74th Annual Congress of the International Institute of Public Finance - ConfTool Pr... Page 1 of 83 Conference Agenda 74th Annual Congress of the International Institute of Public Finance Date: Monday, 20/Aug/2018 3:30pm - 6:00pm Registration (also open on congress days from 8 am on) 3:30pm - 6:30pm IIPF Board of Management Meeting I (for Board only) Room A32, Main building 7:30pm - 9:30pm IIPF Board of Management Dinner (on invitation only) https://www.conftool.pro/iipf2018/index.php?page=browseSessions&print=yes&do... 04.09.2018 74th Annual Congress of the International Institute of Public Finance - ConfTool Pr... Page 2 of 83 Date: Tuesday, 21/Aug/2018 9:00am - 9:30am Opening Ceremony Main auditorium (Juhlasali), Main building 9:30am - 10:30am Plenary I: Keynote Lecture: Uta Schönberg (University College London) on "The Impact Main auditorium of Immigration on Regions and Workers" Session Chair: Wojciech Kopczuk, Columbia University (Juhlasali), Main building 10:30am - 11:00am Coffee Break 11:00am - 1:00pm A01: Firm Taxation Main auditorium (Juhlasali), Main building 11:00am - 11:30am Efficiency and the Taxation of Bank Profit Motohiro Sato1, Robin Boadway2, Jean-Francois Tremblay3 1Hitotsubashi University; 2Queen's University; 3University of Ottawa This paper explores the effect of the taxation of profits of banks and other financial intermediaries in a setting in which intermediation is inefficient. The inefficiencies arise from imperfect screening of lenders, which tends to limit lending, and government provision of deposit insurance, which encourages excessive lending. Three sorts of financial profit tax regimes are considered: R+F cash-flow taxation, standard corporate income taxation, and financial activities taxation. As well, the government regulates the amount of lending financial intermediaries can do relative to their equity. The combined effect of distorting profit taxes and financial intermediation inefficiencies on the efficiency of lending are studied, as well as the role of tax rates and regulated loan-equity ratios in mitigating inefficient lending. Sato-Efficiency and the Taxation of Bank Profit-337.pdf 11:30am - 12:00pm Optional Formula Apportionment Caterina Liesegang1, Marco Runkel1,2,3 1University of Technology Berlin, Germany; 2CESifo, Munich, Germany; 3NoCeT, Bergen, Norway In contrast to the first intuition, our paper shows with the help of a theoretical model that replacing Separating Accounting (SA) by Formula Apportionment (FA) in the taxation of multinational enterprises (MNEs) may mitigate profit shifting and tax competition, even if MNEs can choose between FA and SA. Each MNE trades off the additional benefits from profit shifting under SA against the lower compliance costs under FA. If the saved compliance costs outweigh the lost profit shifting opportunities, MNEs opt for FA and governments may increase their tax rates and mitigate detrimental tax competition. This result is obtained for sure in the limiting case where all countries are identical and choose the same corporate tax rate since then the benefits from profit shifting under SA completely vanish. The result still holds under country asymmetry as long as asymmetries are not too large. Liesegang-Optional Formula Apportionment-473.pdf 12:00pm - 12:30pm The Relevance of Depreciation Allowances as a Fiscal Policy Instrument: A Hybrid Approach to CCCTB? Kunka Petkova2, Alfons J. Weichenrieder1 1Goethe University Frankfurt, Germany; 2Vienna University of Business and Economics A major goal of the EU Commission in the area of direct taxation is the introduction of a common consolidated corporate tax base (CCCTB) in Europe. Such a system can reduce tax avoidance and compliance cost, but also limits national discretion in tax matters. In a sample of up to 47 countries, we find that the probability of a tax reform that improves the depreciation allowances increases if the macroeconomic situation is weak. This suggests that depreciation allowances are used as a fiscal instrument for stabilization. A common consolidated tax base deprives national governments to implement investment incentives via accelerated depreciation. This paper discusses the possible implementation of a hybrid system that combines features of formula apportionment and separate accounting. Such a hybrid system could still cope with transfer pricing problems and other tax planning issues, but would leave national discretion over depreciation allowances. Petkova-The Relevance of Depreciation Allowances as a Fiscal Policy Instrument-288.pdf 12:30pm - 1:00pm The Efficiency Costs of Dividend Taxation with Managerial Firms Marko Koethenbuerger, Michael Stimmelmayr ETH Zurich, Switzerland The paper analyzes the efficiency costs of dividend taxation in a quiet-life corporate agency model. Unlike existing models, the quiet-life model is able to predict negative corporate investment responses for mature firms that are consistent with empirical analyses. We further show that investment changes following a rise https://www.conftool.pro/iipf2018/index.php?page=browseSessions&print=yes&do... 