Taxing Mobile Capital with Labor Market Imperfections

Taxing internationally mobile factors of production has been dismissed as an inefficient means of raising tax revenue. This paper addresses the question of whether it is efficient to tax capital at source when labor markets and the taxation of lumpsum income suffer from imperfections. Four reasons for taxing capital are identified: (i) institutional constraints rendering any taxation of profit income infeasible; (ii) market power in the demand for labor; (iii) market power in the supply of labor if it increases with the employment of capital; (iv) unemployment benefits that are not tied to net real wages. It is argued that the case for taxing capital is not particularly strong. By reinterpreting capital as energy the results are applicable to the discussion about ecological tax reforms.Optimal taxation, factor mobility, labor market imperfections, ecological tax reform

Teacher quality and incentives - Theoretical and empirical effects of standards on teacher quality

Applying the theory of yardstick competition to the schooling system, we show that it is optimal to have central tests of student achievement and to engage in benchmarking because it raises the quality of teaching. This is true even if teachers’ pay (defined in monetary terms) is not performance related. If teachers value reputation, and if teaching output is measured so that it becomes comparable, teachers will increase their effort. The theory is tested using the German PISA-E data. Use is made of the fact that central exams exist in some federal states of Germany but not in all. The empirical evidence suggests that central exams have a positive effect on the quality of teaching.

Possibilities and limitations of protein supply in organic poultry and pig production

Organic poultry and pig production has to face severe restrictions in the availability of feedstuffs of high quality protein. The objective of the project was to assess by meta-analysis of the literature whether the restrictions can be compensated by others measures without jeopardizing the goal of a high level of product- and process-related quality. Calculations showed that, in general, it is possible to formulate diets for poultry and pigs without the use of non-organic feedstuffs. However, there is a huge variation between farms on the local, regional or national level in their ability to provide organic diets. Several measures are outlined that are at the organic farmer's disposal to adapt to the restricted availability of high protein feedstuffs. The risk of the occurrence of diseases and welfare problems in organic livestock production due to suboptimal nutrient provision by the farmer is compa-rably low, and can be handled by a proper manage-ment. Intensification of meat production, however, encloses a system-related increase in the risks of animal health disorders. From the animal health and welfare point of view, organic farming should be protected towards the negative side effects of an intensified meat production by setting limits with respect to the intensification process

Education: Optimal Choice and Efficient Policy

The research on earnings determination is based on the Mincer-Becker assumption that individuals decide on schooling by maximizing income. This paper offers an alternative and less restrictive approach based on utility maximization. Using this approach, we analyze the efficiency of education policy in Ramsey’s tradition. Distortive wage taxation is shown to provide an efficiency reason for subsidizing education in effective terms. Second-best policy is confronted with empirical evidence for OECD countries

Taxing Mobile Capital with Labor Market Imperfections

Taxing internationally mobile factors of production has been dismissed as an inefficient means of raising tax revenue. This paper addresses the question of whether it is efficient to tax capital at source when labor markets and the taxation of lumpsum income suffer from imperfections. Four reasons for taxing capital are identified: (i) institutional constraints rendering any taxation of profit income infeasible; (ii) market power in the demand for labor; (iii) market power in the supply of labor if it increases with the employment of capital; (iv) unemployment benefits that are not tied to net real wages. It is argued that the case for taxing capital is not particularly strong. By reinterpreting capital as energy the results are applicable to the discussion about ecological tax reforms

Teacher Quality and Incentives: Theoretical and Empirical Effects of Standards on Teacher Quality

Applying the theory of yardstick competition to the schooling system, we show that it is optimal to have central tests of student achievement and to engage in benchmarking because it raises the quality of teaching. This is true even if teachers’ pay (defined in monetary terms) is not performance related. If teachers value reputation, and if teaching output is measured so that it becomes comparable, teachers will increase their effort. The theory is tested using the German PISA-E data. Our estimates suggest that, despite the flat career profile of German teachers, the quality of teaching tends to be higher in federal states with central exams.education, teacher quality, central examinations, yardstick competition, matching

