A Superior Hybrid Cash-Flow Taxon Corporations
AbstractThis paper proposes a new hybrid cash-flow tax on corporations that, on one hand, taxes only excess corporate profits as they accrue, and, on the other hand, treats real and financial transactions neutrally. It is, therefore, a superior tax compared to the cash-flow tax on real transactions that seems to have gained common acceptance. The hybrid tax is a modified version of the cash-flow tax on real and financial transactions combined. The modification involves replacing expensing of fixed assets with normal depreciation allowances, but the undepreciated value of fixed assets is carried forward with interest at the opportunity cost of equity capital.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 06/117.
Date of creation: 01 May 2006
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ACC-2006-08-05 (Accounting & Auditing)
- NEP-ALL-2006-08-05 (All new papers)
- NEP-FMK-2006-08-05 (Financial Markets)
- NEP-PBE-2006-08-05 (Public Economics)
- NEP-PUB-2006-08-05 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- David Bradford, 2003. "Addressing the Transfer-Pricing Problem in an Origin-Basis X Tax," CESifo Working Paper Series 997, CESifo Group Munich.
- David F. Bradford, 1998.
"Transition to and Tax-Rate Flexibility in a Cash-Flow-Type Tax,"
in: Tax Policy and the Economy, Volume 12, pages 151-172
National Bureau of Economic Research, Inc.
- David F. Bradford, 1998. "Transition to and Tax Rate Flexibility in a Cash-Flow Type Tax," NBER Working Papers 6465, National Bureau of Economic Research, Inc.
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