Tax and inequality in the United States

Taxation impacts individuals' lives in significant, and sometimes unequal, ways. While much sociological research examines factors that contribute to economic inequality and policy development, the relationship between inequality and tax policies remains understudied in sociology. In this article, I review extant research highlighting the ways in which taxation is an important site of inequality in the United States. I focus on how some of the most valuable tax policies related to work, marriage, investments, and homeownership contribute to economic inequality with class, gender, and race/ethnicity variation.     

Configurations of geographic and societal spaces: a sociological proposal between ‘methodological nationalism’ and the ‘spaces of flows’

Abstract The societal practices, symbol systems and artefacts that form sociology's field of study are shifting in their spatial reach. Terms like internationalization, globalization, glocalization or transnationalization denote an (at least perceived) increase in the flow of information, commodities and capital across nation‐state borders as well as an unprecedented ease of human spatial mobility. Situated in the wider research programme of transnationalism, in this article I present a typology of geographic‐societal spatial configurations, of which transnationalism is one of several ideal types. Distinguishing explicitly between an absolutist and a relativist approach to space and applying this to geographic and societal spaces, the article puts forward a framework for discussing how shifts in the geographic reach of the societal are taking place. The case of General Motors provides an example of how such a typology could be applied. The article concludes by discussing some consequences for future empirical research.     

CORPORATE TAX POLICY AND INDUSTRY LOCATION WITH FULLY ENDOGENOUS PRODUCTIVITY GROWTH

This paper considers how national corporate tax policy affects productivity growth through adjustments in geographic patterns of industry in a two‐country model of trade. With trade costs and imperfect knowledge spillovers between countries, production concentrates partially and innovation concentrates fully in the country with the lowest tax rate. A rise in the international corporate tax differential accelerates productivity growth through an increase in the production share of the low‐tax country that improves knowledge spillovers from industry to innovation. The paper also investigates the relationship between the corporate tax differential and the level of market entry, and analytically characterizes the effects of changes in tax policy on national welfare. (JEL F43, O30, O40, R12)     

PRICE ELASTICITY AND ADVERSE SELECTION IN THE DEMAND FOR SUPPLEMENTARY HEALTH INSURANCE

Probit regression estimates show the effects of the price of insurance, anticipated medical expenditures, and other factors on reported decisions about purchasing hypothetically offered supplementary insurance policies. The demand estimates can characterize how much supplemental insurance would be purchased under different tax policies affecting health insurance purchases. Although eliminating the current tax subsidy to insurance is shown to decrease demand, the results indicate a substantial demand for supplementary insurance even in the absence of present tax incentives. However, our results on adverse selection raise concerns about the potential stability of supplemental insurance markets.     

Using student subjects in experimental research: a challenge to the practice of using students as a proxy for taxpayers

The tax discipline has accepted the practice adopted in the economics and psychology disciplines of using student subjects for experimental research purposes. However, in other social science disciplines (e.g. accounting, management or consumer research), experimental research that uses students as a substitute for another group has been widely criticised as having little external validity. In this research, data are compiled from journal articles over a 20?year period to investigate the extent to which tax experiments use student subjects and the potential implications from this practice. Three research questions are addressed. First, do tax studies using student subjects justify or explain the use of student subjects? Second, are policy recommendations or other extrapolations to the tax-paying population made from the student subject results? Third, is any acknowledgement made of the potential limitations of using student subjects? The findings indicate that approximately half of the tax experiments investigated used student subjects. Of these, approximately 80% provided no justification for their chosen subject sample. A similar proportion did not acknowledge any limitations from the use of a student sample. Around half of the papers using student subjects extrapolated their findings to the general tax-paying population or provided tax policy recommendations. In addition, the research indicates that the tax discipline has not had the same level of robust debate on the use of student subjects in experimental research as that seen in other disciplines. This potentially limits the external validity and utility of many of the tax research experiments undertaken to date.     

