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

Author : Yevhenii Usenko

Publisher :

Page : 0 pages

File Size : 30,17 MB

Release : 2023

Category :

ISBN :

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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 Great Inflation

Author : Michael D. Bordo

Publisher : University of Chicago Press

Page : 545 pages

File Size : 37,67 MB

Release : 2013-06-28

Category : Business & Economics

ISBN : 0226066959

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Book Description

Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.



Taxes, Loans, and Inflation

Author : C. Eugene Steuerle

Publisher : Brookings Institution Press

Page : 232 pages

File Size : 22,79 MB

Release : 1985

Category : Business & Economics

ISBN :

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Book Description

Research papers on the relations between income tax, credit policy and inflation in the USA - covers individual income tax, corporation tax, interest rates, credit system, tax and financial arbitrage, macroeconomics of fiscal policy, tax incentives for saving and investment, effects on business organizations, prescriptions for major tax reform (return to the gold standard). References, statistical tables.







The Impact of Inflation on Financial Activity in Business, with Applications to the U.S. Farming Sector

Author : Yaaqov Goldschmidt

Publisher : Rowman & Littlefield

Page : 230 pages

File Size : 47,63 MB

Release : 1986

Category : Business & Economics

ISBN : 9780847674275

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Book Description

This important book contributes significantly to our understanding of financial analysis in an inflationary environment. Major topics covered include the interest charges on working capital, the effect of debt finance on liquidity, the impact of inflation on tax liability resulting from interest on loans, and income measurement with a special emphasis on performance evaluation.



Inflation, Taxation, and Corporate Behavior

Author : Roger H. Gordon

Publisher :

Page : 21 pages

File Size : 31,6 MB

Release : 2010

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ISBN :

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Book Description

During the past decade, the inflation rate has been very high by historical standards, yet the U.S. tax law has yet to adjust to this fact. The purpose of this paper is to investigate to what degree the lack of indexing of the corporate and personal income taxes by itself ought to have resulted in a change in corporate investment and financial policy, and in capital gains or losses to existing owners of corporate equity. In studying these questions, the paper models corporate financial and real decisions simultaneously, unlike other recent studies. The principle conclusions of the paper are: 1) the doubling of corporate debt-value rations can easily be rationalized solely by the interaction of inflation and the tax laws, 2) the stock market and the level of investment behaved much less favourably than would have been forecast focusing solely on the increased inflation rate, and 3) more pessimistic expectations, perhaps in combination with increased riskiness, would provide a consistent rationale for observed behaviour.



Inflation Tax

Author : Pete Comley

Publisher : Pete Comley

Page : 222 pages

File Size : 11,42 MB

Release : 2013

Category : Business & Economics

ISBN : 0957303815

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Book Description

Inflation Tax is the first book to present in simple easy to read way why inflation is such a big problem in the UK (even at low levels). It is reducing the standard of living of most people and redistributing wealth from savers to debtors. The book shows that inflation is not a mere by-product of random economic forces. Instead it is a stealth tax primarily paid by savers and pensioners. Furthermore, it has been used by successive governments since 1945 as a tool to manage the UK's debts. The book examines likely future inflation scenarios in the UK and the best ways to save and invest in those environments. Contents: SECTION I - INFLATION 1. Inflation - why you should be worried 2. What is inflation? 3. Theories of inflation 4. Measuring inflation: RPI/CPI SECTION II - DEBT 5. Government debt and the UK's Financial Dunkirk 6. Labour's post war solution to the debt 7. US inflation reduces UK debts 8. Debt: 1970s onwards SECTION III - INFLATION TAX 9. The benefits of inflation tax 10. Who pays inflation tax? 11. Disguising inflation tax 12. Problems with inflation tax SECTION IV - THE IMPLICATIONS 13. How to pay less inflation tax 14. Future debt and inflation scenarios 15. Concluding thoughts



Inflation, Tax Rules, and Capital Formation

Author : Martin Feldstein

Publisher : University of Chicago Press

Page : 312 pages

File Size : 46,43 MB

Release : 2009-05-15

Category : Business & Economics

ISBN : 0226241793

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Book Description

Inflation, Tax Rules, and Capital Formation brings together fourteen papers that show the importance of the interaction between tax rules and monetary policy. Based on theoretical and empirical research, these papers emphasize the importance of including explicit specifications of the tax system in such study.