Capital taxation and imperfect competition: ACE vs. CBIT

• 成果类型: Article
• 署名作者: Brekke, Kurt R.; Garcia Pires, Armando J.; Schindler, Dirk; Schjelderup, Guttorm
• 署名单位: Norwegian School of Economics (NHH); Norwegian School of Economics (NHH); Norwegian School of Economics (NHH); Norwegian School of Economics (NHH)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2016.12.010
• 发表日期: 2017
• 页码: 1-15
• 关键词: Optimal corporate taxation; Corporate tax reform; imperfect competition; ACE; CBIT

摘要

This paper compares the Comprehensive Business Income Tax (CBIT) and the Allowance for Corporate Equity tax (ACE) under imperfect competition using an oligopoly Salop model and a monopolistic competition model. A key insight is that the effect of a switch to either tax system depends on technology and the intensity of competition. Both tax systems are distortionary when entry is endogenous. Using the Salop model, we show that ACE (CBIT) tends to improve welfare in decreasing returns (increasing returns) to scale industries, whereas the two regimes are welfare neutral in constant returns to scale industries. (C) 2016 Elsevier B.V. All rights reserved.