Zeynep Burcu Bulut-Cevik | Middle East Technical University (original) (raw)

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Papers by Zeynep Burcu Bulut-Cevik

Research paper thumbnail of Robots and Welfare

Research paper thumbnail of The Khaldûn−Laffer Curve Revisited: A Personal Income Tax−Based Analysis for Turkey

Transylvanian Review of Administrative Sciences, 2019

The objective of this paper is to revisit as well as empirically examine an old but still discuss... more The objective of this paper is to revisit as well as empirically examine an old but still discussed postulate, the Khaldun-Laffer curve, on the basis of personal income tax by making use annual time-series data for Turkey for the period 1970-2015. The findings of the paper confirm the validity of the Khaldun-Laffer curve hypothesis. In addition, we infer that the optimal tax rate that maximizes the tax revenue generated from personal income taxation in Turkey is 15.03 percent. This rate is well-below than the current rate which we estimate as 15.37 percent, implying that Turkey's current tax rate for personal income tax takes place in the prohibitive range of the Khaldun-Laffer curve. These findings suggest that the current tax rate should be lowered and to its optimal level to collect more tax revenue. Getting down the current rate to its revenue-maximizing rate not only would it enable the Turkish authorities to collect more revenues with a relatively lower rate, but also would allow them to minimize the substitution effects of personal income tax while maximizing the income revenues from it.

Research paper thumbnail of The Revenue-Maximizing Corporate Income Tax Rate for Turkey

Romanian Journal of Economic Forecasting, 2021

This paper empirically explores the revenue-maximizing corporate income tax rate for Turkey by us... more This paper empirically explores the revenue-maximizing corporate income tax rate for Turkey by using annual time-series data for the period from 1980 to 2019. Overall, we identify two key findings. First, corporate income tax rates are nonlinearly associated with revenues from corporate taxation, confirming the existence of an inverted U-shaped relationship between the two variables. Second, the estimated revenue-maximizing corporate income tax rate is found to be 23.5%, slightly above Turkey’s current statutory corporate income tax rate of 22%. These findings indicate that the current rate is only 1.5 percentage points lower than its revenue-maximizing value and thus there is little room for Turkish authorities for reaching a revenue-maximizing peak through tax rate hikes. The most striking result that emerges from our empirical analysis is that raising revenues from corporate taxation further through statutory corporate income tax rate hikes is not an appropriate tax policy option for Turkey. Instead, it may be a more plausible policy option to go corporate income tax cuts that have positive implications for economic growth and employment and by implication for government taxation in the long run. If the Turkish policymakers insist on revenue-raising through corporate taxation, they should focus exclusively on macroeconomic and non-macroeconomic factors that would increase the size and profitability of the corporate sector.

Research paper thumbnail of Koç University-Tüsi̇ad Economic Research Forum Working Paper Series Fiscal Decentralization, Redistribution and Growth

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized ... more This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model’s optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate.

Research paper thumbnail of Fiscal Decentralization, Redistribution and Growth

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized ... more This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model’s optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate.

Research paper thumbnail of FISCAL DECENTRALIZATION , REDISTRIBUTION AND GROWTH Bilin

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized ... more This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model’s optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate. Key Terms: Fiscal decentralization, redistribution JE...

Research paper thumbnail of Does Fiscal Decentralization Promote Fiscal Discipline?

We investigate the efficiency and equity implications of a redistributive rule that takes into ac... more We investigate the efficiency and equity implications of a redistributive rule that takes into account both local tax collection efforts and deviation of local incomes from respective targets under alternative fiscal mechanisms. We show that, if the general budget constraint is binding, the proposed transfer rule leads to higher fiscal discipline under fiscal decentralization (FD) than under centralized redistribution. Although the centralized decision yields better income distribution than FD, FD also improves income distribution unambiguously when equalization across regions is targeted explicitly. When localities act strategically, the private sector's utility weight enhances the disciplinary effect of decentralization.

