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A dynamic measure of the effective tax rate

Author

Listed:
  • Paolo M. Panteghini

    (University of Brescia and CESifo)

Abstract

This article shows how the existing forward-looking measures of the effective tax rate may be biased when firms operate in a dynamic context. Using option pricing techniques we thus propose a measure of the effective tax rate which embodies future business changes.

Suggested Citation

  • Paolo M. Panteghini, 2003. "A dynamic measure of the effective tax rate," Economics Bulletin, AccessEcon, vol. 8(15), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-03h20004
    as

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    File URL: http://www.accessecon.com/pubs/EB/2003/Volume8/EB-03H20004A.pdf
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    References listed on IDEAS

    as
    1. Devereux, Michael P & Hubbard, R Glenn, 2003. "Taxing Multinationals," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(4), pages 469-487, August.
    2. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    3. Boadway, Robin & Bruce, Neil, 1984. "A general proposition on the design of a neutral business tax," Journal of Public Economics, Elsevier, vol. 24(2), pages 231-239, July.
    4. Paolo Panteghini, 2002. "Endogenous Timing and the Taxation of Discrete Investment Choices," CESifo Working Paper Series 723, CESifo.
    5. Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
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    Citations

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    Cited by:

    1. Paolo Panteghini & Guttorm Schjelderup, 2006. "To Invest or not to Invest: A real options approach to FDIs and tax competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(6), pages 643-660, November.
    2. Jan Vlachý, 2015. "Measuring the Effective Tax Burden of Lifetime Personal Income," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2015(3), pages 5-14.
    3. Paolo Panteghini, 2004. "Wide vs. Narrow Tax Bases under Optimal Investment Timing," CESifo Working Paper Series 1246, CESifo.
    4. Jan Vlachý, 2008. "K daňové uznatelnosti nákladů z úvěrů: Analýza pomocí opčního modelu [Investigating a thin-capitalization rule: An option-based analysis]," Politická ekonomie, Prague University of Economics and Business, vol. 2008(5), pages 656-668.
    5. Jan Vlachý, 2017. "Analýza daňových systémů středoevropských zemí pomocí statistické simulace [An Analysis of Central European Tax Systems Using Statistical Simulation]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(4), pages 410-423.

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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