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Some personal income tax breaks reward socially approved activities, others serve the interests of tax administrators and special interest groups. All give rise to classical HI. We allow for the categorization of tax breaks into deserving and undeserving types, and pose a “modified HE” requirement which legitimizes the former. Deserving breaks result in a loss of VE, non-deserving ones in (modified) HI. The equity cost of each tax break can be assessed. For the U.S. personal income tax, modified HI is potentially a lot smaller than classical HI: e.g. the charitable giving tax break alone in 1990 accounted for 44% of classical HI.

Research has shown that the tax treatment of replacement incomes differs considerably among countries. Consequently, the ranking of countries by expenditure level is different for gross and net social expenditures. On a micro level this is translated into a gap between gross and net benefits; this gap varies among countries. In this chapter, we use EUROMOD for an international comparison of the difference between gross and net benefits at the micro level. We investigate the distribution effects of the income tax treatment of replacement benefits, focusing on old-age pensions and unemployment benefits. We present a summary overview of the different ways of levying taxes on benefits in the pre-2004 EU-15 countries. We then try to answer the question how the tax treatment of social security benefits affects the distribution of these benefits and how progressive taxes on benefits are compared to taxes on earnings.

The Internal Revenue Code of the U.S. as well as income tax statutes in a number of states contain provisions that penalize some married couples by virtue of their marital status. These families have greater tax liabilities than would apply if the husband and wife divorced. At the same time, other married couples benefit from reduced taxes made possible by the income splitting provisions of the laws. Thus, some families receive tax benefits and others are penalized as a consequence of the choice to be married. There is now much discussion in Washington and state capitals of reducing and possibly eliminating the so-called “marriage tax”. Most proposals for reform retain the income splitting provision of the tax code; thereby avoiding direct harm to families currently receiving tax benefits from marriage. This is the approach adopted in this paper.

First, the purpose of this paper is to present the recent changes in the treatment of tax credits arising from expenses related to environmental protection made by Portuguese individuals. Second, it aims to assess whether the corporate income tax treatment of provisions for environmental expenses is a force for stimulating environmentally conscious investments by firms or, because of the divergence between accounting and tax computation of such expenses, it is a discouraging factor.

The paper is based on the analysis of tax policy choices, in terms of the individual income tax and the corporate income tax, and its potential impact on environmentally related economic decisions.

In the personal income tax area, the severe restrictions applied to some tax credits, due to the Portuguese public finance situation, brought limitations to some environmentally related deductions, but spared the most relevant one, judging by the amount of credit. A positive discrimination was thus granted to this credit. In the area of provisions for environmental expenses, the recently changed Portuguese corporate tax code cannot be seen as environmentally friendly, especially if the accounting recognition of these costs is compared with its tax treatment. Fiscal policy imposed here is a disadvantageous tax regime.

The study shows that the tax policy decision makers are sending mixed signals to economic agents. If the environment is a priority for policy makers, then a more coherent tax policy could be devised.

The paper can be a relevant contribution for a better assessment of tax policy choices regarding the impact on environmentally related decisions by individuals and firms. The inducements (or penalties) of different polices are highlighted, and policymakers can find a framework for a more rational analysis of policy options.

Argues the case for reform of US tax codes from a feminist viewpoint. “The household” and “the individual” are falsely distinguished in the tradition of taxing only adult male breadwinners ‐women being engulfed in “the household”. Describes recent analysis of human identity in terms of separation and connection. Suggests tax structure be based on persons‐in‐relation: an individual earner plus his or her dependants.

The purpose of this paper is to provide a comparative analysis on the regulation, the applicable law and the tax treatment in the operations of NPOs in developing countries.

A comparative analysis in term of NPOs legal framework governing the formation, existence, restriction and fundraising of NPOs, as well as the tax treatment for the NPOs.

