Taxation, Inflation and the User Cost of Capital in Canada
AbstractThis paper analyzes corporate and personal income taxes and inflation on the cost of investing in depreciable and inventory capital in Canada in 1963-78. Changes in rates of inflation and corporate tax rates theoretically have an ambiguous effect on the cost of capital. Tax depreciation and FIFO allowances based on historical prices can increase capital costs with inflation and decrease capital costs with corporate tax rates. Assuming all capital is owned by Canadian residents we find the gross of tax return to capital has not changed much in Canada over time for all types of capital considered. Effective tax rates were also measured, these vary considerably by type of capital and over time
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 506.
Date of creation: 1982
Date of revision:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Auerbach, Alan J, 1983.
"Taxation, Corporate Financial Policy and the Cost of Capital,"
Journal of Economic Literature,
American Economic Association, vol. 21(3), pages 905-40, September.
- Alan J. Auerbach, 1984. "Taxation, Corporate Financial Policy and the Cost of Capital," NBER Working Papers 1026, National Bureau of Economic Research, Inc.
- Don Fullerton, 1984. "Which Effective Tax Rate?," NBER Working Papers 1123, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Babcock).
If references are entirely missing, you can add them using this form.