OROMIA STATE UNIVERSITY

SCHOOL OF GRADUATE STUDIES

MA IN PUBLIC FINANCIAL MANAGEMENT

Course: - Advanced Taxation (PFM 621)

Individual Assignment (Article Review)

Name Of Student:-Amana Kemal

Id No:-PGP/PFM/W/12/0403

Center: - Adama

Submitted to:-Desalegn Mosissa (Assist Prof, PhD Cand.)

via my email: dasalegn.mosissa@aau.edu.et

July, 2021
Article Reviewed (1)

Taxation for the 21st Century: The Automated Payment Transaction (APT) Tax

Author(s): Edgar L. Feige, Michele Boldrin and Harry Huizinga

Source: Economic Policy, Vol. 15, No. 31 (Oct., 2000), pp. 473-511

Introduction

The article was written by Feige, E. L., Boldrin, M., & Huizinga, H. (2000). Entitled
“Taxation for the 21st Century: The Automated Payment Transaction (APT) Tax ‘and
published by Economic Policy journal. The subject of this article is Technological
innovations in finance and communications have internationalized financial activity
and created virtual worldwide commerce. Today's taxation schemes are based on
personal incomes, corporate profits and expenditures, generated within national
borders. Taxation on a global scale offers a technological solution, but the politics of
taxation and fiscal sovereignty remains an essentially national matter.

Objectives

The authors' aim is to gain some insight into the extent to which initial total
transactions are likely to decline in response to the introduction of an APT tax.

Results

The simulated average percentage decline in equity trading volumes over all countries
is 9% for the elasticity estimate and rises to 33% for the Lindgren and Westland
estimate. The reduction of average and marginal tax rates on current taxable income
from more than 30% to approximately 0.3% drastically reduces the present tax
incentive to substitute leisure for work. The problem is, though, that the households in
the top 5% of the US income distribution control less than 25% of the US GNP.

Discussion

The APT tax proposed in this paper is designed as a revenue-neutral replacement for
the present tax system. It is emphatically not intended as an additional source of
revenue. The tax on currency and on automated payments increases the collection of
taxes from illegal activities, including the traffic in drugs that requires heavy currency
usage and repeated money laundering for the conduct of business.
Conclusion

Overall, I find the article quite interesting that gives a substantial solution for the
government revenues are immediately assessed and collected when exchanges are
consummated by payment. The author discusses the problem briefly. his intent was to
suggest the finding that had been reported in this article.
Article Reviewed (2)

WHAT DOES THE PUBLIC BELIEVE ABOUT TAX FAIRNESS?

Author(s): Steven M. Sheffrin Source: National Tax Journal, Vol. 46, No. 3, New
Directions in Tax Policy (September, 1993), pp. 301-308

Introduction

The name of the author is Steven M. Sheffrin and the title of the article is “what does
the public believe about tax fairness?” the subject area of this article is to shape
attitudes towards desirable tax burden of the public on attitudes that must shape a
social welfare function and perceptions concerning tax fairness. The article shows that
several essential ideas which peoples need to comprehend the impacts of taxes are not
grasped by the public.

The article shows that several essential ideas which peoples need to comprehend the
impacts of taxes are not grasped by the public. There is a large, voluminous, and
diffuse literature on the measurement, interpretation, and significance of the public’s
perceptions and attitudes towards tax fairness.’

This paper relates this literature to two Important Issues currently on the policy
agenda: proposed increases in marginal tax rates for upper-income taxpayers and the
taxation of employer-provided health insurance.

Discussion

Rich People's Tax The easiest method to assess if the public wants more taxes on
high-income persons is to ask them, but there are several drawbacks to doing so. The
author contrasted respondents' preferences for desired rates to perceived rates based
on their income. There might still be arguments and problems about how to allocate
any increased revenue.

Health-Care Benefits Are Taxed With comprehensive health reform on the legislative
agenda, it's only logical to revisit a long-standing tax reform issue: the taxation of
employer-provided health insurance.
Because of organized labor's opposition and the belief that the public would still
strongly reject the taxation of employer-provided health insurance, a variety of
solutions have been considered. A VAT, excise taxes on cigarettes and alcohol, and
other levies on health-care providers are among them.

Both the employee and the employer split the costs. According to the research on
economic psychology, the beginning circumstance has a significant impact on the
public's perceptions of tax fairness. It is possible that the concept of sharing and equal
sacrifice will resonate with the public.

If this political approach succeeds, the consequence will be something resembling a

policy of taxing a portion of employer-provided health insurance beyond a particular
threshold.

The public who is the ultimate consumer of the results of burden tables, and the public
who, as voters, will judge the politicians on their decisions, it is appropriate therefore
to consider whether the public has distinct attitudes and perceptions concerning tax
fairness. Neither of these points is intended as criticism of the public.

Finally, public opinion on a desired tax burden may be divided. The majority of
public opinion polls on the overall desirability of higher taxes for the affluent are too
basic to address these problems.