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    Application:: Fundamental Tax Reform 737

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    penelopegerhard
    This document discusses corporate taxation and proposals for tax reform. It covers the impact of corporate taxes on investment, financing decisions, and international income. It also examines reasons for pursuing fundamental tax reform, including improving compliance, simplifying the tax code, and improving efficiency. However, broad tax reform faces political and economic challenges from interests that benefit from complications and loopholes in the current system.

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    Application:: Fundamental Tax Reform 737

    Uploaded by

    penelopegerhard
    15 views1 page
    This document discusses corporate taxation and proposals for tax reform. It covers the impact of corporate taxes on investment, financing decisions, and international income. It also examines reasons for pursuing fundamental tax reform, including improving compliance, simplifying the tax code, and improving efficiency. However, broad tax reform faces political and economic challenges from interests that benefit from complications and loopholes in the current system.

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    This document discusses corporate taxation and proposals for tax reform. It covers the impact of corporate taxes on investment, financing decisions, and international income. It also examines reasons for pursuing fundamental tax reform, including improving compliance, simplifying the tax code, and improving efficiency. However, broad tax reform faces political and economic challenges from interests that benefit from complications and loopholes in the current system.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views1 page

    Application:: Fundamental Tax Reform 737

    Uploaded by

    penelopegerhard
    This document discusses corporate taxation and proposals for tax reform. It covers the impact of corporate taxes on investment, financing decisions, and international income. It also examines reasons for pursuing fundamental tax reform, including improving compliance, simplifying the tax code, and improving efficiency. However, broad tax reform faces political and economic challenges from interests that benefit from complications and loopholes in the current system.

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    Application: What Is Economic Depreciation?

    The Case of Personal Computers 711


    Corporate Tax Rate 712
    Investment Tax Credit 712

    24.3 The Incidence of the Corporate Tax . . . . . . . . . . . . . . . 713

    24.4 The Consequences of the Corporate Tax for Investment . . . 714


    Theoretical Analysis of Corporate Tax and Investment Decisions 714
    Negative Effective Tax Rates 719
    Policy Implications of the Impact of the Corporate Tax on Investment 719
    Application: The Impact of the 1981 and 1986 Tax Reforms on Investment
    Incentives 720
    Evidence on Taxes and Investment 721

    24.5 The Consequences of the Corporate


    Tax for Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722
    The Impact of Taxes on Financing 722
    Why Not All Debt? 723
    The Dividend Paradox 726
    How Should Dividends Be Taxed? 727
    Application: The 2003 Dividend Tax Cut 728
    Corporate Tax Integration 729

    24.6 Treatment of International Corporate Income . . . . . . . . . 730


    How to Tax International Income 730
    Application: A Tax Holiday for Foreign Profits 731

    24.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734

    Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734

    Questions and Problems . . . . . . . . . . . . . . . . . . . . . . . . . . 735

    Advanced Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736

    CHAPTER 25 Fundamental Tax Reform . . . . . . . . . . . . . . . 737


    25.1 Why Fundamental Tax Reform? . . . . . . . . . . . . . . . . . . 738
    Improving Tax Compliance 739
    Application: Tax Evasion 739
    Application: The 1997 IRS Hearings and Their Fallout for Tax Collection 742
    Making the Tax Code Simpler 743
    Improving Tax Efficiency 745
    Summary: The Benefits of Fundamental Tax Reform 748

    25.2 The Politics and Economics of Tax Reform . . . . . . . . . . . 748


    Political Pressures for a Complicated Tax Code 749
    Economic Pressures Against Broadening the Tax Base 749

    xxv

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