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Asymmetric Taxation under Incremental and Sequential Investment

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  • PAOLO M. PANTEGHINI

Abstract

This paper discusses the effects of an asymmetric tax scheme on incremental and sequential investment strategies. The tax base is equal to the firm's return, net of an imputation rate. When the firm's return is less than this rate, however, no tax refunds are allowed. This scheme is neutral under both income and capital uncertainty. Copyright 2005 Blackwell Publishing Inc..

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Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 7 (2005)
Issue (Month): 5 (December)
Pages: 761-779

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Handle: RePEc:bla:jpbect:v:7:y:2005:i:5:p:761-779

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Cited by:
  1. Niemann, Rainer & Sureth, Caren, 2009. "Investment effects of capital gains taxation under simultaneous investment and abandonment flexibility," arqus Discussion Papers in Quantitative Tax Research 77, arqus - Arbeitskreis Quantitative Steuerlehre.
  2. Fahr, René & Janssen, Elmar & Sureth, Caren, 2014. "Can tax rate increases foster investment under entry and exit flexibility? Insights from an economic experiment," arqus Discussion Papers in Quantitative Tax Research 166, arqus - Arbeitskreis Quantitative Steuerlehre.
  3. Paolo Panteghini, 2005. "S-Based Taxation under Default Risk," CESifo Working Paper Series 1496, CESifo Group Munich.
  4. Ralf Ewert & Rainer Niemann, 2010. "Limited Liability, Asymmetric Taxation, and Risk Taking - Why Partial Tax Neutralities can be Harmful," CESifo Working Paper Series 3301, CESifo Group Munich.
  5. Rainer Niemann & Caren Sureth, 2011. "The Impact of Differential Capital Income Taxation on the Value of Risky Projects," Economics Bulletin, AccessEcon, vol. 31(2), pages 1047-1054.
  6. Wong, Kit Pong, 2011. "Progressive taxation and the intensity and timing of investment," Economic Modelling, Elsevier, Elsevier, vol. 28(1-2), pages 100-108, January.
  7. Michele Moretto & Paolo M. Panteghini & Carlo Scarpa, 2007. "Profit Sharing and Investment by Regulated Utilities: a Welfare Analysis," "Marco Fanno" Working Papers, Dipartimento di Scienze Economiche "Marco Fanno" 0059, Dipartimento di Scienze Economiche "Marco Fanno".
  8. Wong, Kit Pong, 2009. "Progressive taxation, tax exemption, and corporate liquidation policy," Economic Modelling, Elsevier, Elsevier, vol. 26(2), pages 295-299, March.
  9. Luis H. R. Alvarez & Erkki Koskela, 2005. "Progressive Taxation and Irreversible Investment under Uncertainty," CESifo Working Paper Series 1377, CESifo Group Munich.
  10. Niemann, Rainer & Sureth, Caren, 2008. "Steuern und Risiko als substitutionale oder komplementäre Determinanten unternehmerischer Investitionspolitik?," arqus Discussion Papers in Quantitative Tax Research 51, arqus - Arbeitskreis Quantitative Steuerlehre.
  11. Meißner, Fabian & Schneider, Georg & Sureth, Caren, 2013. "The impact of corporate taxes and flexibility on entrepreneurial decisions with moral hazard and simultaneous firm and personal level taxation," arqus Discussion Papers in Quantitative Tax Research 141, arqus - Arbeitskreis Quantitative Steuerlehre.
  12. James L. Smith, 2012. "Modeling the Impact of Taxes on Petroleum Exploration and Development," IMF Working Papers 12/278, International Monetary Fund.
  13. James L. Smith, 2012. "Issues in Extractive Resource Taxation," IMF Working Papers 12/287, International Monetary Fund.
  14. Smith, James L., 2013. "Issues in extractive resource taxation: A review of research methods and models," Resources Policy, Elsevier, Elsevier, vol. 38(3), pages 320-331.
  15. Mehrmann, Annika & Schneider, Georg & Sureth, Caren, 2012. "Asymmetric taxation of profits and losses and its influence on investment timing: Paradoxical effects of tax increases," arqus Discussion Papers in Quantitative Tax Research 134, arqus - Arbeitskreis Quantitative Steuerlehre.

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