The role of tax preparers in tax compliance

This paper assesses the influence of tax preparers on tax compliance. Using data from the Internal Revenue Service's (IRS) Taxpayer Compliance Measurement Program and an index of legal ambiguity based on Revenue Rulings, the impact of preparation mode (paid third party vs. self) on compliance at the level of the return line item is probed. The results suggest that preparers contribute to compliance by enforcing legally clear requirements but also contribute to noncompliance, as measured by the IRS, by helping taxpayers take advantage of legal ambiguity. Furthermore, an analysis of a campaign to enforce estimated tax requirements conducted by the Pennsylvania Department of Revenue suggests that tax preparers are also an important network for communicating tax agency enforcement priorities to taxpayers.An earlier version of this paper was prepared for the conference on Federal/State Research sponsored by the U.S. Internal Revenue Service.     

The real costs of tuition tax credits

Calculations of the costs of tuition tax credits should include estimates of the induced migration from public to private schools. The estimate by the President's advisors that his 1983 tax credit proposal would cost up to $800 million by 1986 neglected the migration factor. It is demonstrated that a migration from public to private schools of about from 1 to 1.4% of the present public school enrollment is all that is necessary to secure savings from migrants that just offset the loss in federal tax revenue from tax credits granted to incumbent private school families. Greater migration will generate net revenue gains to governments as a whole.     

The attitudinal consequences of the tax revolt

This paper attempts to assess the strength and direction of the attitudinal consequences of the tax revolt. An initial taxonomy of potential attitudinal effects is developed in the first section via a brief examination of the attitude-based explanations of the revolt. Those effect hypotheses are then tested via a pretest-posttest comparison group design analysis of 1976, 1978, and 1980 American National Election Study data. The results of those tests are discussed in the final section.     

The puzzle of Dutch welfare state retrenchment

In the literature on welfare state retrenchment and in the general emphasis on the resilience of welfare states, the Dutch case appears puzzling by virtue of the fact that significant retrenchments have actually taken place in the Netherlands. It appears even more puzzling considering that the arguments in this literature as to the difficulties in welfare state retrenchments apply very well to this case, whereas the arguments as to why after all welfare state retrenchments are possible do not apply particularly well. This article argues that the explanation for the Dutch puzzle should be found in Dutch politics. Due to the power of the CDA as a pivotal centre party, the PvdA was at an early stage forced to accept welfare state retrenchment. A party consensus thus emerged allowing Dutch governments to define the issue of welfare state retrenchment as a matter of economic necessity.     

The Danish welfare state under bourgeois reign

From 1982 to 1993, a decade of tight economic constraints, the Danish welfare state was governed by bourgeois parties. The expectation of the power resources model, the most prevalent theory about the Scandinavian welfare states, was that the Danish welfare state would be turned further in a residual direction. Those expectations were, however, never fulfilled – on the contrary, the Danish welfare state was further expanded in a social democratic direction. A focus on how the bourgeois governments, often in a difficult parliamentary situation, tried to adapt the popular Danish welfare state to less favorable economic conditions accounts for important aspects of this development. The bourgeois governments relied on a combination of increased benefits to large groups of voters and well-hidden measures to strengthen public finances.     

Do welfare benefits cause the welfare caseload?

Analyses of the welfare system generally examine one of five competing models: (1) The work disincentive model; (2) the human capital model; (3) the macroeconomic model; (4) the public choice model; or (5) the cost-of-job-loss model. This paper employs the Granger causality concept and the multiple-rank F statistic to test the implications of all five of these models simultaneously. The results offer modest support to all but the macroeconomic model. The relationships among welfare benefits, caseloads, and labor market conditions appear to be too complex to be fully captured by a single model.