Research paper thumbnail of The Khaldûn−Laffer curve revisited: A personal income tax−based analysis for Turkey

Transylvanian Review of Administrative Sciences, 2019

This paper focuses on an old but still discussed postulate, the Khaldûn-Laffer curve, and empiric... more This paper focuses on an old but still discussed postulate, the Khaldûn-Laffer curve, and empirically applies it to personal income tax by using annual time-series data of Turkey for the period 1970-2015. From our analysis, two fundamental findings emerge: first, Turkish data provides evidence in favor of the Khaldûn-Laffer curve, suggesting that there is a non-linearity between tax rates and tax revenue. Second, the optimal tax rate that maximizes revenue from personal income tax is 15.03% against the current rate we estimate at 15.37%. These findings imply that Turkey's current personal income tax rate falls slightly into the prohibitive range of the curve. Overall, it is safe to argue that the current personal income tax rate should be lowered to its optimal value to maximize the revenue from personal income taxation. If done so, the Turkish fiscal authorities would be able to generate more revenue with a relatively lower tax rate.

Research paper thumbnail of The Khaldun-Laffer Curve Revisited: A Personal Income Tax-Based Analysis for Turkey

Munich Personal RePEc Archive MPRA Working Paper, 2017

The objective of this paper is to revisit as well as empirically examine an old but still discuss... more The objective of this paper is to revisit as well as empirically examine an old but still discussed postulate, the Khaldun-Laffer curve, on the basis of personal income tax by making use annual time-series data for Turkey for the period 1970-2015. The findings of the paper confirm the validity of the Khaldun-Laffer curve hypothesis. In addition, we infer that the optimal tax rate that maximizes the tax revenue generated from personal income taxation in Turkey is 15.03 percent. This rate is well-below than the current rate which we estimate as 15.37 percent, implying that Turkey's current tax rate for personal income tax takes place in the prohibitive range of the Khaldun-Laffer curve. These findings suggest that the current tax rate should be lowered and to its optimal level to collect more tax revenue. Getting down the current rate to its revenue-maximizing rate not only would it enable the Turkish authorities to collect more revenues with a relatively lower rate, but also would allow them to minimize the substitution effects of personal income tax while maximizing the income revenues from it.

Research paper thumbnail of Robots and Welfare

Research paper thumbnail of The Khaldûn−Laffer Curve Revisited: A Personal Income Tax−Based Analysis for Turkey

Transylvanian Review of Administrative Sciences, 2019

The objective of this paper is to revisit as well as empirically examine an old but still discuss... more The objective of this paper is to revisit as well as empirically examine an old but still discussed postulate, the Khaldun-Laffer curve, on the basis of personal income tax by making use annual time-series data for Turkey for the period 1970-2015. The findings of the paper confirm the validity of the Khaldun-Laffer curve hypothesis. In addition, we infer that the optimal tax rate that maximizes the tax revenue generated from personal income taxation in Turkey is 15.03 percent. This rate is well-below than the current rate which we estimate as 15.37 percent, implying that Turkey's current tax rate for personal income tax takes place in the prohibitive range of the Khaldun-Laffer curve. These findings suggest that the current tax rate should be lowered and to its optimal level to collect more tax revenue. Getting down the current rate to its revenue-maximizing rate not only would it enable the Turkish authorities to collect more revenues with a relatively lower rate, but also would allow them to minimize the substitution effects of personal income tax while maximizing the income revenues from it.

Research paper thumbnail of The Revenue-Maximizing Corporate Income Tax Rate for Turkey

Romanian Journal of Economic Forecasting, 2021

This paper empirically explores the revenue-maximizing corporate income tax rate for Turkey by us... more This paper empirically explores the revenue-maximizing corporate income tax rate for Turkey by using annual time-series data for the period from 1980 to 2019. Overall, we identify two key findings. First, corporate income tax rates are nonlinearly associated with revenues from corporate taxation, confirming the existence of an inverted U-shaped relationship between the two variables. Second, the estimated revenue-maximizing corporate income tax rate is found to be 23.5%, slightly above Turkey’s current statutory corporate income tax rate of 22%. These findings indicate that the current rate is only 1.5 percentage points lower than its revenue-maximizing value and thus there is little room for Turkish authorities for reaching a revenue-maximizing peak through tax rate hikes. The most striking result that emerges from our empirical analysis is that raising revenues from corporate taxation further through statutory corporate income tax rate hikes is not an appropriate tax policy option for Turkey. Instead, it may be a more plausible policy option to go corporate income tax cuts that have positive implications for economic growth and employment and by implication for government taxation in the long run. If the Turkish policymakers insist on revenue-raising through corporate taxation, they should focus exclusively on macroeconomic and non-macroeconomic factors that would increase the size and profitability of the corporate sector.

