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On the consequences of eliminating capital tax differentials
- 1.0504876 - NHU-C 2020 RIV CA eng J - Journal Article
Slavík, Ctirad - Yazici, H.
On the consequences of eliminating capital tax differentials.
Canadian Journal of Economics-Revue Canadienne D Economique. Roč. 52, č. 1 (2019), s. 225-252. ISSN 0008-4085. E-ISSN 1540-5982
R&D Projects: GA ČR(CZ) GBP402/12/G097
Institutional support: Progres-Q24
Keywords : corruption * foreign direct investment * competitive advantage
OECD category: Applied Economics, Econometrics
Impact factor: 0.710, year: 2019
Method of publishing: Open access
https://onlinelibrary.wiley.com/doi/pdfdirect/10.1111/caje.12370
In the United States, different types of capital are effectively taxed at different rates. In particular, effective tax rates on structures have been higher than those on equipments. Eliminating these differentials has been the subject of policy debates. This paper analyzes the consequences of eliminating capital tax differentials using an incomplete markets model with equipment–skill complementarity. The reform improves productive efficiency by eliminating distortions in capital accumulation. It also increases the degree of equality by reducing the skill premium. The reform increases average welfare by approximately 0.11%.
Permanent Link: http://hdl.handle.net/11104/0296420
Number of the records: 1