The destabilizing effect of company income taxation
The destabilizing effect of company income taxation
Author(s): Peter Alfons SchmidSubject(s): Micro-Economics, Economic development, Public Finances, Fiscal Politics / Budgeting
Published by: Akadémiai Kiadó
Keywords: company income taxation; tax incidences; DSGE modeling; business cycles;
Summary/Abstract: This paper examines the effects of company income taxation. Therefore, a tax system is implemented in a dynamic, stochastic macroeconomic model with endogenous financial structure. In addition to the long-term level effects that are in line with the deterministic public economics literature, cyclical effects are identified. Besides insurance incidences, company income taxation implies amplifying effects. Depending on the model’s frictions, the latter can dominate and lead to more volatile business cycles.
Journal: Society and Economy. In Central and Eastern Europe ǀ Journal of the Corvinus University of Budapest
- Issue Year: 35/2013
- Issue No: 3
- Page Range: 365-388
- Page Count: 24
- Language: English