Tax incentives and borrowing

Tax Incentives for Household Saving and Borrowing

The paper reviews the literature on these tax incentives, with special focus on long-term saving, housing, and household liabilities. The paper addresses several areas of policy intervention: (1) the interest rate effect on personal saving; (2) the effect of tax incentives on long-term mandatory saving programs; (3) government programs that target saving for home purchase; (4) government progra...

Tax Policy and Corporate Borrowing

Aggregate statistics readily indicate why so many observers of financial markets in the United States are concerned about the balance between debt and equity in the corporate financial decision. Exceeding zero in most years before 1984, net equity issues by U.S. nonfinancial corporations have been negative in each year since. Net redemptions averaged approximately $80 billion annually during th...

Tax compliance with borrowing constraints

This paper considers a simple dynamic model of tax compliance in which people may face binding borrowing constraints. The model leads to much different conclusions and policy recommendations than static models. In particular, the government cannot generate full compliance by setting the expected value of cheating to be negative. Also, it is possible for the government to set penalties in a way ...

Tax Incentives to Encourage

Much has been said about the importance of innovation, especially after the rise of globalization and implementation of more open markets. In this paper, we will show how innovation is linked to schools of thoughts that sought to explain and understand what would lead nations to reach a certain degree of long-term development, since the model of Joseph Schumpeter in the mid-1930s until Romer’s ...

Tax Incentives: Issue and Evidence