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Taxation of profits when there are profits

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  • Gersovitz, Mark

Abstract

Profits taxes fall on both pure profits and the use of capital as an input. Simulations of a Cournot oligopoly suggest that gains from the former are not outweighed by losses from the latter.

Suggested Citation

  • Gersovitz, Mark, 2010. "Taxation of profits when there are profits," Economics Letters, Elsevier, vol. 107(2), pages 145-147, May.
    • Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:145-147
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    References listed on IDEAS

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    1. Carlo Perroni & John Whalley, 1998. "Rents And The Cost And Optimal Design Of Commodity Taxes," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 357-364, August.
    2. Chirinko, Robert S., 2002. "Corporate Taxation, Capital Formation,and the Substitution Elasticity Between Labor and Capital," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(2), pages 339-355, June.
    3. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
    4. Guo, Jang-Ting & Lansing, Kevin J., 1999. "Optimal taxation of capital income with imperfectly competitive product markets," Journal of Economic Dynamics and Control, Elsevier, vol. 23(7), pages 967-995, June.
    5. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production II: Tax Rules," American Economic Review, American Economic Association, vol. 61(3), pages 261-278, June.
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    Keywords

    Profits taxation Cournot;

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