Taxes

A Comparative Analysis of Sales Tax Compliance Costs for Retail Businesses

Thomas B. Crabill
1985. 56p. Contract awarded in FY 1984 to Peat, Marwick &;Main, 345 Park Avenue, New York, NY 10154.

Small retailers with gross sales of $1 million or less were found by this study to bear significantly higher tax compliance costs (as much as three times higher) than large retailers. The greater the number of exemptions and the frequency of filing, the higher the costs and the differential.

NTIS order number:
PB91-170076
Price codes:
A06 (Paper)
A01 (Microfiche)

Development of a Small Business Tax Model

KPMG Peat Marwick, Policy Economics Group
1986. 118p. Contract awarded in FY 1985 to KPMG Peat Marwick, 1730 M Street NW, Suite 910, Washington, DC 20036.

This study developed a small business tax model to simulate the effects of the House Tax Reform Bill (H.R. 3838). This is the first of four reports.

For the other reports completed under this contract, see Estimates of the Distributional and Revenue Effects of the Tax Reform Act of 1986, Estimates of Effective Corporate Income Tax Rates, and The Impact of Federal Tax Reform on Small Business: A Simulation of the House Tax Reform Bill (H.R. 3838).

NTIS order number:
PB85-109320
Price codes:
A05 (Paper)
A01 (Microfiche)

The Differential Effects of the Current Structure of Payroll Taxes on Small and Large Business

Joel Popkin
1984. 84p. Contract awarded in FY 1982 to Joel Popkin and Co., 1030 15th Street NW, Washington, DC 20005.

This study explored the possible differential effects of the current structure of payroll taxes on small and large businesses.  Effective tax rates are higher in small businesses than in large, but the differences can be expected to narrow in the future. Small businesses are likely to be more harmed by an increase in payroll taxes than large if small businesses cannot pass the payroll tax forward into prices or backward into wages.

NTIS order number:
P889-238091
Price codes:
A05(Paper)
A01 (Microfiche)

The Differential Incidence of Private Health Insurance-Related Tax Expenditures in Small and Large Firms

John L. Fiedler and Rebecca S. Weader
1989. 94p. Contract awarded in FY 1987 to Macro Systems, Inc., 8630 Fenton Street, Suite 300, Silver Spring, MD 20902.

How much bigger is the tax break that larger firms get by offering health insurance to their employees? This study empirically estimates the distribution of employer-provided health insurance- related tax expenditures by firm size, using the 1977 National Medical Care Expenditures Survey. Federal personal income tax, FICA tax, and state personal income tax expenditure estimates are developed for five firm size categories.

NTIS order number:
PB85-167799
Price codes:
A04 (Paper)
A01 (Microfiche)
RS number: 70

The Effect on Small Business of Foreign Tax Credits and Dividend Repatriation Rules Used by Large Business

Michael D. Willer
1984. 57p. Contract awarded in FY 1983 to M.D. Willer and Company, Inc., 105 Santa Ana Avenue, Long Beach, CA 90803.

No negative impact on small businesses was identified from the benefits accruing to large businesses from foreign tax credits or dividend repatriation practices. Investment abroad by multinational companies was not found to reduce their purchases in the United States.

NTIS order number:
PB85-118552
Price codes:
A14 (Paper)
A01 (Microfiche)
RS number: 37

The Effects of the 1981 and 1982 Tax Acts for Small and Large Firms

Jack G. Faucett, Joseph R. Morris, and Harry Chmelynski
1984. 315p. Contract awarded in FY 1982 to Jack Faucett Associates, Inc., 5454 Wisconsin Avenue, Chevy Chase, MD 20815.

The authors found tax reductions of between 5 percent and 25 percent in nearly all industries and in firms of all sizes as a result of the 1981 and 1982 federal tax reforms. There was a trend toward smaller reductions as firm size increased in the finance and service industries. In all industries except utilities, the smallest tax reductions were found in the intermediate-size firms.

NTIS order number:
PB90-240599
Price codes:
A08 (Paper)
A01 (Microfiche)

Equity in State and Municipal Property Taxation

Cambridge Systematics, National Conference of State Legislators, and Raymond Torto
1985. 166p. Contract awarded in FY 1984 to Cambridge Systematics, Cambridge, MA 02139.

This study found that the small business community has an important stake in general state policy related to business property, even though property tax laws rarely distinguish by firm size. While it is possible to design relief programs that particularly help small business, it is not clear that property tax relief measures are the best method to achieve this end.

