TAXES AND SOCIAL SPENDING: THE SHIFTING DEMANDS OF THE AUSTRALIAN PUBLIC

This paper uses data from the Australian Election Studies (1987–2001) to investigate the preference for lower taxes or higher social spending among Australian voters. We offer some explanations for the increased support for higher social spending, especially after the election of the Howard Government in 1996. Regression models allow us to distinguish various factors that predict support for higher social spending. The main conclusions of the paper are that support for social spending is higher among voters with ‘social‐democratic’ attitudes and voting preferences but significantly, is also higher among voters who think health and Medicare services have declined since 1998. These findings are discussed in the context of various possible explanations for declining support for tax cuts.     

Public Opinion On Taxes And Government Spending

This article analyses egalitarian attitudes as well as opinions concerning taxation and government spending. Australians would prefer to have their taxes reduced than to increase government spending on social services, if faced with such an alternative. Typical welfare programs have a low priority, but the public would like to see increased spending on education and science, health services, roads improvements, military defence, and fighting against drug addiction. An individual's opinions about government spending are influenced by his or her socio-economic characteristics, with unemployed people and urban dwellers being more supportive of government spending on social programs.     

宏观税负、公共支出结构与个人主观幸福感 ——兼论“政府转型”

本文利用CGSS2006数据库,对政府转型下的宏观税负、民生财政支出和地区收入差距等与个人主观幸福感的关系进行实证检验后发现：（1）宏观税负对居民主观幸福感有显著负影响;（2）总体而言,政府公共支出增进了居民的主观幸福感;（3）从公共支出结构看,地方政府基建投资对于城镇居民的主观幸福感有显著负效应,政府用于科教文卫和社会保障的支出对居民的主观幸福感有显著正效应;（4）科教文卫支出与社会保障支出对市民与外来人员幸福感的影响存在显著差异。     

An evaluation of alternative fiscal adjustment plans: The case of Italy

What advice can be given to the policymaker to reduce the burden of public debt after a crisis? In this situation, the debt consolidation calls for fiscal surplus based on increases in taxes and/or reductions in public spending. This paper aims at answering to the above question. Specifically, it evaluates different policy options on the table using the estimated model of the Italian dynamic General Equilibrium Model (IGEM). Our main message is that plans aimed at reducing the public debt based on tax increases rather than expenditure reductions are more effective. Therefore, consolidation should be designed on the former.     

Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia

Although redistribution results from the simultaneous effects of taxes and transfers, analyses of their distributional effects in low‐income countries have largely been undertaken from singular perspectives. This article jointly assesses the distributional effect of taxes and transfers (through social protection) using Ethiopia as a case study. We find that Ethiopia's flagship social protection programme is more effective than income taxation in achieving poverty reduction, while neither policy achieves a sizeable reduction in overall inequality. We also find that Ethiopia does not currently have the capacity to close the poverty gap or to fully fund its main safety net programme using domestic income sources alone.     

A Bedrock of Support? Trends in Welfare State Attitudes in Sweden, 1981–2010

This article reports findings about Swedes' attitudes towards the welfare state from 1981 to 2010, building on data from the Swedish Welfare State Surveys. Attitudes towards social spending, willingness to pay taxes, attitudes towards collective financing and public organization, suspicion about welfare abuse, and trust in the task performance of the welfare state are tracked. Overall, there is a large degree of stability in attitudes, and where change is registered, it tends to go in the direction of increasing support. More people state their willingness to pay higher taxes for welfare policy purposes; more people want collective financing of welfare policies; and fewer people perceive extensive welfare abuse in 2010 than was the case in previous surveys. Class patterns change so that the salaried and the self‐employed become more similar to workers in their attitudes. Hence, the unprecedented election loss of the Swedish Social Democrats in 2010, and the rise of the Moderates (conservatives) as the dominant party cannot be explained by changing attitudes towards the welfare state. Nor can any corrosive effects from increased marketization of the Swedish welfare state on public support for welfare policies be detected.     

