkan bahawa perbezaan jenis PKA khususnya antara negeri memerlukan satu penelitian semula. Kewajaran untuk mempertimbangkan jenis PKA adalah penting bagi memberikan kesamarataan kepada pembayar dan penerima zakat sebagaimana jenis pelepasan yang diamalkan dalam sistem percukaian.

Federal programs for children are under increasing budgetary pressure. According to current federal law or any budget alternative being offered by the president or congressional leaders, spending on children would decline as a share of the budget and of the national economy. This article summarizes past, current, and projected budgets for children's programs. It traces significant historical expansions of means-tested programs, such as the Supplemental Nutrition Assistance Program; depicts fairly significant declines in more universal supports, such as the income tax exemption for dependents; and shows the future squeeze on children's programs brought about by automatic growth in health, retirement, and tax subsidy programs, along with the failure of revenues to keep pace with the overall growth in spending. Federal programs for health care have been a mixed blessing for children: Medicaid has grown to be the largest federal support for children, but overall federal health care costs eat away at the share of the budgetary pie left for anything else.

[...]of the Tax Cuts and Jobs Act, the child tax credit phaseout begins for single taxpayers at $200,000 of adjusted gross income starting in 2018.[...]Temporary Regulations section 1.152-4T was issued, and the manner and form required included the following: * the name of the child; * the name and Social Security Number of the noncustodial parent; * the Social Security Number of the custodial parent; * the signature of the custodial parent and the date signed; and * the tax year (or tax years) that the right to exemption would be released.[...]adequate and contemporaneous documentation should be maintained as to where the child spends each night.[...]there was a strong dissenting opinion issued with Armstrong, as this author would like to note. 66.Swint, 142 T.C. 131.