Notes on cash - flow taxation
Under cash-flow taxation, a country can tax the cash flow of domestic producers, domestic residents, or domestic citizens. The implications are different in each case. The paper examines the positive and normative effects of various versions of a cash-flow tax, focusing on the effects of such a tax in a small open economy. A country must decide, for example, whether investment in each type of asset will be taxed based on its cash flow or will instead be entirely tax exempt. The economic implications differ, depending on whether the government decides or the choice may be left to each tax payer. In addition tax flow rates may vary: as a result of a progressive rate schedule; according to the type of tax payer; or over time, depending on economic conditions. Substantial problems can result from each type of variation. Finally, inequities can arise during the transition to a cash-flow tax. Different inequities arise depending on what tax precedes the cash-flow tax. And a partial introduction of cash-flow taxation may open important arbitrage opportunities.
|Date of creation:||30 Jun 1989|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
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.:
- 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.
- Kenneth L. Judd, 1984.
"The Welfare Cost of Factor Taxation in a Perfect Foresight Model,"
643, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Judd, Kenneth L, 1987. "The Welfare Cost of Factor Taxation in a Perfect-Foresight Model," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 675-709, August.
- Gordon, Roger H, 1986. "Taxation of Investment and Savings in a World Economy," American Economic Review, American Economic Association, vol. 76(5), pages 1086-1102, December.
- David G. Hartman, 1981. "Tax Policy and Foreign Direct Investment," NBER Working Papers 0689, National Bureau of Economic Research, Inc.
- Roger H. Gordon, 1981. "Taxation of Corporate Capital Income: Tax Revenues vs. Tax Distortions," NBER Working Papers 0687, National Bureau of Economic Research, Inc.
- Gordon, Roger & Kalambokidis, Laura & Slemrod, Joel, 2004.
"Do we now collect any revenue from taxing capital income?,"
Journal of Public Economics,
Elsevier, vol. 88(5), pages 981-1009, April.
- Roger H. Gordon & Laura Kalambokidis & Joel Slemrod, 2003. "Do We Now Collect Any Revenue From Taxing Capital Income?," NBER Working Papers 9477, National Bureau of Economic Research, Inc.
- Sandmo, Agnar, 1974. "A Note on the Structure of Optimal Taxation," American Economic Review, American Economic Association, vol. 64(4), pages 701-06, September.
- McGuire, Martin, 1974. "Group Segregation and Optimal Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 112-32, Jan.-Feb..
- Roger H. Gordon & Joel Slemrod, 1988. "Do We Collect Any Revenue from Taxing Capital Income?," NBER Chapters, in: Tax Policy and the Economy: Volume 2, pages 89-130 National Bureau of Economic Research, Inc.
- Martin Feldstein & David Hartman, 1979. "The Optimal Taxation of Foreign Source Investment Income," The Quarterly Journal of Economics, Oxford University Press, vol. 93(4), pages 613-629.
- Chris Doyle & Sweder Wijnbergen, 1994.
"Taxation of foreign multinationals: A sequential bargaining approach to tax holidays,"
International Tax and Public Finance,
Springer, vol. 1(3), pages 211-225, October.
- Doyle, Christopher & van Wijnbergen, Sweder, 1984. "Taxation of Foreign Multinationals: A Sequential Bargaining Approach to Tax Holidays," CEPR Discussion Papers 25, C.E.P.R. Discussion Papers.
- Fullerton, Don & Shoven, John B. & Whalley, John, 1983.
"Replacing the U.S. income tax with a progressive consumption tax : A sequenced general equilibrium approach,"
Journal of Public Economics,
Elsevier, vol. 20(1), pages 3-23, February.
- Don Fullerton & John B. Shoven & John Whalley, 1982. "Replacing the U.S. Income Tax with a Progressive Consumption Tax: A Sequenced General Equilibrium Approach," NBER Working Papers 0892, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:210. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.