Collusive Tax Evasion and Social Norms

Although collusive tax evasion by buyers and sellers of commodities and also by employers and employees is widespread all over the world, it has rarely been analyzed in the tax evasion literature. To fill this gap and to compare collusive tax evasion with independent tax evasion, this paper develops a simple non-cooperative game-theoretic model and confirms the model's predictions in a laboratory experiment. Because collusive tax evasion involves social interaction, this paper focuses on the effect of social norms and theoretically and empirically demonstrates that the tax compliance norm has a stronger negative effect on the magnitude of collusive tax evasion than on independent tax evasion. The reason for this result is that in a collusive tax evasion game with multiple equilibria social norms act as an equilibrium selection device, whereas social norms need to be internalized to change the behavior of taxpayers who evade taxes unobservedly

Strictness of tax compliance norms: A factorial survey on the acceptance of inheritance tax evasion in Germany

Using the example of the inheritance tax, this paper examines whether and how the strictness of tax compliance norms depends on the interrelation between tax objectives, tax design, and taxed behavior. Building on the literature on tax evasion, optimal inheritance taxation, family economics, and social norms, the paper hypothesizes that a larger non-declared amount of transfer decreases the acceptability of tax evasion and that both an asset with emotional value and a higher degree of kinship increase the acceptance of evasion. Utilizing a survey with an experimental design on the acceptance of inheritance tax evasion that was conducted in Germany in 2012, the paper confirms these hypotheses empirically. The results indicate that violating a compliance norm is justifiable if the tax objectives are not infringed upon by the evasion or if the tax design is not considered useful to accomplish the aim of the tax. In contrast, the norm violation is less acceptable, if the underlying goal is at stake

Collusive Tax Evasion and Social Norms

Although collusive tax evasion by buyers and sellers of commodities and also by employers and employees is widespread all over the world, it has rarely been analyzed in the tax evasion literature. To fill this gap and to compare collusive tax evasion with independent tax evasion, this paper develops a simple non-cooperative game-theoretic model and confirms the model's predictions in a laboratory experiment. Because collusive tax evasion involves social interaction, this paper focuses on the effect of social norms and theoretically and empirically demonstrates that the tax compliance norm has a stronger negative effect on the magnitude of collusive tax evasion than on independent tax evasion. The reason for this result is that in a collusive tax evasion game with multiple equilibria social norms act as an equilibrium selection device, whereas social norms need to be internalized to change the behavior of taxpayers who evade taxes unobservedly

Impact of disease activity and treatment of comorbidities on the risk of myocardial infarction in rheumatoid arthritis

Background The aim was to estimate the impact of individual risk factors and treatment with various disease-modifying antirheumatic drugs (DMARDs) on the incidence of myocardial infarction (MI) in patients with rheumatoid arthritis (RA). Methods We analysed data from 11,285 patients with RA, enrolled in the prospective cohort study RABBIT, at the start of biologic (b) or conventional synthetic (cs) DMARDs. A nested case–control study was conducted, defining patients with MI during follow-up as cases. Cases were matched 1:1 to control patients based on age, sex, year of enrolment and five cardiovascular (CV) comorbidities. Generalized linear models were applied (Poisson regression with a random component, conditional logistic regression). Results In total, 112 patients developed an MI during follow-up. At baseline, during the first 6 months of follow-up and prior to the MI, inflammation markers (erythrocyte sedimentation rate (ESR) and C-reactive protein (CRP)) but not 28-joint-count disease activity score (DAS28) were significantly higher in MI cases compared to matched controls and the remaining cohort. Baseline treatment with DMARDs was similar across all groups. During follow-up bDMARD treatment was significantly more often discontinued or switched in MI cases. CV comorbidities were significantly less often treated in MI cases vs. matched controls (36 % vs. 17 %, p < 0.01). In the adjusted regression model, we found a strong association between higher CRP and MI (OR for log-transformed CRP at follow-up: 1.47, 95 % CI 1.00; 2.16). Furthermore, treatment with prednisone ≥10 mg/day (OR 1.93, 95 % CI 0.57; 5.85), TNF inhibitors (OR 0.91, 95 % CI 0.40; 2.10) or other bDMARDs (OR 0.85, 95 % CI 0.27; 2.72) was not associated with higher MI risk. Conclusions CRP was associated with risk of MI. Our results underline the importance of tight disease control taking not only global disease activity, but also CRP as an individual marker into account. It seems irrelevant with which class of (biologic or conventional) DMARD effective control of disease activity is achieved. However, in some patients the available treatment options were insufficient or insufficiently used - regarding DMARDs to treat RA as well as regarding the treatment of CV comorbidities