IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v53y1986i2p205-225..html
   My bibliography  Save this article

The Dynamic Effects of Tax Law Asymmetries

Author

Listed:
  • Alan J. Auerbach

Abstract

Under the laws of most countries, a distinction is made between gains and losses by businesses. Losses that must be "carried forward" are subjept to two penalties: a loss of interest, and expiration. Previous examinations have focused on the higher expected tax payments such a tax system without "full loss offset" imposes on risky projects. This paper presents a dynamic analysis of the impact of taxation on investment when gains and losses are treated asymmetrically. The results demonstrate how firm characteristics and the timing of taxes can influence behaviour.

Suggested Citation

  • Alan J. Auerbach, 1986. "The Dynamic Effects of Tax Law Asymmetries," Review of Economic Studies, Oxford University Press, vol. 53(2), pages 205-225.
  • Handle: RePEc:oup:restud:v:53:y:1986:i:2:p:205-225.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/2297647
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alan J. Auerbach, 1982. "The New Economics of Accelerated Depreciation," NBER Working Papers 0848, National Bureau of Economic Research, Inc.
    2. J. E. Stiglitz, 1969. "The Effects of Income, Wealth, and Capital Gains Taxation on Risk-Taking," The Quarterly Journal of Economics, Oxford University Press, vol. 83(2), pages 263-283.
    3. Evsey D. Domar & Richard A. Musgrave, 1944. "Proportional Income Taxation and Risk-Taking," The Quarterly Journal of Economics, Oxford University Press, vol. 58(3), pages 388-422.
    4. King, Mervyn A., 1975. "Taxation, corporate financial policy, and the cost of capital : A comment," Journal of Public Economics, Elsevier, vol. 4(3), pages 271-279, August.
    5. repec:mes:challe:v:26:y:1983:i:4:p:56-57 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:53:y:1986:i:2:p:205-225.. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.