Glenn P. Jenkins

The Public-Sector Discount Rate for Canada: Some Further Observations

The increased interest by economists in the theoretical and empirical foundations of criteria to be used in making public-sector investment decisions in an encouraging development. Presently, as the federal government and several provinces are experiencing serious budgetary deficits while simultaneously facing demands to undertake a wide variety of major investment expenditures in areas such as energy supply and transportation, the determination of the empirical magnitude of the opportunity cost of the resources the public sector utilizes is an important topic in public policy research. The papers by Harry Campbell (1981) and David Burgess (1981) contribute to this discussion as does a previous comment by M. T. Sumner (1980); however, only a modest effort has been made to date to further the basic empirical research that is required to provide decision makers with improved estimates of this parameter.

Is the Value Added Tax Naturally Progressive

A broad based consumption tax, such as a value added tax, is generally considered to be a regressive tax. This conclusion, however, has not taken into account the fact that in developing countries the commodities on which poor households spend most of their income, even if they are included in the legal tax base, are administratively impractical to tax. This paper employs a rich data set on household incomes and expenditures for the Dominican Republic. The data set covers 2042 goods and services purchased by households of different income and consumption levels. It also contains information on the type of establishment from which the items were purchased. With this information we estimate the effective rate of tax that has been paid on each item purchased by households. These estimations include the effect of the different rates of the tax compliance across households with different expenditure levels. The results of the study show that the burden of the current VAT in the Dominican Republic is progressive over all the quintiles of household expenditure. Furthermore, if the base of the VAT is made comprehensive, the estimated incidence of the burden of the VAT is still progressive over all the quintiles household expenditure.

Evaluation of Stakeholder Impacts in Cost-Benefit Analysis

This paper expands the scope of the analyses of both public and private investment projects beyond the traditional criteria of the financial and economic net present value of an investment. It shows that if the economic and financial analyses are carried out using a common numeraire, preferebly, expressing all values in terms of the domestic prices at the domestic price level, the scope of the analysis can be expanded to include issues of stakeholder impacts, poverty impacts, and an assessment of the long term sustainability.

Taxation of Income of Multinational Corporations: The Case of the United States Petroleum Industry

While U.S. petroleum corporations pay no U.S. tax on foreign income, they received in the 1969-1972 period a rate of return on foreign investment comparable to domestic corporate investments. The present U.S. tax system allows tax credits from one foreign country to offset U.S. taxes from foreign income, with the result that the U.S. receives virtually no corporate income tax from foreign petroleum investments. The multinational corporations use transfer pricing to shift profits between countries so that tax liabilities will be minimized. Loss of revenue to consumer countries due to transfer pricing is estimated at

Tax compliance: when do employees behave like the self-employed?

205 million in 1966 and

Taxation and Economic Development in Taiwan

240 million in 1970. (19 references) (DCK)

A VAT Revenue Simulation Model for Tax Reform in Developing Countries

Previous studies of the underreporting of income for tax purposes have used private employees as the benchmark to which other groups’ compliance was measured. In this paper it is suggested that there are a number of circumstances when there will be an incentive for private employees and their employers to collude to understate employee wages and salaries for purposes of taxation. The existence of high marginal tax rates of income tax combined with high social security payroll taxes are the typical conditions that stimulate this behaviour. These conditions are present in North Cyprus. This paper examines a rich source of household consumption expenditure and income data for North Cyprus that allows one to separate out the consumption expenditures made by the self-employed, private employees and civil servants over specific periods of time. From the comparison of consumption expenditures on food by these three groups it is possible to estimate how much self-employed and the private employees understated their incomes as compared to the civil servants. It is found that in North Cyprus private employees understate their incomes by approximately the same proportion of their incomes as do the self-employed.

On Measuring the Social Opportunity Cost of Permanent and Temporary Employment: A Reply

Documenting the evolution of economic development and fiscal policies in Taiwan over the last four decades, this work explores the effectiveness of specific tax and trade policies. The authors make a major revision to the previously accepted role played by the export processing zones and the protection of domestic producers from foreign competition. The extensive use of duty exemption systems enabled the government to create competition among the exporting firms, and the innovative design of economic policies and administrative systems helped the private sector generates savings, expand investments and promote exports. This work analyzes how unique fiscal policies and administrative practices were designed to foster the rapid growth and development of Taiwan during this period.

On Measuring the Social Opportunity Cost of Foreign Exchange

In this paper, a methodology is developed to construct a revenue estimation model for a value added tax system in countries which, at present, have an indirect tax system containing sales, excise taxes, and tariffs.

The Economics of Casino Taxation

Two major points were raised in this Journal by DeWolf and Sugden (1979) in their comment on our paper (1978) concerning the measurement of the opportunity costs of permanent and temporary employment. Clarification of these issues and their implications is central to the estimation of the social opportunity cost (soc) of labour and its application in the evaluation of public sector sponsored investments. First, DeWolf and Sugden contend that the labour market in Cape Breton during 1972-4 could not be in long-run equilibrium with other labour markets in Canada when the proportion of time spent unemployed in the temporary sector was on average as high as 46 per cent, and the soc of temporary jobs created in the project should not be greater than the market wage rate. Secondly, they argue that the migration response to either the creation of jobs by a project or the displacement of workers at a firm would not be rapid or large enough to bring about a return to the initial equilibrium in the labour market within a relevant length of time.