Knut Bleicher zum 70. Geburtstag

Eberhard Seidel
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Eberhard Seidel: Universität Gesamthochschule Siegen

Schmalenbach Journal of Business Research, 1999, vol. 51, issue 4, 377-404

Abstract: Summary For purposes of regional location supporting, special depreciation allowances, (tax-free) investment premiums, and (taxable) investment grants are used. Contrary to the common view, the investment grant is shown to be preferable: It is the only instrument where the effectiveness of supporting does not depend on the tax rate of the investor. The value of supporting (measured by disadvantage before tax) increases with the tax rate for investment premiums. For special depreciation allowances, supporting can even increase after tax with the tax rate. Both instruments can lead to inefficiency, and both instruments favor investors with high tax rates, contrary to the criterion of distributional justice.

Date: 1999
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DOI: 10.1007/BF03371571

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