Research ArticleOpen AccessGoogle Scholar indexed
Corporate Deductibility Provisions and Financial Constraints of Innovative Entrepreneurs
Ifo Institute for Economic Research, University of Munich, Munich, Germany
University of Freiburg, Freiburg, Germany
Norwegian Center for Taxation (NoCeT), NHH, Bergen, Norway
- 1 Ifo Institute for Economic Research, University of Munich, Munich, Germany
- 2 University of Freiburg, Freiburg, Germany
- 3 Norwegian Center for Taxation (NoCeT), NHH, Bergen, Norway
Theoretical Economics Letters·Volume 07 (2017)·Pages 1602–1606·Published 8 September 2017·DOI10.4236/tel.2017.76108
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Abstract
Corporate income tax systems around the world typically favor debt over equity in the tax base definition. The resulting distortions on financing and investment decisions of corporations are well documented in the existing literature. In this paper, we focus on the ACE proposal by the Mirrlees Review [1] . It is shown that an ACE, which mitigates the unequal treatment of returns to owned and borrowed capital, fosters innovation by financing startups.
KeywordsAllowance for Corporate EquityCorporate Income Tax SystemsEntrepre-neurshipFinancePublic Policy
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