NTIS order number:
PB91-170068
Price codes:
A06 (Paper)
A01 (Microfiche)

Estimates of the Distributional and Revenue Effects of the Tax Reform Act of 1986 and the Omnibus Reconciliation Act of 1987 on U.S. Corporations

KPMG Peat Marwick, Policy Economics Group
1988. [109]p. Contract awarded in FY 1985 to Peat Marwick and Main Co., 1730 M Street NW, Suite 910, Washington, DC 20036.

This report presents a distributional and revenue analysis of the Tax Reform Act of 1986 and the Omnibus Reconciliation Act of 1987 on corporate tax liabilities. The data base uses 1985 corporate income tax return information. This is the third of four reports.

For the other reports completed under this contract, see Development of a Small Business Tax Model, Estimates of Effective Corporate Income Tax Rates, and The Impact of Federal Tax Reform on Small Business: A Simulation of the House Tax Reform Bill (H. R. 3838).

NTIS order number:
PB91-172775
Price codes:
A03 (Paper)
A01 (Microfiche)

Estimates of Effective Corporate Income Tax Rates

KPMG Peat Marwick, Policy Economics Group
1989. 26p. Contract awarded in FY 1985 to KPMG Peat Marwick, 1730 M Street NW, Suite 910, Washington, DC 20036.

This study shows that the general intent of the Tax Reform Act of 1986 and the Omnibus Reconciliation Act of 1987 was accomplished.  Rates became more uniform, but effective tax rates for small firms increased to a larger extent than those of larger firms.  This is the fourth of four reports.

For the other reports completed under this contract, see Development of a Small Business Tax Model, Estimates of the Distributional and Revenue Effects of the Tax Reform Act of 1986, and The Impact of Federal Tax Reform on Small Business: A Simulation  of the House Tax Reform Bill (H.R. 3838).

NTIS order number:
PB86-213782
Price codes:
A03 (Paper)
A01 (Microfiche)
RS number: 81

FICA; Federal Tax Deposits

Phillip Brown
1986. 43p. Contract awarded in FY 1985 to Brown Associates, Inc., 6405 Danville Court, Rockville, MD 20852.

Based upon an analysis of benefits and costs, this report recommends increasing the dollar thresholds that determine how frequently the Record of Federal Tax Liability must be filed and the frequency of deposits to the Treasury.

NTIS order number:
PB83-208447
Price codes:
A04 (Paper)
A01 (Microfiche)
RS number: 56

The Impact of Enterprise Zone Tax Incentives on Selected Small Businesses

Lawrence Revzan
1982, 60p. Contract awarded in FY 1982 to Coopers and Lybrand, 1800 M Street NW, Washington, DC 20036.

During a firm's early years, tax incentives have only a marginal effect on cash flow. The impact is greater in later years when the firm already has a positive cash flow. By themselves, incentives are not enough to influence a decision to start or relocate a business.

NTIS order number:
PB91-172064
Price codes:
A04 (Paper)
A01 (Microfiche)

The Impact of Federal Tax Reform on Small Business: A Simulation of the House Tax Reform Bill (H.R. 3838)

KPMG Peat Marwick, Policy Economics Group
1986. 55p. Contract awarded in FY 1985 to KPMG Peat Marwick, 1730 M Street NW, Suite 910, Washington, DC 20036.

This report analyzes the effect of the House Tax Reform Bill (H. R. 3838) using data bases and models developed for the Small Business Administration. H.R. 3838 was shown to have a significant impact on small businesses, because the tax burden on small firms is increased more than the burden on other firms.  This is the second of four reports.

For the other reports completed under this contract, see Development of a Small Business Tax Model, Estimates of the Distributional and Revenue Effects of the Tax Reform Act of 1986, and Estimates of Effective Corporate Income Tax Rates.

NTIS order number:
PB81-126690
Price codes:
A14 (Paper)
A01 (Microfiche)

Impact of State and Local Taxes on Small Business Compared to Their Impact on Large Businesses

Diane Fuchs
1980. 311p. Contract awarded in FY 1979 to Rosapepe, Fuchs and Associates, 1329 E Street NW, S-1242, Washington, DC 20004.

The purpose of this study was to examine the effects of state and local taxation on small businesses. This first stage in a planned two-stage project, it reviewed existing material on state and local taxes, identified and developed various hypotheses, and prepared an empirical research design to test the hypotheses in Massachusetts and California. The second stage would be to implement the research design with respect to income tax data.  The income tax was chosen because it represents a large cost for businesses and because a comprehensive data base is available.

