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This paper uses two studies to examine taxpayers' knowledge of tax incentives for charitable giving and also explores the consequences of this knowledge on charitable giving decisions. The first study surveys 600 US taxpayers to establish a baseline understanding of how making a charitable contribution affects taxpayers. In the second study, we conduct an experiment with 201 US taxpayers in which we manipulate the knowledge of taxpayers by providing an educational intervention; we also measure, if, how much is donated in a hypothetical scenario under various tax deductibility conditions. The first study indicates fewer than half of participants understand the basic principles of how charitable donations affect tax liability. Our second study reveals that a short educational video is extremely effective at improving taxpayers' understanding and helping them accurately estimate the tax benefit associated with charitable giving. However, through moderated mediation analysis, we also show that participants who received this educational intervention and accurately estimated the tax benefits in turn decreased their charitable giving. We conclude that the majority of US taxpayers do not understand whether they benefit from certain deductions and may be overestimating the benefit they receive from charitable giving, resulting in giving more than they intend.

In this study, we examine the impact of audit protection services on individual taxpayer decision making. Audit protection services provide additional support for taxpayers in the event of an audit including preparation and representation. While these services could provide taxpayers with additional confidence, such services could also foster greater reliance on tax software, possibly resulting in riskier tax decisions. Drawing on risk homeostasis theory, we investigate two factors that could affect taxpayer reliance: the amount of taxes owed and the extent of audit protection services. Our results indicate that taxpayers are more likely to rely on tax software prompts when there are full audit protection services and a greater amount of taxes owed. Further, we find that the provision of full audit protection services reduces the likelihood that taxpayers change their tax reporting behavior. Collectively, we provide evidence on taxpayer interactions with tax software.

This study examines contextual influences on taxpayers’ perceptions of a vague “low” probability of detection and the relationship between taxpayers’ perceptions and their likelihood to take questionable tax deductions. As such, we tie psychological theories that explain differential interpretations of qualitative probability phrases (base rate and support theories) to the taxpayer perception literature. Consistent with our hypotheses, taxpayers’ interpretations of “low” differ both between and within subjects, depending on the context in which deductions are presented. On average, our taxpayer subjects are less likely to take questionable deductions perceived to have a higher probability of detection than those perceived to have a lower detection probability. Our results contribute to existing literature by demonstrating that knowledge of subjects’ assessments of an event's probability is integral to designing experiments and drawing conclusions regarding observed behavior. This appears necessary even when researchers provide assessments of detection probabilities and/or employ scenarios for which systematic differences in probability perceptions are not inherently obvious.

The optimal payment in the whole operation and maintenance period of water environment treatment PPP projects has become the main approach to realize sustainable development of projects. This study is aimed at constructing an effective payment model for the whole life period of projects to achieve win-win among all stakeholders, so as to provide a theoretical reference and managerial implications for the public sector in the whole operation and maintenance period.

In the whole operation and maintenance period of water environment treatment PPP projects, this article investigates how the public sector optimizes the payment in the whole operation and maintenance period of projects. Firstly, the projects' whole operation and maintenance period is divided into several stages according to the performance appraisal period. And then, the multi-stage dynamic programming model is constructed to design the payment construct model for the public sector in each performance appraisal stage. The payment from the public sector is the decision variable, and the deduction from the private sector is a random variable.

The optimal payment model showed that the relatively less objective weight of public sector leaded to its relatively more total payment and vice versa. Therefore, the sustainable development of the projects can only be ensured when the objective weights both of them should be balanced. Additionally, the deduction from the performance appraisal of private sector plays an important role in the model construction. The larger deduction the private sector undertakes, the smaller profits private sector has. Since the deduction at each stage is a random variable, the deduction varies with the different probability distributions obeyed by the practical deduction in each stage.

The findings from this study have provided theoretical and application references, and some managerial implications are also given. First, the improvement of the pricing system of public sector should be accelerated. Second, the reasonable profit of the private sector must be guaranteed. While pursuing the maximization of social benefits, the public sector should make full use of the price sharing mechanism in the market and supervise the real income situation of the private sector. Third is increasing the public to participate in pricing. Additionally, it is a limitation that the deduction is assumed to conform to a uniform distribution in this study. Other probability distributions on deduction can be essentially further sought, so as to be more line with the actual situation of the projects.

The optimal payment in whole operation and maintenance period of the projects has become an important issue, which is a key to project success. This study constructs a multi-stage dynamic programming model to optimize payment in the whole period of projects. Additionally, this study adds its value through deeply developing the new theories of optimal payment to more suitable for the practical problems, so that to optimize the design of payment mechanism. Meanwhile, a valuable reference for public and private sectors is provided to ensure the sustainable development of the projects.

An Act to amend the law relating to benefit under the Ministry of Social Security Act 1966 and to certain benefits under the National Insurance Act 1965 and the National Insurance (Industrial Injuries) Act 1965; to increase the penalties for failure to pay contributions under the said Acts of 1965; to abolish local advisory committees under the said Act of 1966; and for purposes connected with those matters. [5th August 1971]

This paper investigates whether China's R&D tax deduction policy triggers firms to manipulate their R&D expenditures upward.

