Tax Competition and Tax Coordination in a Median Voter Model

This paper analyzes the welfare effects of capital tax coordination in a simple model of fiscal competition where fiscal policy is subject to majority voting and households differ with respect to their labor and capital income. It turns out that a coordinated capital tax increase may raise or reduce welfare, depending on the relative magnitude of i) economic distortions induced by a labor tax and ii) political distortions resulting from the influence of the median voter on fiscal policy decisions. A negative welfare effect is more likely, the smaller the marginal excess burden of the labor tax and the smaller the ratio of the median voter's labor income to average labor income. We also use empirical estimates of the marginal excess burden of taxation to determine the welfare effects of tax coordination; it turns out that a negative welfare effect of coordinated tax increases may emerge in our model for empirically reasonable parameters.     

State income taxation with mobile labor

The ability of state and local governments to use tax and other fiscal policies to redistribute income may be limited when labor is mobile. An analysis of the allocative and distributional effects of a state income tax shows that, by driving out taxed households, the burden of the tax may be shifted to immobile households and other owners of immobile factors of production and may impose an excess burden on them. The NBER TAXSIM model is used to calculate state income tax burdens for representative high-income households in 1986–1988. Further calculations based on assumed demand elasticities for labor indicate that if high-income households are mobile, the marginal excess burden of income taxes imposed on them may be of substantial size in certain states, especially among the highest income groups.     

Government Size and Unemployment: Evidence from Industrial Countries

Using data from 19 industrial countries for the period 1985 to 2002, this paper analyzes how the size of the government sector affects unemployment. Controlling for the impact of the business cycle as well as for the impact of all major labor market institutions and unobserved country effects, we find that a large government sector is likely to increase unemployment. It appears to have a particularly detrimental effect on women and the low skilled and to substantially increase long-term unemployment. It seems that dominant stateowned enterprises, a large share of public investment in total investment as well as high top marginal income tax rates and low income threshold levels at which they apply are particularly detrimental.     

Examining the Use of Informal Networks by NGOs in Azerbaijan and Georgia

Abstract

The aim of this article is to investigate whether and to what extent changes in the structural preconditions for volunteering have had an effect on the relative importance of ‘classic predictors’ of volunteering within two areas: (1) socio-economic and status variables that function as resources for civic engagement and (2) value orientations that guide volunteering. Arguably, upward changes in the level of human capital, such as education, or changes in values that put more emphasis on, for example, social responsibility, could be expected to lead to an increase in the relative importance of these variables because the groups who possess such resources or express such attitudes would be more likely to enter into the volunteer labour force. If this is the case, then we would expect to see increasing differences in the likelihood of volunteering between high- and low-status groups. On the other hand, it could be argued that it is the distribution and diffusion of such resources and values that matter. If, for instance, education has become more widespread and covers larger proportions of the population, it is also possible that the relative importance of education has diminished. In this case, we would see a mainstreaming effect on volunteering because this activity becomes more normal, independent of class and status. Finally, it is also possible that volunteering is relatively resistant to wider structural changes in society or at least experience a time lag in the effect of such changes. Based on an empirical analysis of Danish survey data from 1990 to 2008, we argue that the idea of a mainstreaming effect should be taken seriously.     

Soldiers to Citizens: The Link between Military Service and Volunteering

Research shows that military service is linked with political engagement, such as voting. This connection is strongest for minorities. The authors explore the relationship between military service and volunteering. They conclude that military service helps overcome barriers to volunteering by socializing people with civic responsibility norms, by providing social resources and skills that compensate for the lack of personal resources, and by making veterans aware of opportunities to volunteer as well as asking them to do so. Military service is positively related to volunteering among blacks and Hispanics. Married veterans are more likely to volunteer than nonveterans. Veterans who served during wartime are more likely to volunteer than those who served in peacetime.     

