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On the design of a neutral business tax under uncertainty.

Abstract:

This paper extends the results of Boadway and Bruce (Journal of Public Economics, 1984, 24, 231–239) and Fane (Journal of Public Economics, 1987, 33, 95–105) to describe a tax on business profits which is neutral with respect to investment and wind-up decisions, and default outcomes, under uncertainty and bankruptcy risk. The tax base allows deductions for depreciation and the cost of finance, but requires knowledge of neither true economic depreciation nor the firm's required rate of return....

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Authors


Stephen R. Bond More by this author
Michael P. Devereux More by this author
Volume:
W93/01
Series:
IFS Working Papers
Publication date:
1993
URN:
uuid:9ec5e74a-54bd-412c-a125-1e62d11c10da
Local pid:
oai:economics.ouls.ox.ac.uk:12924
Language:
English

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