Deferred Taxation and Effective Tax Rates on Income from Capital in the United States, 2000-2010
The accounting and economic literature have long highlighted the potential implications of deferred taxation for tax policy analysis. This paper incorporates deferred taxation into the neoclassical investment model for the computation of the Effective Tax Rate (ETR) on business investment and revisits the empirical evidence on the evolution of ETRs in the United States over the last decade. The numerical results show that after including deferred taxation there is little differential in the ETRs across assets,ETRs in the 2000s have been essentially in line with statutory rates,and partial expensing had little effect on ETRs. These results hold whether investment is financed by equity or debt,profits are distributed to individual shareholders through dividends, interests or capital gains,and regardless of the differential between book and economic depreciation.
|Date of creation:||Jun 2011|
|Contact details of provider:|| Postal: Aberconway Building, Colum Drive, CARDIFF, CF10 3EU|
Phone: +44 (0) 29 20874417
Fax: +44 (0) 29 20874419
Web page: http://business.cardiff.ac.uk/research/academic-sections/economics/working-papers
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fabio Canova, 2007. "Bayesian Time Series and DSGE Models, from Methods for Applied Macroeconomic Research," Introductory Chapters,in: Methods for Applied Macroeconomic Research Princeton University Press.
- Mills, Lillian F. & Plesko, George A., 2003.
"Bridging the Reporting Gap: A Proposal for More Informative Reconciling of Book and Tax Income,"
National Tax Journal,
National Tax Association, vol. 56(4), pages 865-893, December.
- Plesko, George & Mills, Lillian, 2003. "Bridging the Reporting Gap: A Proposal for More Informative Reconciling of Book and Tax Income," Working papers 4289-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Mervyn A. King, 1974. "Taxation and the Cost of Capital," Review of Economic Studies, Oxford University Press, vol. 41(1), pages 21-35.
- Vito Polito, 2009. "Measuring the Effective Tax Burden in the Real World," Fiscal Studies, Institute for Fiscal Studies, vol. 30(2), pages 247-278, 06.
- Kanniainen, Vesa & Sodersten, Jan, 1995. "The importance of reporting conventions for the theory of corporate taxation," Journal of Public Economics, Elsevier, vol. 57(3), pages 417-430, July.
- Robin Boadway, 1980. "Corporate Taxation and Investment: A Synthesis of the Neo-Classical Theory," Canadian Journal of Economics, Canadian Economics Association, vol. 13(2), pages 250-267, May.
- Robin Boadway, 1979. "Corporate Taxation and Investment: A Synthesis of the NeoClassical Theory," Working Papers 324, Queen's University, Department of Economics.
- de Mooij, Ruud A & Ederveen, Sjef, 2003. "Taxation and Foreign Direct Investment: A Synthesis of Empirical Research," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(6), pages 673-693, November.
- Ruud de Mooij & S. Ederveen, 2001. "Taxation and foreign direct investment; a synthesis of empirical research," CPB Discussion Paper 3, CPB Netherlands Bureau for Economic Policy Analysis.
- Ruud A. de Mooij & Sjef Ederveen, 2001. "Taxation and Foreign Direct Investment: A Synthesis of Empirical Research," CESifo Working Paper Series 588, CESifo Group Munich.
- Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
- Boadway, R. W. & Bruce, N., 1979. "Depreciation and interest deductions and the effect of the corporation income tax on investment," Journal of Public Economics, Elsevier, vol. 11(1), pages 93-105, February.
- Michelle Hanlon & Terry Shevlin, 2005. "Book-Tax Conformity for Corporate Income: An Introduction to the Issues," NBER Chapters,in: Tax Policy and the Economy, Volume 19, pages 101-134 National Bureau of Economic Research, Inc.
- Mills, Lillian F., 2006. "Five Things Economists and Lawyers Can Learn From Accountants: An Illustration Using the Domestic Production Activities Deduction," National Tax Journal, National Tax Association, vol. 59(3), pages 585-597, September.
- Fabio Canova, 2007. "DSGE Models, Solutions, and Approximations, from Methods for Applied Macroeconomic Research," Introductory Chapters,in: Methods for Applied Macroeconomic Research Princeton University Press.
- repec:bla:joares:v:36:y:1998:i:2:p:357-363 is not listed on IDEAS
- Mervyn A. King & Don Fullerton, 1984. "The Taxation of Income from Capital: A Comparative Study of the United States, the United Kingdom, Sweden, and Germany," NBER Books, National Bureau of Economic Research, Inc, number king84-1, November. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cdf:wpaper:2011/14. 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: (Yongdeng Xu)
If references are entirely missing, you can add them using this form.