Research paper thumbnail of Koç University-Tüsi̇ad Economic Research Forum Working Paper Series Fiscal Decentralization, Redistribution and Growth

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized ... more This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model’s optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate.

Research paper thumbnail of Fiscal Decentralization, Redistribution and Growth

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized ... more This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model’s optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate.

Research paper thumbnail of FISCAL DECENTRALIZATION , REDISTRIBUTION AND GROWTH Bilin

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized ... more This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model’s optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate. Key Terms: Fiscal decentralization, redistribution JE...

Research paper thumbnail of Does Fiscal Decentralization Promote Fiscal Discipline?

We investigate the efficiency and equity implications of a redistributive rule that takes into ac... more We investigate the efficiency and equity implications of a redistributive rule that takes into account both local tax collection efforts and deviation of local incomes from respective targets under alternative fiscal mechanisms. We show that, if the general budget constraint is binding, the proposed transfer rule leads to higher fiscal discipline under fiscal decentralization (FD) than under centralized redistribution. Although the centralized decision yields better income distribution than FD, FD also improves income distribution unambiguously when equalization across regions is targeted explicitly. When localities act strategically, the private sector's utility weight enhances the disciplinary effect of decentralization.

Research paper thumbnail of The Khaldûn−Laffer curve revisited: A personal income tax−based analysis for Turkey

Transylvanian Review of Administrative Sciences, 2019

This paper focuses on an old but still discussed postulate, the Khaldûn-Laffer curve, and empiric... more This paper focuses on an old but still discussed postulate, the Khaldûn-Laffer curve, and empirically applies it to personal income tax by using annual time-series data of Turkey for the period 1970-2015. From our analysis, two fundamental findings emerge: first, Turkish data provides evidence in favor of the Khaldûn-Laffer curve, suggesting that there is a non-linearity between tax rates and tax revenue. Second, the optimal tax rate that maximizes revenue from personal income tax is 15.03% against the current rate we estimate at 15.37%. These findings imply that Turkey's current personal income tax rate falls slightly into the prohibitive range of the curve. Overall, it is safe to argue that the current personal income tax rate should be lowered to its optimal value to maximize the revenue from personal income taxation. If done so, the Turkish fiscal authorities would be able to generate more revenue with a relatively lower tax rate.

Research paper thumbnail of The Khaldun-Laffer Curve Revisited: A Personal Income Tax-Based Analysis for Turkey

Munich Personal RePEc Archive MPRA Working Paper, 2017

The objective of this paper is to revisit as well as empirically examine an old but still discuss... more The objective of this paper is to revisit as well as empirically examine an old but still discussed postulate, the Khaldun-Laffer curve, on the basis of personal income tax by making use annual time-series data for Turkey for the period 1970-2015. The findings of the paper confirm the validity of the Khaldun-Laffer curve hypothesis. In addition, we infer that the optimal tax rate that maximizes the tax revenue generated from personal income taxation in Turkey is 15.03 percent. This rate is well-below than the current rate which we estimate as 15.37 percent, implying that Turkey's current tax rate for personal income tax takes place in the prohibitive range of the Khaldun-Laffer curve. These findings suggest that the current tax rate should be lowered and to its optimal level to collect more tax revenue. Getting down the current rate to its revenue-maximizing rate not only would it enable the Turkish authorities to collect more revenues with a relatively lower rate, but also would allow them to minimize the substitution effects of personal income tax while maximizing the income revenues from it.