04.09.2018 74th Annual Congress of the International Institute of Public Finance - ConfTool Pr... Page 3 of 83 in dividend taxes might not be sufficient to infer, first, the efficiency cost of dividend taxation and, second, the financing regime of the firm that underlies the investment response, in contrast to insights from previous literature. We provide a testable implication to infer the mode of investment finance from investment responses. Finally, we relate the results to recent empirical findings in the literature on dividend taxation. Koethenbuerger-The Efficiency Costs of Dividend Taxation with Managerial Firms-507.pdf 11:00am - 1:00pm A02: Income and Wealth Inequality Room B3107, Pinni B building 11:00am - 11:30am A Head-to-Head Comparison of Augmented Wealth in Germany and the United States Timm Bönke1, Markus Grabka2, Carsten Schröder1,2, Edward N. Wolff3 1Freie Universität Berlin, Germany; 2German Institute for Economic Research; 3New York University We provide levels of, compositions of, and inequalities in household augmented wealth – defined as the sum of net worth and pension wealth – for two countries: the United States and Germany. Pension wealth makes up a considerable portion of household wealth: about 48% in the United States and 61%in Germany. The higher share in Germany narrows the wealth gap between the two countries: While average net worth in the United States (US$337,000 in 2013) is about 1.8 times higher than in Germany, augmented wealth (US$651,000) is only 1.4 times higher. Further, the inclusion of pension wealth in household wealth reduces the Gini coefficient from 0.892 to 0.701 in the United States and from 0.765 to 0.511 in Germany. Bönke-A Head-to-Head Comparison of Augmented Wealth in Germany and the United States-485.pdf 11:30am - 12:00pm Looking for the missing rich: Tracing the top tail of the wealth distribution Stefan Bach1,2, Andreas Thiemann3, Aline Zucco1 1German Institute for Economic Research, DIW Berlin; 2University of Potsdam; 3European Commission - Joint Research Centre, Spain We analyse the top tail of the wealth distribution in Germany, France, and Spain based on the first and second wave of the Household Finance and Consumption Survey (HFCS). Since top wealth is likely to be under-represented in household surveys, we integrate big fortunes from rich lists, estimate a Pareto distribution, and impute the missing rich. In addition to the Forbes list, we rely on national rich lists since they represent a broader base for the big fortunes in those countries. As a result, the top percentile share of household wealth in Germany jumps up from 24 percent to 31 percent in the first and from 24 to 33 percent in the second wave after top wealth imputation. For France and Spain, we find only a small effect of the imputation since rich households are better captured in the survey. Bach-Looking for the missing rich-377.pdf 12:00pm - 12:30pm The Distribution of Income and Wealth in Sweden: A New View from the National Accounts Sebastian Escobar1, Olle Hammar1, Daniel Waldenström2,3, Gabriel Zucman4 1Uppsala University, Sweden; 2Research Institute of Industrial Economics, Sweden; 3Paris School of Economics, France; 4University of California, Berkeley, United States This paper presents new evidence on income and wealth inequality in Sweden over the past half century, 1968-2016. The basic contribution of the paper is to match individual register data with macroeconomic totals from the national accounts and to compute new estimates of pre- and post-tax/transfer distributions of income and wealth in Sweden. By matching individual register data for the full population to macro totals in the national accounts, it is found that only about 60 percent of all pre-tax labor income and 20 percent of all pre-tax capital income are covered in the official tax returns-based distributional statistics. In this project, we create new individual pre-tax income variables for each of the items that is missing in the individual statistics. Ultimately, we are able to construct an extended register database for the Swedish population, which covers the distribution of the entire national income in all years. Escobar-The Distribution of Income and Wealth in Sweden-232.pdf 12:30pm - 1:00pm Time Discounting and Wealth Inequality Thomas Epper2,3,1, Ernst Fehr3,1, Helga Fehr-Duda4,1, Claus Thustrup Kreiner1, David Dreyer Lassen1, Søren Leth-Petersen1, Gregers Nytoft Rasmussen1 1Center for Economic Behavior and Inequality (CEBI), Department of Economics, University of Copenhagen; 2University of St. Gallen, School of Economics and Political Science; 3University of Zurich, Department of Economics; 4University of Zurich, Department of Banking and Finance We use standard experimental methods to elicit how much people discount the future for a large sample of middle-aged individuals in Denmark and link it to information about their real-life wealth over a 15-year period obtained from administrative registers. The results show that individuals with relatively low time discounting are consistently positioned higher in the wealth distribution.