A Tax Proposal to Smooth Business Cycles, Encourage Investment and Remove Biases Against Small Firms
AbstractProposal: Treat profits and losses symmetrically so that the taxing authority shares in losses in the same proportion as it shares in profits. Just as companies making profits pay a share of those profits in taxes, companies make losses would receive a subsidy or negative tax from the government that would be a similar share of the losses. This proposal will reduce the volatility of the business cycle, eliminate the tax biases against small firms and new ventures, reduce distortions caused by capital market imperfections, and encourage risk taking.
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Bibliographic InfoPaper provided by Boston University - Industry Studies Programme in its series Papers with number 87.
Length: 22 pages
Date of creation: 1998
Date of revision:
Contact details of provider:
Postal: Boston University, Industry Studies Program; Department of Economics, 270 Bay Road, Boston, Massachusetts 02215.
Web page: http://www.bu.edu/econ/isp/
More information through EDIRC
BUSINESS CYCLES ; INVESTMENTS;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
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