The Ineffectiveness of Effective Tax Rates on Business Investment
Bob Chirinko
No 1704, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
In his Fisher-Schultz Lecture, Martin Feldstein examined the effects of non-neutral tax rules on business investment by estimating three econometric models, and he concluded that "the rising rate of inflation has, because of the structure of existing U.S. tax rules, substantially discouraged investment in the past 15 years." In a detailed examination of Feldstein's Effective Tax Rate model and a less extensive review of his other formulations (Neoclassical and Return-Over-Cost models), a number of important and independent criticisms are advanced. Our results from examining all three models suggest strongly that taxes have not adversely affected capital formation during the recent episode of inflation, a conclusion consistent with the relatively robust levels of net investment between 1965 and 1981 actually shown in the newly benchmarked National Income data.
Date: 1985-09
Note: EFG PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)
Published as Chirinko, Robert S. "The Ineffectiveness of Effective Tax Rates: A Comment on Feldstein's Fisher-Schultz Lecture," Journal of Public Economics Volume: 32 Issue: 3 (April 1987) Pages: 369-387
Downloads: (external link)
http://www.nber.org/papers/w1704.pdf (application/pdf)
Related works:
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:nbr:nberwo:1704
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w1704
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().