NTIS order number:
PB86-157328
Price codes:
A07 (Paper)
A01 (Microfiche)

Income Tax Reform: Relative Implications for Small Business

Larry Dildine
1985. 142p. Contract awarded in FY 1984 to Price Waterhouse, 1801 K Street NW, Washington, DC 20006.

The study examined the effect of five alternative tax proposals on four corporate sizes in three industries. The study found that marginal tax rates increased with firm size due to graduated rates.

NTIS order number:
PB83-225771
Price codes:
A04 (Paper)
A01 (Microfiche)

Modeling Small Business Behavior in Michigan

Mark P. Haas
1980, 73p. Contract awarded in FY 1980 to the Independent Business Research Institute of Michigan, 972 Crimson Court, East Lansing, MI 48823.

This study sought to create a simulation/forecasting model to analyze the effects on small business of some changes in Michigan's business tax structure that were proposed in the late 1970s.

NTIS order number:
PB83-126714
Price codes:
A07 (Paper)
A01 (Microfiche)

Newspaper Groups: Economies of Scale, Tax Laws, and Merger Incentives

James N. Dertouzos and Kenneth E. Thorpe
1982. 140p. Contract awarded in FY 1980 to The Rand Corporation, 1700 Main Street, Santa Monica, CA 90406.

The purpose of this study was to examine the ownership structure of the newspaper industry to determine what economic motives cause mergers and how government policies affect independent newspaper ownership. It found that there were few measurable economic differences between newspaper firms owned by groups and those that are independent. Multi-firm economies of scale cannot explain the evolving ownership structure of the daily newspaper industry.

NTIS order number:
PB86-159878
Price codes:
A09 (Paper)
A01 (Microfiche)
RS number: 46

Relative Tax Burden by Firm Size and Industry

Jack Faucett
1985. 184p. Contract awarded in IFY 1983 to Jack Faucett Associates, Inc., 5454 Wisconsin Avenue, Chevy Chase, MD 20815.

This study measures effective corporate income tax rates and relative tax burdens by size of firm for the tax year 1980. It found that statutory differences in nominal rates favor small businesses, but various provisions in the tax laws regarding income excluded from the tax base and deductions allowed tend to favor either small or large businesses in terms of effective tax rates.

NTIS order number:
PB81-130601
Price codes:
A10 (Paper)
A01 (Microfiche)

Review of Federal Business Tax Incentives and an Analysis of Benefits by Business Size

Diane Fuchs
1980. 210p. Contract awarded in FY 1979 to Rosapepe, Fuchs and Associates, 1329 E Street NW, S-1242, Washington, DC 20004.

Throughout the history of the federal income tax, Congress has enacted various tax reduction provisions to encourage or discourage certain business activities. The purpose of this study was to review the history of several provisions of the tax code, ascertain whether or not they were intended to assist small firms, and, by analyzing empirical data, determine the extent to which the various tax reduction provisions benefit small firms.

NTIS order number:
PB85-226660
Price codes:
A05 (Paper)
A01 (Microfiche)

A Small Business Jobs Tax Credit versus a Small Business Jobs Tax Training Credit

Jack L. Rutner
1985. 83p. Contract awarded in FY 1983 to Joel Popkin &;Company, 1100 17th Street NW, Washington, DC 20036.

A jobs tax credit was found to benefit small business more than a training credit. Wage and retention rates in large business were higher. The data used in this study were from the Census Bureau's 1979 Current Population Survey.

NTIS order number:
PB82-185018
Price codes:
A03 (Paper)
A01 (Microfiche)

Stockholder Tax Rates, Size, and Firm Financial Policy

Alan J. Auerbach
1981. 44p. Contract awarded in FY 1980 to the National Bureau of Economic Research, 1050 Massachusetts Avenue, Cambridge, MA 02138.

This study is a wide-ranging theoretical and empirical analysis of the relationships among corporate and personal taxation, corporate financial policy, and firm size. A model incorporating the effects of corporate and personal taxation on a firm's capital structure is constructed. The study finds that, for a number of reasons, small firms benefit less than large firms from tax deductions such as interest expense and from changes in the tax code that accelerate depreciation or that otherwise allow increased deductions.

NTIS order number:
PB84-136761
Price codes:
A07(Paper)
A01 (Microfiche)

A Study to Determine the Effects of Alternative Taxes on Small Business

Paul Kochanowski, Paul Joray, John Peck, and Betty Vecchio
1981. 134p. Contract awarded in FY 1980 to the Indiana University Foundation, P.O. Box 1847, Bloomington, IN 47402.

