Consumption-Based Tax Systems and Investment Neutrality: Does the Corporation Income Tax Depreciation Method Impact Investment Capital Value?

Heinhold, Michael; Hüsing, Silke; Pasch, Helmut

doi:10.1007/bf03396620

Cited by 3 publications

(1 citation statement)

References 9 publications

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“…Die Festsetzung eines geeigneten Zinssatzes dürfte dabei entgegen jüngst erhobener Kritik an der Zinsbereinigung (vgl. Heinhold et al, 2000) kein wesentliches Problem darstellen. Da sich gerade bei einer Modellierung unter Unsicherheit zeigen lässt, dass die "sichere Verzinsung", die in der Praxis hinreichend gut durch die Umlaufrendite von Staatstiteln angenähert werden kann, den ökonomisch zu fordernden Standardzins darstellt (vgl.…”

Section: "Das Zunächst Mögliche"unclassified

Steuerreform(en) und ihr übersehenes Kernproblem

Knoll¹

2000

WIST

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Section: "Das Zunächst Mögliche"unclassified

Steuerreform(en) und ihr übersehenes Kernproblem

Knoll¹

2000

WIST

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Is analytical tax research alive and kicking? Insights from 2000 until 2022

Niemann

Sailer

2023

J Bus Econ

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This literature review evaluates the development and impact of analytical tax research (ATR) from 2000 until 2022. Based on 345 research papers, we (1) identify emerging and declining research topics in the area of ATR, (2) examine the trends in publication outlets and author teams, and (3) analyze citation metrics at both the level of articles and authors to measure perception and impact of ATR. First, we find that rather new topics, such as the impact of taxation on entrepreneurship, innovation and R&D, have begun to attract attention. Second, tax journals are not the preferred outlet for ATR and author teams exhibit a decreasing gender imbalance. Third, citation metrics are highly centered on specific publications and individual authors. Moreover, publications that appeared in economics and finance journals generate disproportionately large citation numbers compared to those that were published in tax, accounting and business research journals. Authors from Anglo-American institutions have significantly more citations than researchers from German-speaking countries. We find that ATR does not form a closed community. It unites researchers from different backgrounds based on their— sometimes nonrecurring—thematic interest in the effects of taxation on economic decisions.

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Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity

Lammersen¹

2002

SSRN Journal

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0247.pdf Non-technical SummaryIn recent years, a number of European countries have relied on elements of an allowance for corporate equity (ACE) in the design of their tax systems. Making use of an allowance for corporate equity, firms may deduct an imputed rate of return -the so-called protective interest rate -on their equity for the determination of taxable income. Furthermore, a pure ACE-based tax system would be designed as a personal consumption tax. Income from interest payments at arm's-length-conditions would therefore be exempt from personal income taxation.The effective tax burden thus varies with the rate of return of an investment. This variation has an effect on the firms' cost of capital, i.e. the pre-tax rate of return at which an investor is indifferent between investing and not investing. Besides this minimum rate of return and the effective marginal tax rate (EMTR), which can be derived thereon, the prominent role of effective average tax rates (EATR) is more and more recognised in economics and business management. EATRs denote the effective tax burden on inframarginal investments, i.e. investments that earn more than the minimum rate of return.This paper investigates the basic effects of corporate tax systems which rely on an allowance for corporate equity on rates of return, EMTRs, and EATRs. By relying on a simple model, we show how neutrality with respect to investment decisions -which exists under some strict assumptions -is lost in case the protective interest rate deviates from the market interest rate.Also, we show how the relevance of the allowance for corporate equity decreases with an increasing rate of return. We conclude that a country might weaken its position in tax competition for very profitable investments by switching towards an ACE-tax, supposed the country cannot adjust headline tax rates to be in accordance with those of competing countries which have a broader tax base. These findings might theoretically explain why some countries have recently turned away from the ACE-concept.Besides, by relying on our model we can gain interesting insights into the revenue effects of an ACE-based tax system. We find that some robust revenues seem to be generated by combinations of low protective interest rates and medium statutory tax rates, which, however, should not exceed the statutory tax rates of competing locations. Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity Lotha...

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Consumption-Based Tax Systems and Investment Neutrality: Does the Corporation Income Tax Depreciation Method Impact Investment Capital Value?

Cited by 3 publications

References 9 publications

Steuerreform(en) und ihr übersehenes Kernproblem

Steuerreform(en) und ihr übersehenes Kernproblem

Is analytical tax research alive and kicking? Insights from 2000 until 2022

Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity

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