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| 2. |
- Dackehag, Margareta, et al.
(author)
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Taxation of Dividend Income and Economic Growth: The Case of Europe
- 2015
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Other publication (other academic/artistic)abstract
- More recently researchers have turned to analyze how the tax structure, rather than the overall tax level, affects economic performance. For instance, several papers have investigated how taxation on corporate and individual (labor) income influences growth. Taxation of dividend income may also influence growth via its impact on investments and firm behavior. Within the academic community there is conflicting views about the impact taxation of dividends has on firm behavior and, hence, on economic performance. According to the “traditional view”, taxation of dividends is distortionary and increases the cost of equity. According to the “new view”, taxation of dividends does not influence the marginal cost of capital and consequently has no impact on investment decisions. To our knowledge, this paper is the first study to explore how tax rates on dividends affect economic growth, by using panel data from 1990 till 2008 for 18 European countries. We find that taxation of dividend income negatively influences economic growth, a result that corroborates the old view of dividends taxation as distortionary and also has some policy implication for the European countries in question.
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| 3. |
- Dackehag, Margareta, et al.
(author)
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Taxation of Income and Economic Growth: An Empirical Analysis of 25 Rich OECD Countries
- 2012
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Other publication (other academic/artistic)abstract
- Several empirical papers have studied the effect of government size, typically measured as government expenditures, on economic growth. There is no consensus on the direction of this impact, even though more recent studies tend to find a negative relationship between the general level of government expenditures and economic growth. This negative relationship is explained by the distortions that raising tax revenues cause on economic activities. There are, however, several ways to raise tax revenues that likely have different distortionary effects and, hence, may impact economic growth differently. This paper analyses how taxation of income influences economic growth. More precisely we study how statutory tax rates on corporate and personal income affect economic growth by using panel data from 1975 till 2010 for 25 rich OECD countries. We find that both taxation of corporate and personal income negatively influence economic growth. The correlation between corporate income taxation and economic growth is more robust, however.
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| 4. |
- Hansson, Åsa, et al.
(author)
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Do Multinationals Pay Less in Taxes than Domestic Firms? Evidence from the Swedish Manufacturing Sector
- 2016
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Other publication (other academic/artistic)abstract
- There is a strong general concern amongst policymakers worldwide that multinational enterprises engage in far-reaching tax-planning activities. It is generally thought that by using transfer pricing or other techniques to shift profits, multinational enterprises can avoid taxation and thereby erode tax bases. Several attempts have been made to tackle this problem, not least through the OECD/G20 initiated Action Plan on Base Erosion and Profit Shifting. It is hard, however, to empirically quantify the magnitude of tax-planning activities that takes place. In this paper, we rely on census data from tax return and income statements and balance sheets reported by Swedish manufacturing firms in the 1997-2007 time period to identify possible profit-shifting activities by multinational enterprises. We study systematic differences between multinational and comparable domestic firms in tax payments, profits, earnings before interest and taxes, and equity ratios using difference-in-differences estimations based on propensity score matching. The detailed data allow us to narrow down the empirical focus and investigate not only whether multinational pay less in taxes than domestic firms, but also how tax planning activities may take place through transfer pricing and/or internal debt set-ups.
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| 5. |
- Hansson, Åsa
(author)
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Have You Benefited From the Tax Reforms? The Distribution of Tax Payments in Sweden after Three Decades of Tax Changes
- 2020
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Other publication (other academic/artistic)abstract
- Thirty years ago, the Swedish tax system underwent a major reform. Since then there have been many changes to the tax system, and the general level of tax revenues has declined by over five percentage points of GDP. The decline in total revenues does not necessarily translate into an evenly distributed decline for taxpayers. This paper studies how tax payments have changed in Sweden since the major tax reform over income distribution, sex, age, and geographical location. The results show that individuals at the bottom and very top of the income distribution have benefited disproportionally more from lower taxes. Labor tax payments as share of labor income have increased across the income distribution and particularity so for middle- and high-income earners.
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| 7. |
- Hansson, Åsa, et al.
(author)
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Labor Taxes and FDI Decisions in the European Union
- 2011
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Other publication (other academic/artistic)abstract
- This paper uses panel data on bilateral FDI flows in the European Union to empirically analyze the impact of labor and corporate taxations on FDI decisions. While the effect of corporate taxes on FDI is well documented, the impact of labor taxes on FDI has been neglected. This is surprising since labor taxation may influence FDI as well. The reason for this is that taxation of labor affects the production cost and the ability to attract and retain productive labor and ultimately the investment return. By employing a Heckman two-step estimation model, which controls for possible sample selection bias due to many zero bilateral observations, it is found that labor taxes do influence FDI decisions. The effect is significant both statistically and economically, although the magnitude is smaller than for corporate tax.
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| 8. |
- Hansson, Åsa, et al.
(author)
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Property Values and the Likelihood of Self-Employment
- 2020
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Other publication (other academic/artistic)abstract
- It is well known that capital constraints can hinder individuals to set up a business. Many business owners rely on own capital or capital from friends, fools and family in order to acquire required capital. In this paper, we study the role property plays for starting a business or becoming self-employed. Specifically, we investigate how property values and changes in property taxes affect the likelihood that an individual is or becomes self-employed using rich Swedish individual panel data. The paper studies the probability that an individual is or becomes self-employed using detailed individual tax return data from Sweden. The property tax reform in 2008 is utilized as a “natural experiment” to analyze whether a lower property tax increased the probability of becoming self-employed. The reform in 2008 lowered the property tax for especially highly assessed property. Hence, the reform is predicted to reduce capital constraints for individuals with highly assessed property. Lower tax payments increase property values and consequently individual wealth, and in addition, increases disposable income as the recurrent yearly tax is reduced. The detailed data also allow us to control for many other important confounding factors. For example, we can control for other financial assets such as accumulated wealth, and capital as well as labor income. Results indicate that once we identify the effect of property value by the tax reform, property value is associated with higher probability of being self-employed but the result for becoming self-employed vanishes.
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