› › Corporate Taxation And Accounting For Inflation

Taxes, Loans and Inflation

Author : C. Eugene Steuerle

Publisher : Brookings Institution Press

Page : 224 pages

File Size : 41,44 MB

Release : 2010-12-01

Category : Business & Economics

ISBN : 9780815721031

Get eBook

Book Description

Income from capital receives uneven treatment in both the tax system and the loan markets. This affects almost every investment decision make by the individuals, business, and government and causes major disruptions in the economy. In this book C. Eugene Steuerle shows how the misallocation of capital results from the interaction of tax laws, the operation of the market for loanable funds, and inflation. He first analyzes the taxation of capital income, focusing on the distortions caused by tax arbitrage and on inflation-induced discriminations among both taxpayer and borrowers. The author then applies this analysis to several related issues. He concludes with a reform agenda that calls for the adoption of a broader-based, flatter-rate income tax.













Inflation, Taxation and Corporate Investment in the U.S. During the Great Inflation

Author : Yevhenii Usenko

Publisher :

Page : 0 pages

File Size : 46,68 MB

Release : 2023

Category :

ISBN :

Get eBook

Book Description

U.S. corporate taxation is not neutral to inflation. Two of its features -- historical cost depreciation and FIFO inventory accounting -- are expected to lower real after-tax corporate cash flows and, thereby, make investment less attractive when expected inflation is elevated. Using Compustat data for 1965-1980 and a difference-in-differences research design, I do not find evidence in support of this hypothesis. I discuss possible explanations for this non-result. In addition, I find a robust effect of statutory tax changes on corporate investment during the Great Inflation. The effect is economically meaningful and consistent with the prior literature: a tax reform that increases firm's cost of capital by 10% lowers investment of affected firms by 2 percentage points of total assets relative to firms not affected by the reform.





The Inflation-adjusted Rate of Return on Corporate Debt and Equity, 1966-1980

Author : Stuart C. Gilson

Publisher :

Page : 92 pages

File Size : 19,89 MB

Release : 1984

Category : Accounting

ISBN :

Get eBook

Book Description

"This report has two main objectives: First, to determine whether the real tax rate on investment income has proven sensitive to inflation; second, to determine the extent to which real returns to debt and equity, based on published data, differ from those based on inflation-adjusted data. The scope of the inflationary distortion in corporate income is assessed, and the resulting estimate is used to calculate the real after-tax rate of return on Canadian corporate debt and equity for the 1966-80 period. The author departs from previous studies of the Canadian corporate sector in his definition of returns to corporate activity. His definition reflects the view that the cost of corporate capital is governed by the after-tax returns accruing to individual investors from their debt and equity claims on the corporate sector. Two empirical regularities are found: 1) the real after-tax rate of return on debt and equity calculated with full inflation accounting is consistently below the rate based on unadjusted data; and, 2) the inflation-adjusted real tax rate on investment income appears to increase with inflation over the sample period." -- Abstract.



Taxation, Technology, and the User Cost of Capital

Author : E. Biørn

Publisher : Elsevier

Page : 338 pages

File Size : 48,41 MB

Release : 2017-07-26

Category : Business & Economics

ISBN : 1483296245

Get eBook

Book Description

The definition and measurement of the cost of using real capital as an input in production has been much discussed and approached in several ways in earlier literature. This present study attempts to give a unified treatment of the cost of capital services, with emphasis on its relation to the corporate tax system on the one hand, and to the production technology of the firm on the other. It provides a thorough discussion of capital as a factor of production, relating the measurement of the price of capital services to the measurement of capital stock.A parallel treatment of capital and its service price with a neo-classical technology and with a putty-clay technology is presented. The book also discusses and unifies different concepts of neutrality of income taxation presented in the public finance literature. Illustrations based on data for the manufacturing sector of the Norwegian economy are given, relating partly to the actual tax system and partly to more or less hypothetical tax reforms. The study is intended to serve as a reference for researchers in econometric model building, corporate investment behaviour, tax analysis, and national accounting.