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Business, taxation and welfare

Grant reference: RES-060-25-0033

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Journal article details

Issues in the design of taxes on corporate profit
This paper considers the proposals of the Mirrlees Review to introduce an allowance for corporate equity (ACE) in the corporation tax system. It assesses how an ACE would affect various dimensions of corporate decision making. Broadly, the ACE would introduce neutrality in decisions as to the scale of investment and the source of finance. But it would leave distortions in choices regarding many mutually exclusive discrete choices, such as location and profit shifting. The paper presents some evidence on the likely impact of introducing an ACE, which depends on how the government makes up for foregone corporation tax revenue. It also considers briefly more radical options such as a destination-based corporate tax.
English

Primary contributor

Author Michael Devereux

Additional details

65
Yes
0028-0283
National Tax Association
01 September 2012
709-730
Washington, DC
Post-print
National tax journal