Tax Law Asymmetries and Income Shifting : Evidence From Japanese Capital Keiretsu

When positive and negative income are treated asymmetrically under a corporate income tax (CIT) without allowance for group taxation, a group of affi liated corporations may engage in tax avoidance by shifting income from profi table to unprofi table subsidiaries for the sole purpose of minimising the sum of tax liabilities of the group members. The aim of this paper is to offer systematic evidence on the behavioural response to a tax penalty that arises from doing business in multiple entities, in order to provide justifi cation for group tax systems such as consolidated fi ling and loss transfer. The setting for our investigation is the Japanese CIT before the introduction of a group tax system. We develop a theoretical model of a corporate group that predicts a difference in profi t reporting behaviour between subsidiaries above and below 100 million yen in paid-in capital due to the progressive feature of the Japanese CIT. We test the implications of the model with a company-level data on subsidiaries based on survey that covers over 1,700 corporate groups headed by large corporations. The sample consists of 33,340 subsidiary-time pairs from 1988, 1990, and 1992. We fi nd evidence consistent with a hypothesis that corporate groups shift income among group members. The fi nding underscores the importance of accounting for the group behaviour in the design of CIT.

A tale of pork prices : evasion and attenuation of a Japanese tariff

This paper empirically examines the effectiveness of a safeguard tariff in the Japanese market for imported pork parts. The goals are, first, to consider a refinement to the traditional market-based method for evasion detection, and, second, to apply the method in a setting where evasion is suspected to be widespread. Utilising a within-pig variation in tariff burdens and the timing of safeguard invocations, I examine a panel of monthly wholesale prices on narrowly-defined pork products from 2001 through 2008. The results are consistent with a hypothesis that a widespread evasion nullified the safeguard tariff on pork, and are robust to a range of alternative explanations including the adjustment of profit margins by traders. Safeguard tariffs appear to be a simple mechanism, but behavioural responses can undo the policy intent.safeguard tariff, price disparity, tax incidence

The Response of Firms to Eligibility Thresholds : Evidence from the Japanese Value-Added Tax

It is common to defi ne benefi t eligibility for small business policies by restrictions on the fi rm size. This paper investigates the incentives for a large fi rm to masquerade as many small fi rms by separately incorporating business segments, focusing on the case of the Japanese value-added tax. The paper fi nds that the masquerading was pervasive and took place quickly after the introduction of tax incentives. Tax avoidance caused 3.4 per cent of the overall revenue drain in 1990, thus reducing horizontal equity, but the effi ciency consequence would not have been severe. This study suggests that the masquerading by fi rms may be commonplace in other settings.Tax avoidance, Business group, Value-added tax, Firm size distribution

Protein Kinase R Modulates c-Fos and c-Jun Signaling to Promote Proliferation of Hepatocellular Carcinoma with Hepatitis C Virus Infection

Double-stranded RNA-activated protein kinase R (PKR) is known to be upregulated by hepatitis C virus (HCV) and overexpressed in hepatocellular carcinoma (HCC). However, the precise roles of PKR in HCC with HCV infection remain unclear. Two HCV replicating cell lines (JFH-1 and H77s), generated by transfection of Huh7.5.1 cells, were used for experiments reported here. PKR expression was modulated with siRNA and a PKR expression plasmid, and cancer-related genes were assessed by real-time PCR and Western blotting; cell lines were further analyzed using a proliferation assay. Modulation of genes by PKR was also assessed in 34 human HCC specimens. Parallel changes in c-Fos and c-Jun gene expression with PKR were observed. Levels of phosphorylated c-Fos and c-Jun were upregulated by an increase of PKR, and were related to levels of phosphorylated JNK1 and Erk1/2. DNA binding activities of c-Fos and c-Jun also correlated with PKR expression, and cell proliferation was dependent on PKR-modulated c-Fos and c-Jun expression. Coordinate expression of c-Jun and PKR was confirmed in human HCC specimens with HCV infection. PKR upregulated c-Fos and c-Jun activities through activation of Erk1/2 and JNK1, respectively. These modulations resulted in HCC cell proliferation with HCV infection. These findings suggest that PKR-related proliferation pathways could be an attractive therapeutic target

Transcatheter closure of small ductus arteriosus with amplatzer vascular plug

PurposeThe purpose of this study was to share our experience of transcatheter closure of small patent ductus arteriosus (PDA) by using an Amplatzer vascular plug (AVP).MethodsWe reviewed the medical records of 20 patients who underwent transcatheter closure at Samsung Medical Center and Sejong General Hospital from January 2008 to August 2012. The size and shape of the PDAs were evaluated by performing angiograms, and the PDA size and the AVP devices size were compared.ResultsThe mean age of the patients was 54.9±45.7 months old. The PDAs were of type C (n=5), type D (n=12), and type E (n=3). The mean pulmonary end diameter of the PDA was 1.7±0.6 mm, and the aortic end diameter was 3.6±1.4 mm. The mean length was 7.3±1.8 mm. We used 3 types of AVP devices: AVP I (n=5), AVP II (n=7), and AVP IV (n=8). The ratio of AVP size to the pulmonary end diameter was 3.37±1.64, and AVP size/aortic end ratio was 1.72±0.97. The aortic end diameter was significantly larger in those cases repaired with AVP II than in the others (P=0.002). The AVP size did not significantly correlate with the PDA size, but did correlate with smaller ratio of AVP size to aortic end diameter (1.10±0.31, P=0.032).ConclusionTranscatheter closure of small PDA with AVP devices yielded satisfactory outcome. AVP II was equally effective with smaller size of device, compared to others