Can formula apportionment really prevent multinational enterprises from profit shifting? The role of asset valuation,intragroup debt,and leases

The European Commission has been supporting a transition from a system of separate accounting to formula apportionment. After its 2011 draft directive was rejected by the Council, the Commission presented two new draft directives in October 2016, one stipulating rules for a common tax base and another the terms for consolidation and apportionment. The aspired system of unitary taxation is considered more resistant to profit shifting and assumed to reduce compliance costs. However, there are also doubts about the extent, to which such a system will eradicate tax-planning activities of MNEs. Other concerns have arisen about the practical issue of enforcing uniform rules for asset valuation throughout the member states. We use a dynamic model of tax accounting based on neoclassical investment theory and effective tax rates to determine to what extent formula apportionment mitigates the efficiency of typical profit-shifting strategies. We focus on the roles of transfer pricing and intragroup debt financing (through loans and leases) under both separate accounting and formula apportionment. We also take into account a possible leeway for inconsistent valuation. Our results show that instead of eliminating tax planning strategies, the proposed system might simply induce a shift from manipulating reported profits to influencing the apportionment key. Inside the European Union, the CCCTB may be able to render thin capitalisation rules and transfer pricing documentation redundant. However, formula apportionment invites for new forms of tax planning. It is therefore essential to give credit to these new kinds of tax incentives when implementing a system of unitary taxation.     

Much Ado About Nothing? Macro-Prudential Ideas and the Post-Crisis Regulation of Shadow Banking

Post-crisis, macro-prudential ideas have challenged the epistemic authority of private risk management technologies, declaring them to be pro-cyclical contributors to systemic risk. This discursive challenge has been most critical of the shadow banking system, where private risk management instruments are central. This challenge, however, has not been translated into regulatory tools which reflect these convictions. This paper studies this process of discursive challenge to (failed) regulatory intervention for the case of the repo-market, the heart of the current shadow banking system. It traces regulatory efforts on the global and EU level from regulatory statements to (lack of) action, documenting both the persistent articulation of macro-prudential ideas challenging private risk-management systems and timid to no regulatory intervention. It links this hiatus to international coordination problems, the need for macro-prudential action to span regulatory communities, involving banking and financial market authorities and disagreements between micro- and macro-prudentially oriented regulators. The lack of evidence and the difficulty to generate it are identified as major impediments for regulatory consensus, further aggravated by ambiguities about the goals of anti-cyclical regulation. Beyond governance problems and the persistent appeal of private risk-management systems, the paper thus points to difficulties operationalizing macro-prudential ideas as a major explanatory factor.     

Critical Reflection on the Ethics of Mindfulness

Mindfulness is a way to achieve mental wellbeing that has been widely adopted as part of counselling and mental health treatment. However, there is a distinct lack of critical reflection about the origins of this technique, how it is used, and the implications it has for the beliefs of clients. The purpose of this paper is to provide a carefully considered response to the use of humanistic mindfulness. Social workers need to explain why they recommend mindfulness, and explore culturally consistent and sensitive practice, so that they are abiding by the Australian Association of Social Workers Code of ethics.

IMPLICATIONS

• The use of mindfulness in social work practice requires careful consideration as to its impact and relevance to clients’ needs.

• Mindfulness originates in philosophical traditions distinct from mental health treatment.

• In choosing to use mindfulness social workers require consistent and sensitive understanding of clients’ needs, world views, and culture.

     

Bullying and Victimization Among Young Elementary School Children: The Role of Child Ethnicity and Ethnic School Composition

School-aged children with an ethnic minority background are relatively often involved in bullying and victimization, but the role of ethnic composition of schools in this context remains unclear. This study examined the relation between ethnic minority background, ethnic school composition, and bullying behaviour around primary school entry in the Netherlands. The study was based on a 2008/2009 school survey in Rotterdam, a Dutch city where about 50 % of children have a non-Dutch background. For 8523 children, teacher reports of bullying behaviour at age 5–6 years were available. Children with a non-Dutch background had higher odds of being a victim (adjusted OR 1.41, 95 % CI 1.11, 1.80), bully (OR 1.38, 95 % CI 1.20, 1.58) or bully-victim (OR 1.38, 95 % CI 1.19, 1.62) than children of Dutch national origin. Ethnic diversity in schools increased children’s risk of bullying behaviour (e.g. OR_victim per 0.1 increase in 0–1 diversity range = 1.06, 95 % CI 1.00, 1.13), with children of both Dutch and non-Dutch national origin relatively more often involved in bullying in ethnically diverse schools. The proportion of same-ethnic peers in school reduced the risk of bullying among children of Dutch national origin (e.g. OR_victim per 10 % more same-ethnic children = 0.90, 95 % CI 0.83, 0.98), but not among non-Dutch children. In conclusion, ethnic minority background and ethnic diversity within schools are risk factors for bullying among 5–6 year olds. Plausibly, reductions in absolute numbers of bullying events may be obtained with tailor-made interventions in ethnically diverse schools. Such interventions should preferably be offered early in the school curriculum.     

