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The authors use laboratory experiments to test two self-assessment tax mechanisms for facilitating land assembly. One mechanism is incentive compatible with a complex tax function, while the other uses a flat tax rate to mitigate implementation concerns. Sellers publicly declare a price for their land. Overstating its true value is penalized by using the declared price to assess a property tax; understating its value is penalized by allowing developers to buy the property at the declared price. The authors find that both mechanisms increase the rate of land assembly and gains from trade relative to a control in which sellers’ price declarations have no effect on their taxes. However, these effects are statistically insignificant or transitory. The assembly rates in our self-assessment treatments are markedly higher than those of prior experimental studies in which the buyer faces bargaining frictions, such as costly delay or capital constraints.

Local public officials rely on tax and non-tax incentive packages to develop their economies. No conclusive evidence supports the economic improvement incentives afford. We investigate, with an experimental approach, the political reasons public officials use tax incentives. The experiment uses simulation gaming to model local economic development as an auction, in that way permitting us to compare the impact that motives, goals, and contexts have on outcomes. Our findings suggest that the majority of economic development competitors fall victim to the “winner’s curse”-overestimating and overbidding the potential payoff for business development.

Examines the impact of the sugar tariff‐rate import quota programme on the United States economy. Uses a computable general equilibrium model composed of 14 producing sectors, 14 consuming sectors, six household categories classified by fincome, and a government. Examines the effects of abolishing the tariff‐rate import quota on sugar prices and quantities. Suggests that a complete elimination of the sugar programme would result in lower output by all producing sectors (by about $2.85 billion) but, for all producing sectors besides the agriculture programme crops, crude oil, and petroleum refining sectors, output would actually increase (by about $2.98 billion). There would also be an increase in the consumption of goods and services (by about $197 million), and an increase in welfare (by about $121 million). The government would realize a reduction in revenue of about $15 million. When subjected to a sensitivity analysis, the study′s results are reasonably robust with regard to the assumption of the value of the own‐price elasticity of demand for sugar – i.e., while the model′s equilibrium values do vary in response to different assumptions of the values of this elasticity, the fluctuations are not so enormous as to suggest that the model is unrealistically sensitive to these parameters.

This chapter explores a number of relatively unknown aspects of the controversy over Milton Friedman’s March 1975 visit to Chile through the analytical framework provided by James M. Buchanan’s late 1950s assessment of the economist-physician analogy. The chapter draws upon a range of archival and neglected primary sources to show that the topics which generally rear their head in any contemporary discussion of Friedman’s visit to Chile – for example, whether it is appropriate to provide policy advice to a dictator – were aired in a largely private mid-1970s exchange between Friedman and a number of professional associates. In particular, the controversy over Friedman and Chile began several months before Friedman arrived in Santiago.

A tax based on land value is in many ways ideal, but many economists dismiss it by assuming it could not raise enough revenue. Standard sources of data omit much of the potential tax base, and undervalue what they do measure. The purpose of this paper is to present more comprehensive and accurate measures of land rents and values, and several modes of raising revenues from them besides the conventional property tax.

The paper identifies 16 elements of land's taxable capacity that received authorities either trivialize or omit. These 16 elements come in four groups.

In Group A, Elements 1‐4 correct for the downward bias in standard sources. In Group B, Elements 5‐10 broaden the concepts of land and rent beyond the conventional narrow perception, while Elements 11‐12 estimate rents to be gained by abating other kinds of taxes. In Group C, Elements 13‐14 explain how using the land tax, since it has no excess burden, uncaps feasible tax rates. In Group D, Elements 15‐16 define some moot possibilities that may warrant further exploration.

This paper shows how previous estimates of rent and land values have been narrowly limited to a fraction of the whole, thus giving a false impression that the tax capacity is low. The paper adds 14 elements to the traditional narrow “single tax” base, plus two moot elements advanced for future consideration. Any one of these 16 elements indicates a much higher land tax base than economists commonly recognize today. Taken together they are overwhelming, and cast an entirely new light on this subject.

