Neutral Taxation of Shareholder Income
AbstractA Norwegian tax reform committee recently proposed a personal tax on the realized income from shares after deduction for an imputed risk-free rate of return. This paper describes the design of the proposed shareholder income tax and shows that it will be neutral with respect to investment and financing decisions and decisions to realize capital gains, provided that full loss offsets are granted. Thus the tax allows some non-distortionary double taxation of corporate equity income. With an appropriate choice of tax rates, it also solves the problem of income shifting under a dual income tax. Copyright Springer Science + Business Media, Inc. 2005
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 12 (2005)
Issue (Month): 6 (November)
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Web page: http://www.springerlink.com/link.asp?id=102915
tax neutrality; shareholder income tax; corporate-personal tax integration;
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