The effects of welfare reform on the academic performance of children in low‐income households

During the 1990s, U.S. welfare policy underwent dramatic reforms aimed at promoting employment and reducing dependence. Although the immediate effects on adult labor supply and family income have been studied extensively, this paper is the first to evaluate the long‐run effects on children's well‐being. Using a decade of national math achievement data and controlling for contemporaneous changes in education policy and environment, we associate welfare reform with relative test score improvements for low‐income students. Greater gains occur in states with larger initial welfare caseloads and larger caseload reductions.© 2009 by the Association for Public Policy Analysis and Management.     

Tax Code Knowledge and Behavioral Responses Among EITC Recipients: Policy Insights from Qualitative Data

We build on the robust quantitative literature on behavioral responses to the Earned Income Tax Credit (EITC) by using in‐depth qualitative interviews with 115 EITC recipients to examine how they understand and respond to its incentive structures regarding earnings, marriage, and childbearing. We find that respondents consider their tax refund as a whole, without differentiating the portion from the EITC; as a result, they cannot predict how their EITC refund would change if they altered their labor supply or marital status. Incentives for childbearing are better understood, but are not specific to the EITC; rather, parents respond to a combination of tax deductions and credits as a whole. Respondents would like to maximize their refunds, but most cannot or would not alter their behavior due to structural constraints they face in the labor and marriage markets. Rather than adjust work hours, defer marriage, or have additional children, respondents exhibit a different type of behavioral response to the incentive structure of the EITC: They alter their tax filing status in order to maximize their refunds. They routinely claim zero exemptions and deductions on their W‐4s, file their tax returns as head of household rather than as married, and divide children among the tax returns of multiple caregivers. Although some of these behaviors qualify as tax noncompliance, they emerge because the intricacies of the tax code conflict with the complexity and fluidity of finances and family life in low‐income households.     

青年志愿者行为动机的实证研究——以山东省高校学生为例

青年志愿者作为志愿者群体的中坚力量,在推动经济社会发展中发挥着重要作用。青年参与志愿服务是由其动机支配的,不同志愿者具有不同的行为动机。本文借鉴国内外学者的研究成果,以山东省高校学生为对象,对影响大学生志愿者行为动机的因素进行了实证分析。结果发现,利他主义思想、政治面貌、年龄、学历、家庭成员和社会关系等因素对高校学生成为志愿者具有显著影响。     

Easy Money: Tax Exporting and State Support for Higher Education

There is a substantial literature that assesses the effects of tax‐exporting capacities on the tax structures and aggregate spending levels that state governments choose to implement, but no work exists that isolates the effects of state tax exporting on higher education spending. Using state‐level data for 1989, 1995, 2002, and 2007, we estimate for the median voter in each state the change in the marginal cost of higher education subsidization generated by tax exportation, and calculate the increased higher education spending that results. We consider three types of spending: state appropriations to public universities as well as need‐ and non‐need‐based aid awarded to in‐state students. We find that neither type of aid is responsive to the marginal cost, or tax price, faced by the median voter. However, the median voter's price elasticity of demand for state appropriations is statistically significant and negative. We find that the median voter's tax price is substantially reduced by the presence of prominent mining and tourism industries and by the federal deductibility offset available to firms. Thus, these tax‐exporting capacities exert upward pressure on voter demand for state appropriations to public universities.     

The Effect of Media on Charitable Giving and Volunteering: Evidence from the “Give Five” Campaign

Fundraising campaigns advertised via mass media are common. To what extent such campaigns affect charitable behavior is mostly unknown, however. Using giving and volunteering surveys conducted biennially from 1988 to 1996, I investigate the effect of a national fundraising campaign, “Give Five,” on charitable giving and volunteering patterns. The widely advertised Give Five campaign was aimed to encourage people to give 5 percent of their income and volunteer 5 hours a week. After controlling for selection into being informed about the Give Five, I find that people who were informed about the campaign increased their weekly volunteering activity on average by almost half an hour, but their giving behavior was not significantly affected. I discuss the policy implications associated with this result and argue that although the Give Five campaign did not achieve its goal, its impact on volunteering was considerable. © 2012 by the Association for Public Policy Analysis and Management.     

