Business Tax Policy under Default Risk

Nicola Comincioli, Sergio Vergalli and Paolo Panteghini
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Nicola Comincioli: University of Brescia and Fondazione Eni Enrico Mattei

No 2019.11, Working Papers from Fondazione Eni Enrico Mattei

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: 2019-07
New Economics Papers: this item is included in nep-cfn, nep-ore and nep-pbe
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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:fem:femwpa:2019.11

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