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CAPITAL TAXATION WITH OPEN BORDERS
Abstract
Michael Wallerstein was a leader in developing a rigorous comparative political economy approach to understanding substantive issues of inequality, redistribution, and wage-determination. His early death from cancer left both a hole in the profession and a legacy that will surely provide the foundation for research on these topics. This volume collects his most important and influential contributions, organized by topic, with each topic preceded by an editorial introduction that provides overview and context.
... Taxes are compulsory and forceful levies for individuals and companies that are paid to the state in accordance with law number 16 of 2009. The general rules of taxation explain that tax rewards cannot be felt directly but for the welfare of society (Fitriandi et al., 2010;Reybold, 2009;Wallerstein & Przeworski, 2008). Therefore, one of the largest sources of state revenue is taxes (Hayati, 2019;Kusumo et al., 2022;Lidya Rikayana et al., 2023;Priyogo & Nasrudin, 2023). ...
This study is motivated by the observed shortfall in taxpayer compliance with Bumi and Bangunan Tax, prompting an evaluation of contributing factors. The primary aim is to assess the impact of Tax Sanctions on Motor Vehicle Taxpayer Compliance at the Bandung City SAMSAT Office. Employing a quantitative research design with a survey approach, the study analyzes the relationship between Tax Sanctions (independent variable) and Motor Vehicle Taxpayer Compliance (dependent variable) through regression analysis, utilizing SPSS for data evaluation. The findings reveal a significant positive effect of Tax Sanctions on taxpayer compliance, indicating that higher levels of enforcement correlate with improved compliance rates. This research contributes to the theoretical understanding of taxpayer behavior by reinforcing the role of sanctions in promoting compliance. Practically, it offers valuable insights for government policymakers, suggesting that enhancing tax sanction effectiveness can lead to increased compliance among motor vehicle taxpayers. These results underscore the importance of tailored enforcement strategies that not only deter non-compliance but also educate taxpayers about their obligations, ultimately fostering a more compliant tax environment.
This paper provides a new rationale for Uzawa preferences based on social choice; instead of positing that poor people are more patient because they are poor, it posits that poor people should be more patient if they wish their living standards to catch up with richer people. To provide a setting for this new rationale, the present paper studies the socially optimal choice of living standards over time by social planners for countries that, from low levels of total factor productivity (TFP), experience a gradual catch-up of their TFP level with that of the leader country. In the TFP catch-up scenario, the socially optimal choice of consumption and saving based on time additive preferences leads to no catch-up of living standards. To generate living standard catch-up we propose other-regarding Uzawa preferences, in which the rate of time preference is influenced by the gap in living standards between follower country and leader country. This other-regarding specification is consistent with recent findings emphasized in behavioural economics. The other-regarding Uzawa preferences form is illustrated quantitatively by simulating a model of the world economy. Copyright 2010 The Authors. Journal compilation 2010 Blackwell Publishing Asia Pty Ltd
This article proposes a model representing the relationship between economic actors and revenue seeking governments. Given a need for revenues, the model predicts the allocation of the new tax burden and patterns of control over public policy. The model is motivated by the history of the rise of parliaments in Western Europe. It is extended to urban and developmental politics. It is designed to employ the techniques of "neo-classical" economics to explore themes which have been developed most clearly in Marxist writings. Most importantly, the model suggests the way in which, given a need for revenues, specific fractions of the private sector can gain control over public policy. And it characterizes precisely the factors which yield differences in the ability of economic agents to employ the market to defect from the tax-levying state. The analysis thus gives insight into both the origins and the limitations of political democracy.
this paper was published in National Saving and Economic Performance, D. Bernheim and J. Shoven, eds., University of Chicago Press: Chicago, for the National Bureau of Economic Research, 1991. (A more complete version appeared as NBER Working Paper No. 2856.) A somewhat revised version is to be reprinted in Current Issues in International Trade and International Finance, edited by Dilip Das, Oxford University Press, Oxford, UK. The present version was further revised and is to appear as a chapter in On Exchange Rates, a collection of the author's writings, forthcoming from M.I.T. Press
I explore empirically a central claim of the structural dependence thesis, namely, that capitalists' ability to disinvest fundamentally conditions policy choices in democratic capitalist systems. Utilizing time-series data for 16 affluent democracies from 1965 to 1984, I find that, indeed, low rates of business investment are associated with reductions in corporate tax burdens and that these reductions are more pronounced in periods of economic crisis. Moreover, low rates of capital formation engender cuts in personal income taxes during periods of economic stress. However, I also find that the magnitude of responsiveness of taxation to low rates of investment is relatively small and that analyses of the political context of investment and taxation indicate that governments have choices. The responsiveness of corporate tax burdens to capital formation may, under some governments, be part of a policy mix designed to maintain adequate investment and to address the demands of core constituencies.
A central claim of both Marxist and neoclassical political theory is that under capitalism all governments must respect and protect the essential claims of those who own the productive wealth of society. This is the theory of “structural dependence of the state on capital.” Using a formal model, the internal logic and the robustness of the theory is examined. We conclude that in a static sense the theory is false: virtually any distribution of consumption between wage earners and owners of capital is compatible with continual private investment once an appropriate set of taxes and transfers is in place. Yet the state may be structurally dependent in a dynamic sense. Policies that, once in place, redistribute income without reducing investment do reduce investment during the period in which they are anticipated but not yet implemented.
One of the important determinants of the response of saving and consumption to the real interest rate is the ela sticity of intertemporal substitution. That elasticity can be measure d by the response of the rate of change of consumption to changes in the expected real interest rate. A detailed study of data for the twe ntieth-century United States shows no strong evidence that the elasti city of intertemporal substitution is positive. Earlier findings of s ubstantially positive elasticities are reversed when appropriate esti mation methods are used. Copyright 1988 by University of Chicago Press.
This paper analyzes the intertemporal allocation effects of anticipated tax rate changes, reconsidering the recommendations of the Meade Committee in a perfect foresight general equilibrium model of economic growth. It is shown that the R-base (or consumption) tax can be more distortionary than an income tax and that a revenue-neutral integration of corporate and personal taxation will lower social welfare. Moreover, it is argued that a dividend tax dominates the R-base tax because it places its distortions on the financial, rather than on the real, side of the economy. Copyright 1989 by American Economic Association.
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