From Monterrey to Doha: Taxation and Financing for Development

Ill‐conceived tax policies cost developing countries vast sums of public revenue, but this issue has received relatively little attention within the Financing for Development (FfD) process of the United Nations. The outcome documents of the FfD conferences in Monterrey (2002) and Doha (2008) largely neglect globalisation‐related tax issues such as under‐taxation of multinationals and capital flight to tax havens. This article analyses how this topic has been marginalised by powerful interests, ideas and institutional factors, but it also shows how a growing coalition of governments, international organisations and NGOs has recently succeeded in raising the issue much higher up the international agenda.     

Building versus maintaining a perceived confidence-based tax climate: Experimental evidence

A confidence-based climate between public administrations and citizens is essential. This paper argues and provides empirical evidence that depending on the perceived interaction history, different policies are needed to build versus maintain confidence. Applying the extended Slippery Slope Framework of tax compliance, an online and a laboratory experiment were conducted to explore whether tax authorities’ coercive and legitimate power have different effects depending on whether they are situated in an antagonism-based or confidence-based climate. Results showed that in an antagonism-based interaction climate, a combination of high coercive and high legitimate power changed the climate into a confidence-based interaction climate. In contrast, in a confidence-based climate the same power combination did not maintain but erode the climate. Results also suggest that confidence-based climates are maintained by low coercive power combined with high legitimate power. The paper concludes that interaction climates operate as psychological frames which guide how policy instruments affect taxpayers’ trust in the tax authorities.     

The Effect of Tax Policy Choices on the Labor Market on the Perspective of Global Governance

Tax policy transition plays a very important part in global governance, not only for the public operation or social equity, but also for the labor market which is firmly related with social welfare. On the other hand, unemployment has become a serious problem in 2008. Our research focused on the influence of different tax policies on the adjustment of unemployment, and the transition between direct and indirect taxation. This paper starts with conceptual discussion of the theoretical mathematical model and empirical analysis, and finally policy suggestion. Our conclusion varies due to the initial tax policy, but briefly we suggest that direct tax is more beneficial in the job market than indirect tax.      

The influence of tax authorities on the employment of tax practitioners: Empirical evidence from a survey and interview study

Tax practitioners play a crucial role in the degree of taxpayers’ compliance – a role that has increased as tax systems worldwide have become more complex. However, little is known about tax authorities’ impact on taxpayers’ decisions to employ tax practitioners. Based on earlier research on motivations to employ a tax practitioner and the extended slippery slope framework of tax compliance, we conducted two studies which provide some answers. A survey study – comprising a representative sample of 500 Austrian self-employed taxpayers – revealed that financial gain is not the most important reason to employ a tax practitioner but instead the motivation to avoid problems with the tax authorities. Related to that, we also find that taxpayers’ perception of tax authorities wielding coercive power motivates them to employ tax practitioners. In the interview study with 33 self-employed taxpayers and 30 tax auditors, taxpayers indicated that they sought to avoid contact with tax officers by employing tax practitioners. This finding was supported by tax officers who reported preferring interaction with tax practitioners over direct contact with taxpayers. The two studies point to the complex relationship between taxpayers, tax authorities and tax practitioners, and allow the drawing of theoretical and practical implications.     

TAX POLICY AND CONSUMER FORESIGHT: A GENERAL EQUILIBRIUM SIMULATION STUDY

This paper presents a dynamic computational general equilibrium model in which expectations regarding future prices can be varied systematically. The model is employed to evaluate how expectations influence the effect of long-run tax policy changes. Under policies (like a consumption tax) that reduce rates of return over time, individuals with perfect foresight save less than individuals with myopic beliefs. This is because consumers with foresight are better able to anticipate the lower returns. Lower saving means that existing distortions due to capital taxes are not offset as much, so that welfare gains are smaller under perfect foresight.     

Missing Out on the Parenthood Bonus? Voluntarily Childless in a “Child-friendly” Society

This article draws on interviews with Swedish voluntarily childless women and men in order to discuss their understandings of living in a so-called “child-friendly” welfare society where social policies subsidize families with children. Previous research from Anglo-Saxon countries implies that the social, political and economical interests of the voluntarily childless are in conflict with the interests of parents and that state subsidies and policies in support of parents could be considered as discrimination of childless people. However, in contrast to this previous research, the interviewees did not object to the redistributive tax system that benefits parents or to the political ambition to build a “child-friendly” labour market where it is possible to reconcile work with parenthood. Instead they defended themselves against accusations for being “free-riders” who did not contribute to society by referring to the responsibility they took by paying high taxes. Notwithstanding, the informants criticized how some parents misused their benefits and cashed in on them, making the voluntarily childless feel exploited. The article also suggests that state subsidies can eliminate some motives for voluntary childlessness but not all of them. The results add nuances to previous research as they highlight the importance of further investigating the relations between parents and non-parents in a social and political context.     