The findings suggest that regulations of NPOs in these countries exhibit a mixed picture with respect to the establishment, operation, affiliation and fundraising, as well as their tax incentives and preferences. In some countries, NPOs have fewer restrictions and are eligible for generous tax incentives, while for other countries, various restrictions and lack of incentives are the norms. The legal frameworks for NPOs are burdensome and, to some extent, do not reflect the importance of NPOs as partner for development of society. The findings also suggest that tax treatments in these countries vary from simple to complex coupled with obscure tax exemptions rules.

Around the globe, authorities and society are increasingly acknowledging the important role of NPOs in dealing with social needs from basic poverty, health and sustainable environments. This study’s focus on NPOs regulation will provide an understanding for authorities to design an appropriate framework for the growth and vibrancy of the NPOs.

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely, classical HI and reranking. We propose in this paper a class of ethically flexible tools that integrate these two strands. This is achieved using a measure of inequality that merges the well-known Gini coefficient and Atkinson indices, and that allows a decomposition of the total redistributive effect of taxes and transfers into a vertical equity effect and a loss of redistribution due to either classical HI or reranking. An inequality-change approach and a money-metric cost-of-inequality approach are developed. The latter approach makes aggregate classical HI decomposable across groups. As in recent work, equals are identified through a non-parametric estimation of the joint density of gross and net incomes. An illustration using Canadian data from 1981 to 1994 shows a substantial, and increasing, robust erosion of redistribution attributable both to classical HI and to reranking, but does not reveal which of reranking or classical HI is more important since this requires a judgement that is fundamentally normative in nature.

The South African Government needs to increase fiscal revenues to cater to increased government spending. This paper aims to argue that the South African Revenue Service (SARS) has an opportunity to tax the receipt of customer loyalty programme awards in the hands of customers, with little amendment to current tax legislation or administration. This provides the South African Government an opportunity to increase much needed tax revenue in spite of limited resources.

Five instrumental case studies were used and analysed from a financial reporting perspective to quantify customer loyalty points earned by customers. These can form a basis for deriving the potential benefits from the taxation of customer loyalty programmes in the retail industry. The multiple instrumental case studies used and the application of accounting guidance in International Financial Reporting Standards allow generalisations to be made to highlight the amount of customer loyalty awards granted and possible tax revenues forgone in just one sector of the South African economy.

Should the proposals for taxation of customer loyalty programmes be implemented, the fiscus would be able to collect over R 234.35m (US$16.91m) in tax revenue from only five companies providing customers with loyalty awards. This indicates that this proposal for taxation is critical for investigation by the South African Government, as it may aid in achieving revenue goals for South Africa.

This paper contributes to the literature on taxation legislation within South Africa by proposing a model that may be used by the SARS to increase tax revenues to meet the Government’s needs.

Policy makers have long been interested in whether tax policies can be used to encourage entrepreneurial activity, but prior studies have produced ambiguous results. The purpose of this paper is to investigate whether tax rates affect the decision to begin a new entrepreneurial venture.

The paper uses a 12-year panel of tax return data to examine the effects of tax rates on entrepreneurial entry. The paper calculates household-level tax rates and employ multiple measures of entrepreneurship.

The results offer evidence that cuts in relative tax rates faced by entrepreneurs, either in the form of higher rates for wage workers or lower rates for entrepreneurs, increase entry. The magnitudes of these effects suggest that an across the board tax cut would increase entry.

These results suggest that policy makers interested in entrepreneurial activity should account for the affects of tax policies on entrepreneurial activity in their decision making.

The data represent the most accurate publicly available tax information. We expand on previous work by recognizing that many entrepreneurial households also receive wage-and-salary income and addressing whether the effects differ by degree of entrepreneurship (e.g. full-time vs part-time). The analysis of households also includes a broader set of entrepreneurs than prior work, which has typically limited the sample to working-age male household heads. Ultimately, the paper finds robust results suggesting an effect opposite from much of the previous literature, but consistent with recent evidence on entrepreneurial exit decisions.