This paper employs the ratio of actual tax savings as a proxy for the benefits of the R&D tax deduction policy based on manually collected and systematically cross-checked data. The relationship between tax benefits and abnormal R&D spending is estimated in a sample of Chinese A-share listed companies for the period 2007–2018.

The findings suggest that tax deductions lead to positive abnormal R&D spending and that this deviation in R&D spending may be attributed to firms' upward R&D manipulation for tax avoidance. The results also indicate that this behavior is more significant for the period after the policy revision, in non-HNTEs (high and new technology enterprises), and in firms with a high ratio of R&D expenses.

It is difficult to establish a sophisticated and unified model to identify the specific strategy of upward R&D manipulation that firms use to obtain tax benefits.

Managers should take into account upward R&D manipulation when designing governance mechanisms. Policymakers in developing countries may further pursue preferential tax policies that cover every stage of innovation activities gradually; the local provincial governments need to leverage their proximity and flexibility advantages to develop a tax collection and administration system.

This study contributes to the understanding of the complex effect of R&D tax incentives and helps more fully illuminate firms' upward R&D manipulation behavior from the perspective of tax planning strategies, which are underexplored in previous research.

The purposes of this paper are to determine the financial, structural, and tax policy factors that influence the probability of buying machinery and the intensity of the machinery purchases on North Dakota farming operations.

A double hurdle model was used to estimate the two decisions: purchasing machinery and the intensity of the machinery purchase. Data were collected from the North Dakota Farm and Ranch Management Business Association Annual Summaries for 1993-2011.

Results demonstrated that the tax incentive provided by Section 179 deduction had the largest positive effect on machinery purchases when compared to operating profit margin, leverage ratio, producer type, and experience of the principal operator of the farm.

Section 179 deductions have changed substantially over the 19-year period studied and have not been analyzed in previous machinery investment work. This analysis puts a numerical value on the effect of Section 179 deductions over time and demonstrates the large effect tax incentives have on machinery purchase decisions and levels.

The purpose of this paper is to examine the use of accelerated depreciation deductions, which includes Section 179 and bonus depreciation, taken in the first year of asset life by Michigan farms. The frequency, value and influence of accelerated depreciation on farm investment are also analyzed.

Accrual adjusted income statements, balance sheets, depreciation schedules, and income tax information for 66 Michigan farms from 2004 to 2014 provide data for the analysis. The present value of the accelerated deduction and change in the cost of capital were calculated. Finally, investment elasticities were used to arrive at the change in investment due to accelerated depreciation.

Accelerated depreciation was utilized across all applicable asset classes. Section 179 was used more often than bonus depreciation in part because it was available in all the examined years. Based on actual farm business use, accelerated depreciation lowered the cost of capital for the operations resulting in an estimated increase in investment of 0.27 to 11.6 percent depending on asset class.

The data utilized are of a detail not available in previous investigations which used either aggregate data or estimated rather than the observed use of accelerated depreciation. This analysis reveals that accelerated depreciation as used by commercial farms lowers the cost of capital and thus encourages investment particularly in machinery and equipment.

We use the 1995 IRS Public Use Tax File in simulation models to examine the factors associated with the widely anticipated growth in the alternative minimum tax (AMT). The evidence suggests that the changes in the marginal tax rate structure associated with the 2001 and 2003 tax legislation are likely to result in exponential growth in AMT incidence and create a substantial hidden marriage tax penalty, a result contradictory with the intent of these tax law changes. The evidence further suggests that the elimination of preferential long-term capital gain rates for the AMT could effectively fund structural changes in the AMT that would substantially reduce the impact of the AMT on middle and lower income taxpayers, many of whom are liable for the AMT due to the add-back for AMT purposes of such non-tax preferential items as Schedule A adjustments and personal and dependency exemptions.

Governments often encourage charitable giving through the tax system, by a deduction or tax credit. In 1988, Canada moved from a deduction system to a tax credit system. The tax credit for donations above $250 was calculated at the highest tax rate, even if the taxpayer was at the lowest tax rate. This gives what can be called a “superdeduction.” At the same time, the top rate of tax was reduced. Thus, the cost of giving was reduced for the lower taxpayers and increased for the higher-income taxpayers.

The article reports whether taxpayer behavior changed from 1986 (pre reform) to 1988 and 1992 (post reform). The analysis also investigates the influence of inflation on the charitable donations. The percentage of taxpayers giving over $250 was analysed for both all the taxpayers and those consistently in the low and high tax brackets. The lower-income taxpayers were found to reduce their giving, contrary to expectations. The middle-income taxpayers, in general, increased their giving, which was expected and so took advantage of the superdeduction. The results of the moderate high-income taxpayers were mixed. Taxpayers who had very high incomes decreased their giving, as was expected.