Gray Peril or Loyal Support? The Effects of the Elderly on Educational Expenditures*

Objectives. Do large concentrations of elderly represent a “gray peril” to maintaining adequate educational expenditures? The gray peril hypothesis is based on an assumption of instrumental self‐interest in political behavior. In contrast, we argue that loyalty to community schools competes with economic self‐interest and that older citizens are heterogeneous in their preferences. Methods. We test these arguments and their implications for public school finance using a data set of more than 9,000 school districts. Results. The data show that longstanding older residents represent a source of support for educational expenditures while elderly migrants lower spending. Further, this divide among the elderly and their impact on policy outputs depends on how states finance local public education and on aspects of state and local tax policy. Conclusions. Elderly concentrations are a financial asset for a school district unless the senior community includes a large number of new arrivals. The design of tax policy can have enormous impact on the depth of political cleavages and their ultimate impact on public policy. The results are consistent with the idea that loyalty—an emotional bond between residents and their community's institutions—competes with and often trumps instrumental self interest.     

Reducing U.S. carbon dioxide emissions: an assessment of different instruments

The possibility that carbon dioxide emissions from fossil fuel use might lead to global warming has become a leading environmental concern. Many scientific and environmental organizations have called for immediate action to limit carbon dioxide production. For the most part, however, public debate has focused on a single policy instrument: a carbon tax applied to fossil fuels in proportion to their carbon content. We present a detailed model of the U.S. economy and use it to compare carbon taxes with two other instruments that could achieve the same reduction in carbon dioxide emissions: a tax on the energy content of fossil fuels (a BTU tax) and an ad valorem tax on fuel use. We find that carbon taxes can achieve a given reduction with the least overall effect on the economy, but with a large effect on coal mining. Energy taxes are fairly similar to carbon taxes but have slightly less impact on coal mining and slightly greater overall cost. In contrast, ad valorem taxes fall much more lightly on coal mining but have a much greater effect on the economy as a whole.     

Spillover effects of taxes on government debt: a spatial panel approach

It is claimed that tax policy is neither time- nor space-independent due to cross-border tax base mobility, which induces spillovers. Specifically, fiscal shocks in one country are supposed to have an impact on fiscal policies in other countries. Different types of taxes influence economies differently. This paper addresses the question of their impact on government debt. Within a framework of spatial econometric modeling, we evaluate the impact of capital, labor and consumption taxes on public debt in 34 European countries in 2002–2011, and find strong spatial spillovers. We show that a consumption tax and, to a lesser degree, a capital tax significantly affect the sovereign debt, and that the global relations play a leading role (i.e. dominate the local ones) in shaping fiscal policy.     

Social investment effects of public education,health care,and welfare service expenditures on economic growth

The purpose of this study is to theoretically and empirically examine whether public spending in education, health care, and welfare service operates as a fruitful investment in welfare states, which has been implied in the literature of social investment arguments. Based on comprehensive review of existing literature, this study suggested a tripartite mechanism of social investment effect of such spending, that is “enhancement of human capital,” “support for labor force participation,” and “job creation.” To find the empirical evidence, a pooled time‐series cross‐section analysis was conducted with the data of 15 advanced welfare states from 1980 to 2015 using estimation technique of fixed‐effect model. The results confirmed that public spending in education, health care, and welfare service had a positive medium‐term as well as long‐term effect on economic performance, while cash‐type welfare spending had an obscure or no visible effect on economy. Government consumption that is a proxy and control variable of size of the welfare state showed a positive effect on real GDP in the medium term but a negative effect in the long run. In conclusion, this study suggests that reinforcing social services should be recognized and dealt with as essence of social investment strategy.     

PUBLIC WEALTH,PUBLIC HEALTH,AND PRIVATE STEALTH: EXAMINING THE BLACK MARKET IN CIGARETTES IN AUSTRALIA

Taxes on tobacco provide a significant income for the Australian government — $5.1 billion in 2001. At the same time, health officials are making strenuous efforts to reduce smoking, particularly among teenagers. Some economists suggest that raising taxes on tobacco will produce more revenue while at the same time lowering smoking rates, particularly among youths who have less discretionary spending power than adults. But a by‐product of excise tax in Australia has been the emerging market in “chop‐chop,” tobacco diverted from legal channels by growers who receive considerably higher prices for a part of their yield than they can obtain from legal manufacturers. The article details this situation and suggests that only bold solutions may be able to reduce tensions in tax policies, smoking rates and the “chop‐chop” black market.     

