Business tax policy under default risk

Nicola Comincioli, Sergio Vergalli and Paolo Panteghini

No 7664, CESifo Working Paper Series from CESifo

Abstract: In this article we use a stochastic model with one representative firm to study business tax policy under default risk. We will show that, for a given tax rate, the government has an incentive to reduce (increase) financial instability and default costs if its objective function is welfare (tax revenue).

Keywords: capital structure; default risk; business taxation and welfare (search for similar items in EconPapers)
JEL-codes: G33 G38 H25 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cfn, nep-ore, nep-pbe, nep-pub and nep-rmg
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Related works:
Working Paper: Business Tax Policy under Default Risk (2019)
Working Paper: Business Tax Policy under Default Risk (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7664

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