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A GENERAL EQUILIBRIUM EVALUATION OF CORPORATE INCOME TAX REFORM
Author(s) -
HENDERSON YOLANDA KODRZYCKI
Publication year - 1987
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1987.tb00761.x
Subject(s) - economics , investment (military) , income tax , general equilibrium theory , corporate tax , capital (architecture) , tax reform , microeconomics , state income tax , labour economics , monetary economics , public economics , tax avoidance , archaeology , politics , political science , law , history
This study provides new insights into the effects of the corporate income tax by introducing a general equilibrium model in which households choose portfolios composed of housing and non‐housing assets, industries make investment decisions based on Hall‐Jorgenson cost‐of‐capital formulas, and the corporate‐noncorporate mix in each industry is endogenous. The annual efficiency cost of an unintegrated tax on corporations is found to be about 3 1/2 percent of expanded national income. This new estimate is intended to spur further investigation of individuals' demand for owner‐occupied housing and firms' decisions about incorporation.