Business Tax Policy under Default Risk
22 Pages Posted: 10 Jul 2019
There are 2 versions of this paper
Business Tax Policy Under Default Risk
CESifo Working Paper No. 7664
Number of pages: 20
Posted: 25 Jul 2019
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38
Date Written: July 10, 2019
Abstract
In this article we use a stochastic model with one representative firm to study business tax policy under default risk. We will show that, for a given tax rate, the government has an incentive to reduce (increase) financial instability and default costs if its objective function is welfare (tax revenue).
Keywords: Capital Structure, Default Risk, Business Taxation and Welfare
JEL Classification: H25, G33, G38
Suggested Citation: Suggested Citation
Comincioli, Nicola and Vergalli, Sergio and Panteghini, Paolo M., Business Tax Policy under Default Risk (July 10, 2019). FEEM Working Paper No. 11.2019, Available at SSRN: https://ssrn.com/abstract=3417592 or http://dx.doi.org/10.2139/ssrn.3417592
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