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Cash Flow or Income? The Choice of Base for Company Taxation

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  • Mintz, Jack M
  • Seade, Jesus

Abstract

Cash flow and equity income (or income) are two alternative bases advocated for taxes on businesses throughout the world. Although in practice most tax systems are hybrids with elements of both types of taxes, recent literature has stressed the merits of the cash flow tax because it is simple in concept and it does not distort decisions about capital expenditures and financing. But international issues and administrative complexities--particularly tax evasion--present problems that must be sorted out before a cash flow tax can be implemented. Copyright 1991 by Oxford University Press.

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  • Mintz, Jack M & Seade, Jesus, 1991. "Cash Flow or Income? The Choice of Base for Company Taxation," The World Bank Research Observer, World Bank, vol. 6(2), pages 177-190, July.
    • Handle: RePEc:oup:wbrobs:v:6:y:1991:i:2:p:177-90
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    1. 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.
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    1. Tsiopoulos, Thomas & Mintz, Jack M, 1996. "Latin American taxation of foreign direct investment in a global economy," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34291, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Pablo Serra, 1998. "Evaluación del Sistema Tributario Chileno y Propuesta de Reforma," Working Papers Central Bank of Chile 40, Central Bank of Chile.
    3. Ey, 2015. "Experiences with cash-flow taxation and prospects. Final report," Taxation Papers 55, Directorate General Taxation and Customs Union, European Commission.

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