NEUTRAL EX-ANTE INCOME TAXATION IN THE PRESENCE OF ADJUSTMENT COSTS AND RISK

Authors
MCKENZIE KJ
Citation
Kj. Mckenzie, NEUTRAL EX-ANTE INCOME TAXATION IN THE PRESENCE OF ADJUSTMENT COSTS AND RISK, Public finance, 48(2), 1993, pp. 250-267
Citations number
26
Categorie Soggetti
Economics,"Public Administration","Business Finance
Journal title
Public finance → ACNP
ISSN journal
00333476
Volume
48
Issue
2
Year of publication
1993
Pages
250 - 267
Database
ISI
SICI code
0033-3476(1993)48:2<250:NEITIT>2.0.ZU;2-N
Abstract
The investment neutrality of a full loss offset income tax which grant s ex ante, or historical cost, depreciation allowances is examined in the concurrent presence of income and capital risk and convex capital adjustment costs. In general the neutral ex ante tar depreciation rate is shown to be time varying and stochastic, and reflects both the sys tematic and unsystematic, capital and income risk characteristics of t he investment.