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A dynamic measure of the effective tax rate

Author

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  • Paolo M. Panteghini

    (University of Brescia and CESifo)

Abstract

This article shows how the existing forward-looking measures of the effective tax rate may be biased when firms operate in a dynamic context. Using option pricing techniques we thus propose a measure of the effective tax rate which embodies future business changes.

Suggested Citation

  • Paolo M. Panteghini, 2003. "A dynamic measure of the effective tax rate," Economics Bulletin, AccessEcon, vol. 8(15), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-03h20004
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    File URL: http://www.accessecon.com/pubs/EB/2003/Volume8/EB-03H20004A.pdf
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    References listed on IDEAS

    as
    1. Devereux, Michael P & Hubbard, R Glenn, 2003. "Taxing Multinationals," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(4), pages 469-487, August.
    2. Boadway, Robin & Bruce, Neil, 1984. "A general proposition on the design of a neutral business tax," Journal of Public Economics, Elsevier, vol. 24(2), pages 231-239, July.
    3. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    4. Paolo Panteghini, 2002. "Endogenous Timing and the Taxation of Discrete Investment Choices," CESifo Working Paper Series 723, CESifo.
    5. Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Paolo Panteghini & Guttorm Schjelderup, 2006. "To Invest or not to Invest: A real options approach to FDIs and tax competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(6), pages 643-660, November.
    2. Jan Vlachý, 2015. "Measuring the Effective Tax Burden of Lifetime Personal Income," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2015(3), pages 5-14.
    3. Paolo Panteghini, 2004. "Wide vs. Narrow Tax Bases under Optimal Investment Timing," CESifo Working Paper Series 1246, CESifo.
    4. Jan Vlachý, 2008. "K daňové uznatelnosti nákladů z úvěrů: Analýza pomocí opčního modelu [Investigating a thin-capitalization rule: An option-based analysis]," Politická ekonomie, Prague University of Economics and Business, vol. 2008(5), pages 656-668.
    5. Jan Vlachý, 2017. "Analýza daňových systémů středoevropských zemí pomocí statistické simulace [An Analysis of Central European Tax Systems Using Statistical Simulation]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(4), pages 410-423.

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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