Business tax policy under default risk

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).

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Year of publication:	2019
Authors:	Comincioli, Nicola ; Vergalli, Sergio ; Panteghini, Paolo
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	capital structure \| default risk \| business taxation and welfare

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Series:	CESifo Working Paper ; 7664
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	1668737906 [GVK] hdl:10419/201890 [Handle] RePec:ces:ceswps:_7664 [RePEc]
Classification:	H25 - Business Taxes and Subsidies ; G33 - Bankruptcy; Liquidation ; G38 - Government Policy and Regulation
Source:	EconStor

Persistent link: https://www.econbiz.de/10012052770