Process over outcome: How perceptions of procedural fairness influence conservative support for redistributive taxes

Though majorities of Americans express support for redistributive tax policies as a cure for income inequality in the United States, this general support tends to dissipate when the public evaluates their support for specific proposals. The dominant explanations emphasize elite behavior and the disconnect between American values and political representation. An alternative view is that this counter-intuitive finding is entirely consistent with individual values. Some people place higher priority on policy processes than policy outcomes. This paper demonstrates that conservatives think about redistributive tax policy differently than liberals. Conservative support (opposition) for redistributive taxes is based on evaluations of the fairness of processes of government that lead to economic inequality. When conservatives believe that these processes are not fair, they are very supportive of wealth redistribution as a cure for economic inequality, whereas liberal support for wealth redistribution is more outcome-dependent.     

Moving Toward Medicare Home Health Coverage for Persons with Alzheimer's Disease

ABSTRACT

Medicare home health care policy does not incorporate research evidence of effective palliative home care interventions for Alzheimer's disease and dementia patients and caregivers. This article examines the dissonance between the needs and burdens of Alzheimer's disease patients and caregivers, research results on medical and palliative care interventions, and medicalized public policy in the Medicare home health benefit. The article asserts existing research establishes a prima facie case exists for the federal government to fund a Medicare Palliative Home Care for Alzheimer's disease demonstration project. The article cites the success of the Medicare Hospice Demonstration project and Hospice Medicare Benefit in reducing costs and improving client quality of life as precedent and a model for Alzheimer's disease. Other research implications are identified.     

Moving toward Medicare home health coverage for persons with Alzheimer's disease

Medicare home health care policy does not incorporate research evidence of effective palliative home care interventions for Alzheimer's disease and dementia patients and caregivers. This article examines the dissonance between the needs and burdens of Alzheimer's disease patients and caregivers, research results on medical and palliative care interventions, and medicalized public policy in the Medicare home health benefit. The article asserts existing research establishes a prima facie case exists for the federal government to fund a Medicare Palliative Home Care for Alzheimer's disease demonstration project. The article cites the success of the Medicare Hospice Demonstration project and Hospice Medicare Benefit in reducing costs and improving client quality of life as precedent and a model for Alzheimer's disease. Other research implications are identified.     

CONTESTING FAIRNESS AND FRAGMENTING GROUPS: CULTURAL NARRATIVES OF TAXATION AND CITIZENSHIP IN GLOBALISING AUSTRALIA

This paper explores the relationship between culturally mediated narratives of fairness, conceptions of the state, group and individual identities, citizenship and debates about globalisation in Australian perspectives on tax administration. It is based on a qualitative analysis of 2374 responses to a survey of attitudes to the Australian tax system. This paper emphasises that taxpayer's statements can be read as cultural acts that enrich our understanding of how people give meaning and significance to their lives. The majority of respondents reported that taxation should be levied fairly across social groups. However, this sense of fairness is being eroded by the widespread perception that the wealthy are avoiding their “fair share” of taxes. However, although citizens view tax administration as increasingly unfair, there is no evidence of wholesale disengagement from the system. The majority of people believe that the tax system has legitimacy and that it can be reformed. There is still scope for policy innovation that reinstates a sense of fairness, equity and balance to the tax system.     

Internalizing the public cost of obesity in Spain: Distributional effects on nutrient intake

Studies dealing with obesity have confronted it either from the fiscal policy or from economic cost perspective. There is the need to target fiscal policy goals at the economic cost that obesity imposes on society instead of simulating arbitrary taxes schemes. This paper analyzes the effectiveness of imposing a revenue-neutral fat tax in Spain addressed to internalize the public health expenditure associated to obesity. Results suggest that this tax policy led to an improvement in the diet quality, and decreased the consumption of saturated fatty acid, sodium, and cholesterol. From the welfare perspective, the tax is regressive across all household segments.     

