Welfare effects of investment incentive policies: A quantitative assessment

Hans Fehr

No 57, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: This paper deals with the intergenerational incidence of corporate tax policies in the overlapping generation model. Corportate tax reforms affect the welfare levels of individuals via three Channels: (i) changes in the net. tax burdens, (ii) changes in the factor prices, and (iii) changes in deadweight loss associated with the taxes. We develop formulas to isolate t.hese effects in a closed and a smal] open economy and then apply these formulas to a policy experiment, similar to a recent German corporate tax reform plan. The simulations suggest that generations' utility changes are mainly due to intergenerational income effects. While in closed economies changes in net tax burdens are most important especially in the short-run, the revaluation of the initial capital stock is an important redistribution Channel in the smail open economy.

Keywords: Dynamic CGE modelling; Investment incentives; intergenerational tax incidence; equal yield tax reform (search for similar items in EconPapers)
JEL-codes: C68 H22 (search for similar items in EconPapers)
Date: 1995
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/104857/1/tdb057.pdf (application/pdf)

Related works:
Working Paper: Welfare Effects of Investment Incentive Policies: A Quantitative Assessment
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:zbw:tuedps:57

Access Statistics for this paper

More papers in Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().