This paper's purpose is to investigate the claim that capital taxes imposed by a subnational government reduce the economic competitiveness of the geographic area in which these taxes are imposed.

A two‐region, four‐good, three‐factor computational general equilibrium model of the USA is constructed. Simulations are performed to represent US state governments replacing wage taxes with capital taxes.

Household utilities rose when wage taxes were replaced by capital taxes, contradicting the conventional wisdom that capital taxes are harmful to a region's residents.

As with all computational economic models, there are simplifications in this paper's model that abstract from reality and may limit the applicability of model results to the real world.

Subnational governments need not shy away from capital taxes when funding government programs.

This paper contributes to the investigation of subnational tax incidence.

This paper aims to provide a quantitative assessment of the broad economic effects of tax policy reform in the Kingdom of Saudi Arabia (KSA).

Using a dynamic computable general equilibrium (CGE) model of the KSA, three simulations are run. The first simulation is the baseline simulation, which generates growth paths of the Saudi economy in the absence of tax reform. In developing the baseline simulation, this study incorporates forecasts from the International Monetary Fund. The remaining simulations are policy simulations. A policy simulation deviates from the baseline simulation in response to a policy change. In the first policy simulation, this study introduces a value-added tax (VAT) that generates SAR 35bn. This study assumes budget neutrality with the additional tax revenue transferred to households via a lump sum payment. In the second policy simulation, this study introduces a corporate income tax that generates SAR 35bn. This study then calculates and compares the distortion these taxes introduce into the economy.

This study finds that although the introduction of new taxes increases government tax revenue, markets are distorted lowering efficiency and production. An introduction of VAT increases the cost of consumption relative to the cost of production. As a consequence, the real cost of labour increases lowering employment in the short run. Employment moves to the baseline, as wages adjust capital and real gross domestic product (GDP) is below base throughout the simulation period. The second simulation is an increase in the corporate tax rate with lowers the post-tax rates of return investors receive. This simulation shows that the negative impact on investment, capital and GDP is larger with the introduction of a corporate tax than with the VAT.

Literature focusing on tax policy reform in the Gulf Cooperation Council and, specifically, Saudi Arabia is limited. This paper contributes to the literature by focusing on the following: understanding the impact and mechanisms through which changes in taxation impact the economy more generally; understanding the potential harm caused to allocative efficiency and production due to taxes; and ways in which fiscal reform might complement other reforms such as efforts to diversify the economy, labour market and energy price reforms. This improves the information base available to policymakers charged with designing an optimal tax system that meets all future requirements of a country such as the KSA.

The authors developed and applied a CGE model for the KSA to analyse the impact of VAT and corporate tax on the Saudi economy. To the best of the authors’ knowledge, there are no recent CGE models for Saudi Arabia that have been used for tax policy or quantifying the potential harm to the economy when new taxes are introduced.

The fundamental problem of designing a wide scope general revenue tax can be reduced to the selection of the base used for administering the tax. Our current personal income tax is a hybrid version of a tax assessed on the basis of a tax unit's annual income receipts. An alternative to an income‐based tax that has received much theoretical treatment but little actual application is an expenditure‐based tax. An expenditure tax (also called a consumption tax or cash flow tax in the context of this paper) differs from an income tax in that it exempts net saving and investment from the tax base. Though the details of a consumption tax design are discussed more fully elsewhere in this paper, the tax base of an expenditure tax is roughly determined by subtracting net savings from gross receipts (including wages, tips, salaries, income from investments, interests, etc.). Withdrawals from savings constitute dissavings and are appropriately included in net savings. The cash flow tax, with wealth transfers deductible to the donor and included in the tax base of the recipient, would be a tax on an individual's standard of living. Similar to the present income tax standard deduction, some universal credit or exemption for a small level of consumption could be allowed.