Loss-offset provisions in the corporate tax code and misallocation of capital
Loss-offset provisions in the corporate tax code and misallocation of capital
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DOI：
10.1016/j.jmoneco.2019.04.011
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发表时间：
2019-08
影响因子：
4.1
通讯作者：
B. Kaymak;Immo Schott
中科院分区：
文献类型：
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作者：
B. Kaymak;Immo Schott
The corporate tax code allows corporations to write off operating losses against past or future tax obligations, resulting in effective tax rates that are firm-specific and dependent on the history of the firm’s performance. Since losses partly reflect a drop in productivity, which is generally persistent, firms with higher expected productivity face higher tax rates. We analyze the distortionary effects of loss-offset provisions on investment and assess the output loss implied by the misallocation of capital. Replacing the corporate income tax with a revenue-neutral value-added tax which equates tax rates across firms leads to a 13.9% increase in aggregate output.