Fiscal harmonization in view of the Euro adoption: Economic implications for Poland

In this paper, we investigate the ex ante effects of fiscal policy harmonization that might be necessary for the adoption of the common currency on economic growth in Poland using a neoclassical dynamic two-sector general equilibrium model. We study two fiscal policy scenarios. In the first one, we adjust all taxes to German and EU-27 levels, respectively, while in the second one, we change only consumption taxes to German and EU-27 levels. We find that in the first scenario, the current Polish taxes yield the highest rate of growth due to lower capital taxation. However, in the second scenario, German and EU-27 taxes yield the highest rate of growth due to the lower consumption tax on capital-intensive good. From a policy perspective, our results suggest that fiscal policy with lower taxes on capital and capital-intensive goods can generate a higher rate of growth in the long-run. In the case of fiscal harmonization, our findings propose adopting only German or EU-27 consumption tax structure into the Polish tax system.     

Targets and Taxes: Explaining the Welfare Orientations of the Australian Public

Australia's welfare model – targeted payments alongside low but progressive taxation – exemplifies the targeted approach, prioritizing the needs of poorer citizens within the constraints of low taxation. But does this approach match the welfare orientations of Australia's voters? Does the public hold other views about welfare, emerging out of competing interests in welfare debates? We consider results of two questions included in the Australian Survey of Social Attitudes 2005. The first question asks respondents about four welfare goals that outline competing welfare orientations: targeting poverty, expanding health and education, enforcing the welfare rules and reducing welfare. The second question asks about four taxation goals drawing on similar orientations as established for welfare: targeting tax cuts, taxing for welfare, enforcing tax rules and reducing overall tax. Asking about both enables us to tell whether voters approach tax and welfare ‘consistently’ and to see whether, in Australia's case, there is a preference for Australia's targeting model. We reach three conclusions: (1) voters hold diverse preferences about welfare and taxes, but the targeted model has a relatively strong voter base; (2) voters hold ‘pro‐welfare’ orientations, choosing poverty reduction and expanding public services over both paternalism and cutting welfare, and (3) multivariate analysis indicates a level of consistency in welfare and tax orientations among voters.     

WHO'S NOT PAYING THEIR FAIR SHARE: PUBLIC PERCEPTIONS OF THE AUSTRALIAN TAX SYSTEM

Data from the Community Hopes, Fears and Actions Survey are used to examine how pervasive the view is that the more privileged in society are failing to pay their fair share of tax, to understand the beliefs that underpin such perceptions, and the reforms that are needed to open dialogue with the Australian public about the issue. Support is found for five hypotheses. Economic self‐interest provides a partial explanation for perceptions of vertical inequity, but more important are disillusionment with the Australian democracy and perceptions of insufficient procedural justice from the tax office. Values about how Australian society should develop also play a part. Those looking for a more equal, caring and compassionate Australia perceive there to be a high level of vertical inequity. Such perceptions are not shared by those aspiring to an Australia that pursues competitive advantage either economically or politically. Tax authorities are brokers for social order and harmony in democracies. They can not determine the policies that are supposed to deliver these goals, nor the rules by which individuals are expected to contribute to the government coffers. But they carry responsibility for making it all happen — collecting taxes and providing government with revenue. As such, their integrity is pivotal to smooth democratic functioning. Integrity for a tax authority involves having purposeful and sound goals, appropriate and ethical procedures for pursuing such goals, and processes allowing reflection and evolution of their operation in response to the democratic will (Braithwaite 2003). This paper is a contribution to the process of reflection on how the tax system is working for its citizens. Its purpose is to investigate the extent to which the Australian community believes that their tax authority is pursuing one of its goals, collecting revenue, in a sound and purposeful way. Three questions are addressed: (a) Are different social groups in our society paying their fair share of tax? (b) What are the experiences and aspirations lying behind public perceptions that some groups do not pay their fair share? and (c) Do perceptions of fairness shape the direction in which Australians want to see tax reform progress?     

How much do OECD countries spend on social protection and how redistributive are their tax/benefit systems?

The global economic crisis has reignited interest in social policy and public spending on different types of social benefits. Public social spending‐to‐GDP ratios are often used to consider the magnitude of welfare systems in international perspective, but such comparisons alone give an incomplete picture of social effort across countries. This article looks at these different factors, before briefly considering the redistributive nature of tax/benefit systems in different member countries of the Organisation for Economic Co‐operation and Development (OECD). The article also considers trends in social spending and compares spending in the late 2000s with the early 1990s when the previous economic crisis played out. The article ends by illustrating the profound effect the recent global economic crisis had on social spending trends across OECD countries.