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This paper studies the effect of the VAT threshold on firm growth in the UK, using exogenous variation over time in the threshold, combined with turnover bin fixed effects, for identification. We find robust evidence that annual growth in turnover slows by about 1 percentage point when firm turnover gets close to the threshold, with no evidence of higher growth when the threshold is passed. Growth in firm costs shows a similar pattern, indicating that the response to the threshold is likely to be a real response rather than an evasion response. Firms that habitually register even when their turnover is below the VAT threshold (voluntary registered firms) have growth that is unaffected by the threshold, whereas firms that select into the Flat-Rate Scheme have a less pronounced slowdown response than other firms. Similar patterns of turnover and cost growth around the threshold are also observed for non-incorporated businesses. Finally, simulation results clarify the relative contribution of ``crossers" (firms who eventually register for VAT) and ``non-crossers" (those who permanently stay below the threshold) in explaining our empirical findings.
Business Taxes and Subsidies --- Compliance costs --- Currency crises --- Econometric analysis --- Econometrics & economic statistics --- Econometrics --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Informal sector --- Macroeconomics --- Public finance & taxation --- Revenue administration --- Spendings tax --- Switching Regression Models --- Tax administration and procedure --- Tax Evasion and Avoidance --- Taxation and Subsidies: Incidence --- Taxation --- Taxes --- Threshold analysis --- Threshold Regression Models --- Truncated and Censored Models --- Value-added tax
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Using administrative tax records for UK businesses, we document both bunching in annual turnover below the VAT registration threshold and persistent voluntary registration by almost half of the firms below the threshold. We develop a conceptual framework that can simultaneously explain these two apparently conflicting facts. The framework also predicts that higher intermediate input shares, lower product-market competition and a lower share of business to consumer (B2C) sales lead to voluntary registration. The predictions are exactly the opposite for bunching. We test the theory using linked VAT and corporation tax records from 2004-2014, finding empirical support for these predictions.
Value-added tax --- Finance: General --- Taxation --- Corporate Taxation --- Efficiency --- Optimal Taxation --- Business Taxes and Subsidies --- Fiscal Policies and Behavior of Economic Agents: Firm --- Tax Evasion and Avoidance --- General Financial Markets: General (includes Measurement and Data) --- Public finance & taxation --- Finance --- Corporate & business tax --- VAT registration thresholds --- Compliance costs --- Competition --- Corporate income tax --- Taxes --- Revenue administration --- Financial markets --- Spendings tax --- Tax administration and procedure --- Corporations --- Finland --- Vat registration thresholds
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The introduction of prenatal sex-detection technologies in India has led to a phenomenal increase in abortion of female fetuses. This paper examines the impacts of this on girl relative to boy mortality rates after birth, using data from 1973-2005. The analysis finds a narrowing of the gender gap in under-5 mortality rates, in line with surviving girls being more wanted. The estimates show that for every three aborted girls, one additional girl survives to age five. Investigation of the mechanisms finds a narrowing of gender gaps in parental investments in children, moderation of son-biased fertility stopping, and shrinking of the gap between actual and desired fertility. Heterogeneity in fertility responses suggests a shift in the distribution of girls toward lower socioeconomic status families. The findings have implications not only for counts of missing girls, but also for the later life outcomes of girls.
Birth Order --- Child Mortality --- Early Child and Children's Health --- Family Health Survey --- Female Mortality --- Gender --- Gender and Development --- Gender and Health --- Gender and Poverty --- Gender Gap --- Health, Nutrition and Population --- Population Policies --- Reproductive Health --- Sex Of The Child --- Sex-Selective Abortion
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We develop novel estimates of peak and off-peak price elasticities for urban mass transit demand in San Francisco using a large natural experiment with 3.6 million trip sessions and a natural field experiment that both have exogenous price subsidies. We then estimate the welfare impacts for these price subsidies using a sufficient statistics approach. Our analysis suggests that off-peak subsidies can increase welfare, but the positive effects are reduced when consumers take the decisions of others into account compared to when they do not. We also find a large variation in the welfare impacts of shifting travel to different periods, which is explained by differences in demand and congestion characteristics. Finally, we show that the targeting of subsidies can increase welfare, but need not do so if the regulator does not have accurate information on demand.
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