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Taxation and the Financial Crisis A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Alworth, Julian S. (Ed.); Arachi, Giampaolo (Ed.) Book — Published Version Taxation and the Financial Crisis Provided in Cooperation with: Oxford University Press (OUP) Suggested Citation: Alworth, Julian S. (Ed.); Arachi, Giampaolo (Ed.) (2012) : Taxation and the Financial Crisis, ISBN 978-0-19-969816-5, Oxford University Press, Oxford, http://dx.doi.org/10.1093/acprof:oso/9780199698165.001.0001 This Version is available at: http://hdl.handle.net/10419/118674 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by-nc-nd/3.0/ www.econstor.eu Taxation and the Financial Crisis This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] This page intentionally left blank This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] Taxation and the Financial Crisis Edited by Julian S. Alworth and Giampaolo Arachi 1 This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] 3 Great Clarendon Street, Oxford OX2 6DP Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York # Oxford University Press 2012 Chapter 3 # European Union 2012 Chapter 5 # European Union 2012 Chapter 9 # Bank for International Settlements 2009 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2012 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging in Publication Data Library of Congress Control Number: 2012930325 Typeset by SPI Publisher Services, Pondicherry, India Printed in Great Britain on acid-free paper by MPG Books Group, Bodmin and King’s Lynn ISBN 978–0–19–969816–5 10987654321 This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] Acknowledgements This book originated in a conference held in Milan in April 2009 at Università Bocconi. We wish to thank Econpubblica-Università Bocconi and the Vice Rector for Research, Vincenzo Perrone, for financial support. We received generous backing from Roberto Artoni, the Econpubblica- Univerisità Bocconi director, Alessandra Casarico, and Econpubblica research fellows. We would also like to thank Cecilia Caliandro and Federica Garlaschelli for editorial assistance in the preparation of the manuscript and index. This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] This page intentionally left blank This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] Contents List of Figures ix List of Tables xi List of Boxes xii List of Contributors xiii Abbreviations xviii 1. Introduction 1 Julian S. Alworth and Giampaolo Arachi 2. Culprit, Accomplice, or Bystander? Tax Policy and the Shaping of the Crisis 28 Michael Keen, Alexander Klemm, and Victoria Perry 3. The Role of Housing Tax Provisions 61 Thomas Hemmelgarn, Gaetan Nicodeme, and Ernesto Zangari 4. The Role of Taxes in Compensation Schemes and Structured Finance 88 Vieri Ceriani, Stefano Manestra, Giacomo Ricotti, and Alessandra Sanelli 5. Can Tax Policy Help to Prevent Financial Crisis? 116 Thomas Hemmelgarn and Gaetan Nicodeme 6. Taxation and the Financial Sector 148 Douglas A. Shackelford, Daniel N. Shaviro, and Joel Slemrod 7. Income Tax Reform Implications of the Financial Crisis 174 Daniel N. Shaviro 8. Moving beyond the Crisis: Tax Policies for the Soundness of Financial Markets 190 Geoff Lloyd 9. Government Debt Management at Low Interest Rates 214 Robert N. McCauley and Kazuo Ueda vii This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] Contents 10. The Effects of Fiscal Consolidation on Short-Term Growth: A Review and Implications for the UK 231 Katarzyna Anna Bilicka, Michael P. Devereux, and Clemens Fuest 11. Regulation and Taxation: Economics and Politics 257 Donato Masciandaro and Francesco Passarelli References 270 Author Index 291 Subject Index 295 viii This is an open access version of the publication distributed under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/3.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contact [email protected] List of Figures 2.1. Effective average tax rates on owner-occupation (%) 46 2.2. Debt ratios and the tax treatment of owner-occupation 48 3.1. Nasdaq Composite Index, 1993–2004 63 3.2. US Federal Reserve discount rate, 2000–964 3.3. US Capital and Financial Account 65 3.4. US Capital and Financial Account, components 65 3.5. Case–Shiller house price index 66 3.6. US prime and subprime mortgages 69 3.7. Adjustable rate mortgages 69 3.8. US interbank loans 72 3.9. Price-to-rent ratios 73 3.10. Effective average taxation of owner-occupation, Europe and the USA (%) 78 4.1. The securitization process 104 4.2. Collateralized debt obligations 105 4.3. Synthetic CDOs 105 4.4. Cash flows of a synthetic CDO 106 5.1. Share in tax revenue of EU Member States (addition-method FAT) 129 5.2. Share in tax revenue of selected EU Member States (broad-base FTT) 139 8A.
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