财政学The Corporation Tax.ppt

Effects on Efficiency of Full Integration Misallocation of resources between corporate and non-corporate sectors eliminated Tax-induced distortions in savings decisions reduced Remove incentive for “excessive” retained earnings Reduce bias toward debt financing * * * * * * * * * * * * * * * * * * * $100,000 investment 35% corporate tax rate 10 year tax life straight-line depreciation 10% discount rate * $100,000 investment 35% corporate tax rate 5 year tax life straight-line depreciation 10% discount rate * $100,000 investment 35% corporate tax rate 10 year tax life double declining balance depreciation 10% discount rate * * * * * * * * * * 19-* CHAPTER 19 The Corporation Tax Copyright ? 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin I’ll probably kick myself for having said this, but when are we going to have the courage to point out that in our tax structure, the corporation tax is very hard to justify? President Ronald W. Reagan Corporations Corporation – A state-chartered form of business organization, usually with limited liability for shareholders (owners) and an independent legal status Limited liability Corporations are “artificial legal persons” Why Tax Corporations? Only real people can pay a tax Justifications Corporations are distinct entities Corporations receive special privileges from society Protects integrity of personal income tax Structure Revenue - Expenses incurred earning revenues Taxable Income * Tax rate (15% - 35%) Tax - Credits Total Tax Alternative Minimum Tax Treatment of Losses Treatment of Dividends versus Retained Earnings Double taxation Effective Tax Rate on Corporate Capital Statutory rate versus effective rate Interest deductibility Depreciation allowances Inflation Double taxation Gravelle [2004] Effective corporate rate = 32%; non-corporate rate = 18% Sensitivity of estimate Incidence and Excess Burden A tax on corporate capital Incidence in a general equilibrium model Exces