借鉴国际经验,优化上海自贸试验区的税收政策

"探索与试验区相配套的税收政策"是国务院《中国(上海)自由贸易试验区总体方案》提出的重要任务。上海应立足国际视野,制订上海自贸试验区的相关财税政策:完善适应跨境投资业务发展和离岸业务发展的税收政策,完善支持金融行业发展和金融产品创新的税收政策;完善针对特殊业态和交易形式的税收鼓励政策;通过尝试预先裁定制度来创新税收监管制度等。     

Adoption of electronic-cigarette-free,hookah-free and American College Health Association recommended tobacco-free policies among a national sample of postsecondary educational institutions

Abstract

Objective: To examine the prevalence of various types of tobacco-free policies among a US national sample of postsecondary educational institutions (PEIs). Participants: A national sample of US PEIs (N?=?605) attended by the participants of the NEXT Generation Health Study. Methods: Tobacco policies of these PEIs were reviewed to determine if they were e-cigarette-free (yes/no), hookah-free (yes/no), and ACHA-recommended tobacco-free (yes/no) in June–December 2017. Logistic regression models were used to examine the relationships between institutional characteristics and tobacco policies. Results: Overall, 39.2, 26.0, and 20.0% of the sample adopted e-cigarette-free, hookah-free, and ACHA-recommended tobacco-free policies, respectively. Proprietary PEIs (vs. public) were less likely to have ACHA-recommended tobacco-free policies, while PEIs in the South and Midwest (vs. West) were more likely to have ACHA-recommended tobacco-free policies (p?<?0.05). Conclusions: Most sampled PEIs did not have ACHA-recommended tobacco-free polices. Subsequent research needs to investigate how ACHA-recommended tobacco policies influence tobacco use.     

A New Scale of Poverty: How the Officially Recorded Poor People in Turkey Perceive Themselves

Governments adopt policies to prevent and address the socioeconomic problem of poverty. This article examines how officially recorded poor people perceive themselves and the causes of their poverty. It is based on a sample of 531 officially recorded poor people living in the Turkish province of Çankiri. A questionnaire was administered comprising 69 characteristics of poverty. The findings suggest that there are four main causal explanations for poverty attributions: fatalism, discrimination, moral deficiencies and personal deficiencies. The measure developed for this research can be tested and applied to different cultural groups with a high level of validity and reliability.     

Political considerations of studying tax compliance

Given the recent interest of the Internal Revenue Service in having academic social scientists do research on the problem of tax noncompliance, it is important to consider the political and administrative context in which such research would occur. While the IRS offers a tremendous opportunity in the form of data and expertise, its tax enforcement mission and political environment play an important role in shaping the research agenda. Specifically, the academic social scientists, wishing to avail themselves of the opportunity, must be able to demonstrate the practical application of their research, something that researchers of the so-called “underground economy” did not do. Moreover, the research must not perpetuate the notion that the ability or efficiency of the IRS to enforce the tax laws is being widely eroded. The criminal deterrence doctrine is an area of basic research having particular interest to the IRS. There is a discussion of how research on the deterrence of tax crime might develop. He has done research for the IRS and presently is studying the untaxed economy.     

Do family policy regimes matter for children's well-being?

Researchers have studied the impact of different welfare state regimes, and particularly family policy regimes, on gender equality. Very little research has been conducted, however, on the association between different family policy regimes and children's well-being. This article explores how the different family policy regimes of twenty OECD countries relate to children's well-being in the areas of child poverty, child mortality, and educational attainment and achievement. We focus specifically on three family policies: family cash and tax benefits, paid parenting leaves, and public child care support. Using panel data for the years 1995, 2000, and 2005, we test the association between these policies and child well-being while holding constant for a number of structural and policy variables. Our analysis shows that the dual-earner regimes, combining high levels of support for paid parenting leaves and public child care, are strongly associated with low levels of child poverty and child mortality. We find little long-term effect of family policies on educational achievement, but a significant positive correlation between high family policy support and higher educational attainment. We conclude that family policies have a significant impact on improving children's well-being, and that dual-earner regimes represent the best practice for promoting children's health and development.     