Zur Exploration statistisch gut angepasster Latent-Class-Modelle durch Homogenitätsanalyse

With this article, an attempt is made to combine both confirmatory and exploratory analysis. It is argued that confirmatory and exploratory approaches have to complement one another. As an example for confirmation latent-class-models are estimated for 3 variables which are supposed to measure a latent dimension “attitudes towards integration — segregation of the mentally ill”. Employing a 3-, and a 4-class solution it can be shown that exclusively looking on the model fit is not sufficient. Since both models fit equally well, both the membership-probabilities and the category-probabilities for each class are inspected. By means of homogeneity-analysis within the latent classes, the interpretation of deviations from the model assumptions is facilitated considerably. It is shown that very special and rare responsepattern may question a straightforward interpretation of a simple parsimonious model.     

Ethnic segregation in context: Social discrimination among native Dutch pupils and their ethnic minority classmates

Social discrimination, defined as the relative preference for intra-ethnic over inter-ethnic relationships, was studied in pupils’ networks in Dutch secondary school classes. While native Dutch pupils (ethnic majority members) mainly named fellow majority members, ethnic minority members reported ties with as many majority as minority members. Considering the ethnic composition of the classroom, however, majority members discriminated less than minorities. No strong effect of classroom ethnic composition on social discrimination was found, whereas neighborhood composition was shown to clearly influence social discrimination: ethnic minority members were more, and majority members less inclined to discriminate in neighborhoods with more ethnic presence.     

A framework for the comparison of maximum pseudo-likelihood and maximum likelihood estimation of exponential family random graph models

The statistical modeling of social network data is difficult due to the complex dependence structure of the tie variables. Statistical exponential families of distributions provide a flexible way to model such dependence. They enable the statistical characteristics of the network to be encapsulated within an exponential family random graph (ERG) model. For a long time, however, likelihood-based estimation was only feasible for ERG models assuming dyad independence. For more realistic and complex models inference has been based on the pseudo-likelihood. Recent advances in computational methods have made likelihood-based inference practical, and comparison of the different estimators possible.     

The effects of direct experience on consumer product evaluation

The effects of different sales strategies on consumer product evaluation were investigated. It was expected that direct product experience could decrease economic product valuation. Experiments 1 and 2 studied the effects of product trials and money-back guarantees on consumer willingness to pay (WTP). It appeared that WTP was significantly lower after a product trial than with a money-back guarantee or normal sale. In Experiment 3 a structural equation model showed that product trials had a positive effect on attitude toward the product. Also, a negative effect on WTP was found when the effect was measured directly, but a positive effect when the effect was measured indirectly (through attitude).     

Strategies and cues adolescents use to assess the age of an online stranger

A common risk among adolescents is sexual solicitation, in which an adolescent is asked to provide sexual information, engage in sexual talk, or in sexual activities. Although scholars increasingly address this topic from an intrapersonal perspective, there is little attention to factors of language use and message content. In two focus group studies, we investigated whether adolescent girls consider themselves capable of assessing whether an online stranger is an adult or a peer, the extent to which adolescent girls actually succeed in making this assessment, the strategies they apply to do so, and the content- and language-related cues focused on. Our findings suggest that most of the adolescent girls are confident in their ability to assess whether the stranger is a peer or an adult with possible sexual intentions. However, we also found that only 43% were able to correctly make this assessment. Most of the adolescents seem to apply the passive strategy of uncertainty reduction: They scan the profile page of the stranger, check contact information, and the profile picture. They may choose to apply the interactive strategy to find out more about the online stranger. Important content-related cues that alarm adolescent girls are: ignoring personal questions, showing an exaggerated amount of interest, acting as a friend, and being sexually oriented. Language cues mentioned related to word usage, abbreviations, sentence length, and tone.     

Cross Validation of the Gambling Problem Severity Subscale of the Canadian Adolescent Gambling Index (CAGI/GPSS) on a Sample of Ontario High School Students

This paper reports on the cross validation of the Gambling Problem Severity Subscale of the Canadian Adolescent Gambling Index (CAGI/GPSS). The CAGI/GPSS was included in a large school based drug use and health survey conducted in 2015. Data from students in grades 9–12 (ages 13–20 years) derived from the (N = 3369 students). The CAGI/GPSS produced an alpha of 0.789. A principle component analysis revealed two eigenvalues greater than one. An oblique rotation revealed these components to represent consequences and over involvement. The CAGI/GPSS indicated that 1% of the students fell into the “red” category indicating a severe problem and an additional 3.3% scored in the “yellow” category indicating low to moderate problems. The CAGI/GPSS was shown to be significantly correlated with gambling frequency (r = 0.36), largest expenditure (r = 0.37), sex (more likely to be male) (r = ?0.19), lower school marks (r = ?0.07), hazardous drinking, (r = 0.16), problem video game play (r = 0.16), as well as substance abuse. The CAGI/GPSS was cross validated using a shorted version of the short SOGS, r = 0.48. In addition the CAGI/GPSS and short SOGS produced very similar patterns of correlations results. The results support the validity and reliability of the CAGI/GPSS as a measure of gambling problems among adolescents.