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Corporate Tax Asymmetries under Investment Irreversibility

  • Paolo M. Panteghini

This article studies the effects of corporate tax asymmetries on irreversible investment. We discuss an asymmetric tax scheme where the tax base is given by the firm's return,net of an imputation rate. When the firm's return is less than this rate, however, no tax refunds are allowed. Contrary to common wisdom, this asymmetric scheme may be neutral even when assuming a long-lasting income uncertainty. Neutrality holds even if we add both capital and political uncertainty.

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Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 58 (2001)
Issue (Month): 3 (July)
Pages: 207-

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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200207)58:3_207:ctauii_2.0.tx_2-6
Contact details of provider: Web page: http://www.mohr.de/fa

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