New room to maneuver? National tax policy under increasing financial transparency

Research output: Journal contributionsJournal articlesResearchpeer-review

Standard

New room to maneuver? National tax policy under increasing financial transparency. / Ahrens, Leo; Bothner, Fabio; Hakelberg, Lukas et al.
In: Socio-Economic Review, Vol. 20, No. 2, 01.04.2022, p. 561-583.

Research output: Journal contributionsJournal articlesResearchpeer-review

Harvard

APA

Vancouver

Ahrens L, Bothner F, Hakelberg L, Rixen T. New room to maneuver? National tax policy under increasing financial transparency. Socio-Economic Review. 2022 Apr 1;20(2):561-583. doi: 10.1093/ser/mwaa007

Bibtex

@article{a84d5a9305214a639b52b54136c9b4b0,
title = "New room to maneuver? National tax policy under increasing financial transparency",
abstract = "Why have Organisation for Economic Co-operation and Development (OECD) governments raised taxes on dividends at the shareholder level since 2008? Previous research points to the importance of budget deficits and voter demand for compensatory fairness in the aftermath of the financial crisis. We complement this literature by showing that the effect of domestic drivers of tax increases on capital income crucially depends on the level of financial transparency in a country's investment network. Low financial transparency increases the risk of capital flight in response to a tax hike, whereas high financial transparency reduces this risk. Hence, governments facing fiscal pressure become more likely to raise taxes on capital income when transparency is high. To substantiate our argument, we construct an original indicator of financial transparency in countries' investment networks, which we utilize in a regression analysis of tax reforms by 204 cabinets in 35 OECD countries between 2001 and 2018.",
keywords = "automatic exchange of taxpayer information, capital taxation, financial transparency, globalization, international cooperation, tax evasion, Politics",
author = "Leo Ahrens and Fabio Bothner and Lukas Hakelberg and Thomas Rixen",
note = "Publisher Copyright: {\textcopyright} The Author(s) 2020.",
year = "2022",
month = apr,
day = "1",
doi = "10.1093/ser/mwaa007",
language = "English",
volume = "20",
pages = "561--583",
journal = "Socio-Economic Review",
issn = "1475-1461",
publisher = "Oxford University Press",
number = "2",

}

RIS

TY - JOUR

T1 - New room to maneuver? National tax policy under increasing financial transparency

AU - Ahrens, Leo

AU - Bothner, Fabio

AU - Hakelberg, Lukas

AU - Rixen, Thomas

N1 - Publisher Copyright: © The Author(s) 2020.

PY - 2022/4/1

Y1 - 2022/4/1

N2 - Why have Organisation for Economic Co-operation and Development (OECD) governments raised taxes on dividends at the shareholder level since 2008? Previous research points to the importance of budget deficits and voter demand for compensatory fairness in the aftermath of the financial crisis. We complement this literature by showing that the effect of domestic drivers of tax increases on capital income crucially depends on the level of financial transparency in a country's investment network. Low financial transparency increases the risk of capital flight in response to a tax hike, whereas high financial transparency reduces this risk. Hence, governments facing fiscal pressure become more likely to raise taxes on capital income when transparency is high. To substantiate our argument, we construct an original indicator of financial transparency in countries' investment networks, which we utilize in a regression analysis of tax reforms by 204 cabinets in 35 OECD countries between 2001 and 2018.

AB - Why have Organisation for Economic Co-operation and Development (OECD) governments raised taxes on dividends at the shareholder level since 2008? Previous research points to the importance of budget deficits and voter demand for compensatory fairness in the aftermath of the financial crisis. We complement this literature by showing that the effect of domestic drivers of tax increases on capital income crucially depends on the level of financial transparency in a country's investment network. Low financial transparency increases the risk of capital flight in response to a tax hike, whereas high financial transparency reduces this risk. Hence, governments facing fiscal pressure become more likely to raise taxes on capital income when transparency is high. To substantiate our argument, we construct an original indicator of financial transparency in countries' investment networks, which we utilize in a regression analysis of tax reforms by 204 cabinets in 35 OECD countries between 2001 and 2018.

KW - automatic exchange of taxpayer information

KW - capital taxation

KW - financial transparency

KW - globalization

KW - international cooperation

KW - tax evasion

KW - Politics

UR - http://www.scopus.com/inward/record.url?scp=85134539519&partnerID=8YFLogxK

U2 - 10.1093/ser/mwaa007

DO - 10.1093/ser/mwaa007

M3 - Journal articles

AN - SCOPUS:85134539519

VL - 20

SP - 561

EP - 583

JO - Socio-Economic Review

JF - Socio-Economic Review

SN - 1475-1461

IS - 2

ER -

DOI