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The purpose of this study is to enhance the estimation of vertical and horizontal inequity within property valuation. Property taxation is a crucial source of finance for local government around the world – based on a presumptive tax base underpinned by estimates of property value, inaccurate real estate valuations used for such ad valorem or value-based property tax calculations potentially lead to a variety of costs, both financial and other, for tax payers and governments alike. More common are increased costs in time, staff and, in some cases, legal fees. Some governments are even bound by acceptability thresholds to promote fairness, equitability and overall government accountability with respect to valuation.

There exist a number of vertical inequity measurements that have undergone academic testing and scrutiny within the property tax industry since the 1970s. While these approaches have proved successful in detecting horizontal and vertical inequity, one recurring disadvantage pertains to measurement error/omitted variable bias, stemming largely from a failure to accurately account for location. A natural progression within property tax research is the application of a more spatially local weighted modelling approach to examine vertical and horizontal inequity. This research, therefore, specifies a geographically weighted regression (GWR) methodology to detect and measure vertical inequity in property valuations.

The findings show the efficacy of using more applied spatial approaches for vertical tax estimation and indeed the limitations of employing conditional mean estimates coupled with delineated boundaries for assessing property tax inequity. The GWR model findings highlight the more fluctuating nature of vertical inequity across the Belfast market for the apartment sector both in a progressive and regressive sense and at different magnitudes. Moreover, the results reveal spatial clustering in the effects and are indicative of systematic inequities related to location inferring that spatial (horizontal) tax inequities are not random. The findings further show increased GWR model predictability overall.

This research adds to the existing literature base for evaluating both vertical and horizontal inequity in value-based property taxation at the intra-neighbourhood level. This is accomplished by modifying the Birch–Sunderman approach by transforming the traditional OLS model architecture to a GWR model, thereby allowing coefficient estimates of inequity to vary not only across a jurisdiction, but also at a more local level, while incorporating property characteristic variables. This arguably allows assessors to identify specific geographical areas of concern, saving them money, time and resources on identifying, addressing and correcting for inequity.

Dissatisfaction with the current federal tax system is fostering serious interest in several tax reform plans such as a value-added tax (VAT), a flat tax, and a national retail sales tax. Recently, one of the former Republican presidential candidates, Herman Cain, initiated a 999 tax plan. As illustrated on Cain’s official website, the 999 plan intends to replace current federal taxes with a 9% business flat tax, a 9% individual flat tax, and a 9% national sales tax. We examine the distributional effects of the 999 tax plan, as well as the current system it intends to replace, under both annual income and lifetime income approaches. Global measures of progressivity and bootstrap-t confidence intervals suggest that the current federal tax system is progressive while Cain’s 999 tax plan is regressive under the annual income approach. Under the lifetime income approach, both the current federal tax system and Cain’s 999 tax plan show progressivity. However, the current federal tax system is more progressive. The findings in this study suggest that Cain’s 999 tax plan should be considered more seriously and further analysis of the 999 tax plan is warranted.

This paper aims to evaluate the progressivity of health-care financing in Egypt by assessing all five financing sources individually and then combining them to analyze the equity of the whole financing system.

Lorenz dominance analysis and Kakwani progressivity index were applied on data from 2010/2011 Household Income, Expenditure, and Consumption Survey and the National Health Accounts 2011 using Stata to evaluate the progressivity of each source of health-care finance and the financing system overall.

The data show that Egypt’s health-care system, which is largely financed by out-of-pocket (OOP) payments, is slightly regressive, with an overall Kakwani index of −0.079. The overall regressive effect was the result of three regressive sources (OOP payments, an earmarked cigarette tax and direct taxes), one proportional finance source (social health insurance) and two slightly progressive sources (indirect taxes and private health insurance). This shows that the burden of financing health care falls more on the poor. These results signal the need for reform of health-care financing in Egypt to reduce dependence on OOP payments to achieve more equitable financing.

The paper seeks to augment the literature on health-care financing in Egypt by calculating specific progressivity estimates for all five sources of financing the Egyptian health-care system and analyzing the overall equity of this financing system. It will, therefore, provide a benchmark for monitoring the equity of finance in the Egyptian health-care system in future studies and allow one to assess the impact of implemented financing reforms in the future on the level of progressivity of health system financing.

The retail sales tax has provided a strong foundation for American state government finance since its beginnings in the Great Depression. However, its position as a productive, reliable, and administrable revenue source is now under challenge from three forces. First, it continues as a tax primarily on purchases of tangible personal property, despite the shift in consumption toward services. Second, the physical presence rule for taxation of sales by remote vendors creates an intolerable imbalance between local and remote sellers. And third, legislatures keep gnawing away at the base with politically attractive but fiscally unjustifiable exemptions. In total, the position of the sales tax as a viable and defensible revenue alternative is at risk.

