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«Neutral» Profit Taxation, Risk Taking and Optimal Profit Taxation

Published online by Cambridge University Press:  17 August 2016

Jack M. Mintz
Jack M. Mintz*
Affiliation:
Queen’s University
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Extract

In recent years a number of public finance economists have argued for cash flow taxation whereby investment costs would be immediately deducted from taxable profit and no depreciation and financing costs would be deducted (see the Meade report (1978)). Such a profit tax has been found to be neutral in the sense that marginal investment and financing decisions are unaffected by taxation except through general equilibrium effects on interest rates.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 48 , Issue 2 , 1982 , pp. 107 - 132
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1982 

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Footnotes

*

I am indebted to Maurice Marchand who provided useful comments in preparation of this final draft. Errors remain my own responsibility. I am grateful for the financial support of the Social Sciences and Humanities Research Council of Canada.

References

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