Measuring The Impact Of Taxation On Investment And Financing Decisions
AbstractEffective tax rates are a useful tool for policy makers as well as for business managers who might demand condensed but sophisticated information on investment tax burdens. Our paper discusses the measurement of the effective tax rate on profitable investment, i.e., investment that generates an economic rent. Based on an approach presented by Devereux and Griffith, we develop a standard measure of the effective average tax rate. This measure is directly connected with the widely used effective marginal tax rate. The measure uses a comparison with the statutory tax rate to indicate whether or not an investment is tax advantaged.
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Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 54 (2002)
Issue (Month): 1 (January)
Find related papers by JEL classification:
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
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