Taxing Risky Investment

Michael Devereux

No 919, Working Papers from Oxford University Centre for Business Taxation

Abstract: This paper re-examines the impact of consumption and capital income taxes on (a) the incentive to undertake risky investment and (b) the revenue generated from such taxes. It challenges a well-known claim in the literature that a capital income tax with full loss offset can leave incentives to invest "basically unaffected" because the tax liability is offset by a reduction in the post-tax risk of the investment. Instead, it argues that such a tax would have a significantly negative impact on the incentive to invest.

JEL-codes: E22 H25 H32 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Citations: View citations in EconPapers (4)

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Working Paper: Taxing Risky Investment (2003)
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