Tax incentives applied against externalities: International examples of fat tax and carbon tax

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 ...

Externalities of Corporate Tax Avoidance

We show that when a meaningful proportion of firms in an economy engage in tax avoidance strategies, the covariance between a firm’s cash flow and the market cash flows increases, thereby increasing a firm’s cost of capital. This negative externality is imposed on all firms in the economy, not just tax-avoiding firms. The negative externality results regardless of the level of uncertainty assoc...

R&D Tax Incentives

Main findings: • Level-based R&D tax credits are subject to a serious deadweight loss. • Increment-based R&D tax credits are not subject to that deadweight loss, but have their own deficiencies. • The bulk of the empirical evidence concludes that there is no crowding-out but also little additionality. • R&D tax incentives have the advantage of being neutral, less costly to administer, and more ...

Will a Fat Tax Work? Will a Fat Tax Work?

BACKGROUND Of the many proposals to counter the obesity epidemic, the most contentious is the use of the “fat tax”. Previous investigations of the efficacy of price-based initiatives in altering consumption behavior have yielded contradictory findings. METHODS We use six years of milk sales data from 1,500 stores to investigate whether price incentives induce substitution to healthier alternati...

Tax Incentives: Issue and Evidence