The Tax Paradox and Weak Tax Neutrality

Ramon Lopez, Pablo Gutiérrez C. and Eugenio Figueroa ()
Authors registered in the RePEc Author Service: Pablo A. Gutiérrez C.

Working Papers from University of Chile, Department of Economics

Abstract: We introduce the concept of weak tax neutrality which establishes that the relationship between the tax rate and the user cost of capital may be non-monotonic. We show that most existing corporate tax systems allow for weak neutrality. That is, given the tax allowances permitted by these systems, it is possible that neutrality may arise for at least one positive corporate tax rate. Moreover, we show the practical relevance of weak neutrality in realistic situations where there are several asset types and heterogeneous levels of firms’ debt ratios.

Pages: 40 pages
Date: 2019-03
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.econ.uchile.cl/uploads/publicacion/9925 ... a26a2cdc54110053.pdf

Related works:
Journal Article: The Tax Paradox and Weak Tax Neutrality (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:udc:wpaper:wp481

Access Statistics for this paper

More papers in Working Papers from University of Chile, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mohit Karnani ().