Working Paper: NBER ID: w1058
Authors: Mervyn A. King; Don Fullerton
Abstract: This working paper presents Chapter 2 of a book that has been submitted to the University of Chicago Press for publication consideration. The point of the book is to compare taxes on income from capital infour countries,accounting for corporate, personal, and property taxes, and including national, regional, and local level taxes. We describe statutory tax ratesand other tax rules in each country, and calculate overall effective marginal tax rates for different combinations of asset, industry, source of finance,and ownership categories.This chapter defines the methodological problems of estimating effective tax rates on income from capital, and it defines the limits of this analysisby pointing out areas that are excluded by this study. It sets out the parameters that need to be estimated for each country, and describes other data requirements involving the amount of each capital asset located in each industry, financed by each source, and owned by each ownership category.
Keywords: taxation; income from capital; effective tax rates; investment incentives
JEL Codes: H25; H32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Effective marginal tax rates (H29) | Flow of private savings into corporate investments (O16) |
| Statutory tax rates (H29) | Effective tax rates (H29) |
| Effective tax rates (H29) | Investment behavior of firms (G31) |
| Taxes (H29) | Wedge between returns on savings and investment (G19) |
| Wedge between returns on savings and investment (G19) | Decisions of savers and investors (G11) |
| Tax structure (H20) | Economic growth (O49) |
| Different tax treatments (H25) | Varying investment behaviors (G11) |