Repairing the safety net: Is the EITC the right patch?

Using data from the Michigan Panel Study of Income Dynamics, this article estimates the impact of the Earned Income Tax Credit (EITC) on economic risk. Risk is measured through the variance of full income (income holding labor supply constant). The results show that the EITC significantly reduces economic risk, but its effects are weaker dollar for dollar than traditional means-tested programs like Food Stamps. The difference is not statistically significant, however. Moreover, for many middle-class people, the risk-reduction benefits of the EITC exceed the tax burden it imposes. This is less true of means-tested transfers. These results are significant for the politics of antipoverty policy. They show that a real-world antipoverty program can generate enough middle-class economic security to build for itself a solid base of political support.     

How fair? Changes in federal income taxation and the distribution of income, 1978 to 1998

In this paper, we determine how tax law and income distribution changes have separately contributed to the changes in tax progressivity over time, and also how a specific pre‐tax distribution of income affects the equalizing ability of a given tax change. We use information from the Current Population Survey for years that follow immediately after significant tax law changes or after the full enactment of these changes to measure the effect of income taxes on income distribution for selected years over the period 1978 to 1998. We find that, even when account is taken of the induced effect of changes in federal income tax laws on pre‐tax income, the individual income tax structure has been less successful in equalizing after‐tax income since the 1980s and into the early 1990s. We also find that a given tax law's equalizing effect on the distribution of income is significantly affected by the pre‐tax distribution of income. © 2005 by the Association for Public Policy Analysis and Management.     

Incentives,challenges, and dilemmas of TANF: A case study

This paper compares the incentives inherent in TANF (Temporary Assistance for Needy Families), the U.S. welfare system in place after the 1996 reforms, with those of TANF's predecessor, AFDC (Aid to Families with Dependent Children), using the experience in one state, Wisconsin, as an example. Is the new program successful in avoiding the “poverty trap” of the old welfare system, in which the marginal tax rates imposed on earnings and benefits were so high that they discouraged work effort outside a narrow earnings range? As women receiving assistance begin working more hours and earning more, income‐conditioned benefits (Food Stamps, EITC, Medicaid, and subsidies for child care) are reduced and withdrawn, in effect constituting a “tax” on earnings. Under TANF, there is more support for these families, at least in Wisconsin, and so economic well‐being should be higher for most women with earning in this range than it was under AFDC. But marginal tax rates under TANF remain high, and in some income ranges they are higher than under AFDC. Once in the work force, former TANF recipients have earnings over the long run that expose them to very high marginal tax rates, which decrease the benefits of working harder and make it very difficult to gain full eonomic independence. Evidence from other sources suggest that most low‐skilled women have earnings in the same range and so are likely to face similar reductions in benefits such as child care subsidies or the EITC as their earnings increase, even if they are not receiving welfare‐related benefits. © 2002 by the Association for Public Policy Analysis and Management.     

The Blizzard of 1987: A Year of Tax Reform Activity in the States

The year 1987 was the most active one in terms of state taxreform activity within recent memory. Most states respondedto federal tax reform not only by conforming their income taxesto the new federal provisions but also by such actions as increasingtheir personal exemptions or credits, raising their standarddeductions, and/or reducing marginal tax rates. The net resultof these changes was to increase the progressivity of stateincome taxes. The most important development affecting othertaxes was Florida's ultimately failed attempt to expand thesales tax to a broad range of services. Most states did notreform their corporation income tax, but that tax may receivemore attention in the next few years. Despite the high levelof activity 1987 and the formidable obstacles to accomplishingsignificant tax reform, 1987 will probably be seen in retrospectas the beginning of a major period of state tax reform extendinginto the early 1990s.     