One component of this study looks at the short-term implications for small business of the existing income tax and two proposed taxes – a value-added tax and a payroll tax. A second component attempts to answer two questions: (1) For each tax instrument analyzed, how much of the tax is shifted forward to consumers or backward onto factors of production? (2) For those tax instruments where the tax is shifted backward onto capital or
labor, how does this shift differ for capital and labor in small and large firms? The study finds a short-term gain for small firms in a shift from income to value-added or payroll taxes.

NTIS order number:
PB88-238803
Price codes:
A03 (Paper)
A01 (Microfiche)

Survey of Erroneous Penalties Imposed by IRS Relative to Employment Returns

Phillip Brown
1988. 44p. Contract awarded in FY 1986 to Brown Associates, Inc., 6405 Danville Court, Rockville, MD 20852.

This study examines erroneous penalty assessments on employment tax returns and the extent to which small business taxpayers elect to pay erroneous assessments instead of attempting to have the penalty removed. It also suggests ways of easing the burden of Internal Revenue Service procedures on small businesses. The study found that 26 percent of small business taxpayers said they had been assessed penalties; 64 percent of those said they were erroneous; and 89 percent of those said they protested. In 66 percent of these cases, IRS agreed the assessment was erroneous.

NTIS order number
PB81-167371
Price codes:
A07 (Paper)
A01 (Microfiche)
RS number: 11

Tax Law Effects on Business Concentration

Stephen J. Vasek
1979. 131p. Contract awarded in FY 1979 to the University of Kentucky, Kinkead Hall, East Wing, Lexington, KY 40506.

The study found that small businesses indirectly benefit from the double taxation of corporate dividends, which favors sole proprietorships. Large businesses benefit whenever they can shift income to foreign subsidiaries that pay lower taxes.

NTIS order number
PB83-180158
Price codes:
A03 (Paper)

Tax Policy, Acquisition Activities, and Earnings Retention Behavior: An Exploratory Economic Framework

Alan W. MacKinnon
1981. 50p. Contract awarded in FY 1979 to Merrill Lynch Economics, 165 Broadway, 1 Liberty Plaza, New York, NY 10080.

This paper explores two key tax policy issues with the objective of developing testable economic hypotheses regarding (1) the effects of tax policy (reorganization provisions) on acquisition activities, and (2) the effects of tax policy (especially the double taxation of dividends) on corporate earnings retention behavior.

NTIS order number:
PB85-159606
Price codes:
A04 (Paper)
A01 (Microfiche)
RS number: 39

Taxation, Inflation, and Small Business

Jerry R. Green
1984. 64p. Contract awarded in FY 1981 to Jerry Green, Inc., 6 Alcott Road, Lexington, MA 02173.

In an inflationary economy, real tax rates differ from nominal tax rates, according to this study. Real tax rates on most firms increase, with the heavier tax burden failing on the middle-size firms. Real tax rates were found to vary substantially by firm size and industry.

NTIS order number:
PB86-125069
Price codes:
A04 (Paper)
A01 (Microfiche)

The Taxation of Small Corporations

Richard L. Boyce and Charles R. Hulten

1985. 58p. Contract awarded in FY 1983 to The Urban Institute, 2100 M Street NW, Washington, DC 20037.

The study used the Hall-Jorgenson model for simulation of marginal effective tax rates. The study showed some tax advantage to the smallest firms, though all firms with assets of $25 million or more were considered large, a definition that differs from that used by the Small Business Administration.

NTIS order number:
PB85-111300
Price codes:
A11 (Paper)
A01 (Microfiche)

Taxes, Financial Policy, and Firm Size

Theodore E. Day, Hans R. Stoll, and Robert E. Whaley
1984. 241 p. Contract awarded in FY 1982 to Vanderbilt University, 416 Kirkland Hall, Nashville, TN 37240.

The demand for outside funding by small firms may be exaggerated, according to this report. Only 2 percent of firms surveyed would sell equity shares, while 90 percent would use bank financing.  Sixty-five percent of all small-firm respondents had no need for long-term debt or equity financing.

NTIS order number:
PB83-144485
Price codes:
A09 (Paper)
A01 (Microfiche)

The Value Added Tax and Small Business

Charles F. Palmer
1979. 187p. Contract awarded in FY 1979 to Wilmington College, Wilmington, OH 45177.

Since 1921, the value-added tax (VAT) has been discussed as a potential alternative to other taxes. Analyses have concentrated on the generality of the tax. This report assumes that the corporate income tax would be the tax most likely replaced by a VAT and analyzes items deducted under the corporate income tax in order to project potential investment under a VAT. The report challenges both the generality of the VAT and the idea that it
would support capital investment. A bibliography on the VAT and small business is included.