THE CORPORATE INCOME TAX: ECONOMIC ISSUES AND POLICY OPTIONS

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...

Simulating Corporate Marginal Income Tax Rates and Implications for Corporate Debt Policy

We study several important tax-related issues related to the measurement and use of corporate marginal tax rates. First, we develop an AR(1) method to simulate corporate marginal income tax rates and demonstrate that the AR(1) model improves upon the extant random walk and bin approaches. The new AR(1) approach captures firm-specific features, including mean-reversion in taxable income. Second,...

Tax Simplification: Issues and Options

The notion that taxes should be simpler is one of the very few propositions in tax policy that generates almost universal agreement. The fundamental paradox of tax simplification is that despite this consensus, almost every year tax rules become more complex. This report, based on recent congressional testimony, examines a broad range of issues regarding tax complexity. Section II discusses the...

Search Costs and Corporate Income Tax Competition

This paper studies corporate tax competition if it is costly to learn some of the elements that determine the e¤ective tax burden. Search cost may, but need not, eliminate the tax competition pressure. The outcome depends on the boundaries of tax rate and tax base choices. Search cost can explain the empirically observed tax cuts cum base broadening. Keywords: Costly search, tax competition, co...

Women’s Economic Empowerment: Key Issues and Policy Options