The Impact of Earnings Disregards on the Behavior of Low‐Income Families

This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full‐time and still receive substantial welfare benefits), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because surprisingly few women used the earnings disregards. We discuss several explanations for why this might occur.     

The convergence of fiscal regimes and the decline of the Tiebout effect

A measure of waste from the competitive rent-seeking activity of special interest groups in federal, state and local budgets was calculated over the period 1900–88. This period in U.S. fiscal history is characterized by constitutional changes that have made for more transparency in governmental fiscal activities and for greater diffusion of taxes. The XVI Amendment to the Constitution created the progressive individual income tax (the corporate income tax was judged to be an excise tax in 1909 and passed the test of constitutionality). High marginal tax rates are a justification for a high average level of taxation. The Full Employment Act of 1946 insitutionalized government deficits as a means of meeting a political objective. As a result, opportunities for rent-seeking through budgetary reallocations rose in the United States. In the first two decades of the 20th century, waste at all levels of government represented about 10 percent of incremental national output. Today, waste is three times that amount.The transparency and diffusion of taxes are highest at the federal level and least at the local level. Rent-seeking through budgetary reallocation has followed the public purse. One explanation for the observed centralization of government in the 20th century may be that opportunities to concentrate benefits and diffuse taxes are highest at the federal level.     

Tax exporting,federal deductibility,and state tax structure

This paper studies the interaction between the federal and state tax systems during the 1980s and, in particular, considers how the Tax Reform Act of 1986 affected state tax structure. Using a panel data set on state governments over a nine-year period, I estimate tax share equations for six categories of taxes. I find that the state personal income tax is sensitive to changes in its tax price, but find a much smaller sensitivity to changes in tax prices for the general sales tax. I then consider various reasons why the sales tax does not exhibit a sensitivity to changes in tax price and consider the implications of these results for policymakers. The regression results suggest that different income groups are concerned with different tax instruments. Moreover, the results motivate a possible benefit approach to taxation at the state level. Linking taxes, about which a particular income group is most concerned, to services received by that group might generate additional political support for state tax systems during a time when many states are facing fiscal crisis.     

Volunteer care workers: A case for challenging resource theories on volunteering

This paper challenges prevailing theories on volunteering which explain participation in volunteer work by the high capital resources of individuals (resource theories). Using care theory and focusing on volunteers working with the frail elderly, the sick and the dying, we ask whether resource theory is a suitable theoretical framework for this particular kind of unpaid work. With a 2012 Danish population survey, we find that care volunteering attracts lower-resourced individuals who are predominantly female. We use this finding to argue that resource theory is unhelpful in explaining this particular form of volunteering and to call for more theory development.     

Trusting,Happy, Religious,and Giving: Explaining Volunteering in the Context of Nordic Exceptionalism

Abstract

Using data from the European Values Study, this article examines the mechanisms through which social capital facilitates volunteering in Nordic countries. Three specific mechanisms are examined as drivers of volunteering: Generalized trust, subjective well-being, and religious activity. We find that trust bridges social capital and that people volunteer more as their level of generalized and institutional trust increases. Our results also indicate that individuals with higher levels of well-being and those who attend religious services regularly are more likely to volunteer.     

The political trend in local government tax setting

Previous fiscal studies have paid little attention to the effects of social interaction on local tax setting. This paper seeks to fill this gap by developing a theoretical model in which politicians belonging to the same party interact with each other in order to draw inferences about ideology. This phenomenon produces a mimic effect which is called the political trend. The results of the analysis show that the political trend gives rise to higher income tax rates and to tax mimicking at the local government level. The framework developed also makes it possible to discriminate between Leviathan-type and welfarist-type politicians. The results show that the former are more sensitive than the latter to changes in the average income tax rate of their peers. Moreover, Leviathan-type politicians are less sensitive than benevolent ones to changes in the central government’s income tax rate.