The importance of local government within the UK has never been stronger, and this has direct implications as to the most appropriate method of financing this level of government. The council tax in Great Britain and traditional domestic rates in Northern Ireland represent the two primary sources of local government finance based on domestic property, which currently require significant reform. Weaknesses of the existing systems include the lack of buoyancy due to infrequent revaluations, horizontal and vertical inequities and the need to ensure that domestic property tax systems are seen to be fair. The paper makes a number of important recommendations which would enhance the acceptability and ultimately improve the operation of these forms of ad valorem taxation.

Using data obtained from the National Conference of State Legislatures (NCSL), we investigate modifications in state tax codes to determine their characteristics, the apparent trends of state tax reform, and whether changes constituted comprehensive reform or mere incremental adjustments to existing tax structures. Based on the data, we find that few states achieved comprehensive tax reform in the 1990s despite the fiscal surplus that provided an environment conducive to widespread change. Moreover, we find that a significant number of changes that were enacted in the 1990s involved increases or decreases in state tax revenue that were ultimately tied to economic cycles. We suggest that adequacy in state tax collections may be the most common tax principle adhered to with regard to changes in tax structure. We also conclude that reform efforts in the 1990s were most successful when approached in an incremental fashion in the absence of a significant precipitating reform driver.

Purpose – The concept of equality of opportunity (EOp) goes back to Roemer (1993, 1998) who argues that a society should guarantee its members equal access to advantage regardless of their circumstances, while holding them responsible for turning that access into actual advantage by the application of effort. First, this chapter investigates how family background influences income acquisition in 17 European countries. Second, it particularly scrutinizes how governments affect EOp through redistributive policies.

Methodology – We apply two different methods in order to measure EOp: the Gini opportunity index defined by Lefranc et al. (2008) and a parametric estimation method. Effective redistribution is measured via income concepts at different stages of the tax-and-transfer schemes.

Findings – We find clear country clustering in terms of EOp for Nordic, Continental European, and Anglo-Saxon countries. For Eastern Europe our results are less definitive. By examining the impact of redistributive policies in the countries under analysis, it can be concluded that both taxes and transfers reduce inequality of opportunity (IOp), with social benefits typically playing a key role. Furthermore, the equalizing impacts of the tax-benefit system on IOp differ substantially from the ones observed in the traditional notion of inequality of outcomes.

Originality – We systematically compare two approaches used to identify the extent of EOp. Our results reveal that both methods yield rather robust country rankings for various circumstance sets. Furthermore, the impact of tax-benefit policies on EOp is rarely addressed in the existing literature. We contribute by focusing on effective redistribution directly related to different income concepts.

We adopt a standard distributional impact methodology, based on Atkinson's cost of inequality approach, to estimate the degree of implicit redistribution created through public funding of health insurance in Canada. The first stage of the exercise is to determine the public health insurance benefits received by families of various age and composition and to add these to measured after-tax incomes. In our base case, which uses the Atkinson Mean Logarithmic Deviation as inequality index, we find that accounting for public health insurance benefits implies a reduction in inequality equivalent to 2.4% of per capita income. We then model the implications of moving to a hypothetical fully privatized system while proportionately refunding to individuals the tax revenues saved in doing so. This would give rise to a further 2.4% equivalent per capita income reduction resulting from increased inequality in the distribution of after-tax income. Thus, for this scenario, moving from public financing of health insurance in Canada to a fully privatized system implies an overall increase in inequality equivalent to a loss of 4.8% of per capita income. This corresponds to an increase of about 25% in existing inequality. Not surprisingly, the impact of publicly financed health insurance in reducing inequality is strongest for the elderly.

This is the first report on estimates of tax compliance costs of Malaysian companies. Compliance cost is an unavoidable cost of doing business and arises from activities associated with the reporting of income for tax purpose. The average compliance cost per company was estimated to be RM68,836, which is RM0.26 per RM 1,000 sales turnover. Sixty‐one percent of compliance cost was incurred in computation‐related activities and 39 percent in tax planning activities. Measured relative to revenue, the compliance cost is higher for smaller companies than for larger companies, which suggests that compliance cost is regressive, a finding similar to those reported in other countries.

This paper investigates the impact of state governments’ “Tax and Expenditure Limits” (TELs) on their tax progressivity and redistributive spending. A two stage least squares (2SLS) regression model of data covering 1985-2007, was employed to allow for simultaneity in the relationships between intergovernmental transfer, tax progressivity, expenditure progressivity, and labor mobility. This model tested whether high- or low income residents had paid for and benefited from these fiscal institutions. As a result we find that TELs significantly decrease tax progressivity and increase poverty rate. These two policy effects should be explicitly accounted for in the design or revision of TELs.