Child poverty and family policies across eighteen wealthy Western democracies

While a good deal has been written about the potential value of family policies in reducing child poverty in Western countries, few cross-national quantitative studies have been carried out on this topic. This article uses ordinary least squares regression analysis on panel data from 18 Western democracies from 1987 to 2007 to test the significance of family policies and other welfare policies on child poverty rates. It extends existing research on the relationship between family policies and child poverty by utilizing a broader data-set in terms of time, countries, and child poverty measures. The main finding is that all three of the main family policies studied – child cash and tax benefits, paid parenting leaves, and public support for childcare – correlate significantly with lower child poverty rates. Somewhat surprisingly, disability and sickness insurance also correlates significantly with lower child poverty in nearly every model and test. These findings provide valuable insight for future research and policy-making in the area of child poverty.     

The earned income tax credit and union formation: The impact of expected spouse earnings

Using the Survey of Income and Program Participation from 2001, 2004, and 2008 and federal and state variation in earned income tax credit generosity over time, I investigate how changes in expected household earned income tax credit benefits associated with marriage affect cohabitation and marriage behavior among low-income single mothers. I simulate a marriage market to predict potential spouse earnings for a sample of single mothers in order to estimate the potential losses or gains in earned income tax credit benefits upon marriage. Using multinomial logistic regressions, I then analyze how the anticipated loss in earned income tax credit benefits upon marriage affects the likelihood of marrying or cohabiting. Results suggest that the average earned income tax credit-eligible woman can expect to lose approximately US$1,300 in earned income tax credit benefits in the year following marriage, or about half of pre-marriage benefits. Single mothers who expect to lose earned income tax credit benefits upon marriage are 2.5 percentage points less likely to marry their partners and 2.5 percentage points more likely to cohabit compared to single mothers who expect no change or to gain earned income tax credit benefits upon marriage. Despite recent policy efforts to reduce the size of the marriage penalty embedded in the earned income tax credit structure, these results suggest that the earned income tax credit still creates distortions in marriage and cohabitation decisions among low-income single mothers.     

世界主要自由贸易区:运行特色、税制设置和税政评析

世界自由贸易区的基本规则是,通过管理高效和税收优惠降低企业的交易成本,从而提高企业利润。自由贸易区的运行特色与其税制设置紧密相关。上海自贸区的税收模式限于地方政府的税收管辖权限,尚未呈现出与发展战略目标相适应的特色,因此,地方政府可借鉴日本FTZ、韩国的FTZ,结合积极灵活的财政补贴、就业支持与金融支持,鼓励国内消费,积极与本地产业融合发展,共同促进上海城市的产业升级。     

Hobby farming in America: Rural development or threat to commercial agriculture?

Part-time farming has increased throughout the developed countries since World War II. In the 1970s and early 1980s, the United States experienced a large and widespread increase in the number of farms of less than 50 acres, most of which sold less than $10,000 a year in farm products. The majority of these were ‘hobby’ farms and were located in rural-urban fringe areas of growing nonmetropolitan regions. In sufficient numbers, the proliferation of these hobby farms may threaten the future viability of commercial farm operations by raising land prices, fragmenting land holdings, and thus hindering the expansion of commercial farms and the consolidation of parcels into commercial farm units. America's state and local governments have been slow to regulate the spread of hobby farms in the rural-urban fringe and in growing nonmetropolitan areas. Attempts in the State of Oregon to control hobby farms have met with mixed success. Yet the Oregon approach offers important lessons for other areas of the United States as well as other developed countries. In fringe areas in particular, policies and incentives need to be devised and implemented to locate hobby farms away from commercial farming areas and to eliminate tax subsidies for hobby farms so that the long-term viability of commercial farming can be maintained.