テクニカルレポート

ディスカッション／ワーキング・ペーパー

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Institute of Social and Economic Research Discussion Papers. 2014, 913, p. 1-42

Dynamic Effects of Anticipated and Temporary Tax Changes in a R&D-based Growth Model

Takao, Kizuku

The Institute of Social and Economic Research, Osaka University

英語

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2014-08

https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2014/DP0913.pdf

Tax changes are often announced before their implementation and are not permanent, but rather only temporary. Accordingly, R&D firms will optimally adjust their investment decisions to fit tax schedule changes. This study analyzes how changes in various tax rates relevant to corporate activities affect growth and welfare, considering their methods of implementation. For this purpose, we consider adjustment costs involved in the investment process and allow firms to make a forward looking investment decision in a R&D-based endogenous growth model. Calibrating the model with U.S. data, we find that a dividend tax cut reduces the level of welfare irrespective of implementation method. On the other hand, a capital gains tax cut and a rise in the R&D tax credit rate enhance the level of welfare irrespective of implementation. However, the announcement of these tax changes prior to implementation reduces their effectiveness.

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Dynamic Effects of Anticipated and Temporary Tax Changes in a R&D-based Growth Model

Takao, Kizuku

The Institute of Social and Economic Research, Osaka University

英語

2014-08

Institute of Social and Economic Research Discussion Papers

913

1

42

https://hdl.handle.net/11094/50620

https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2014/DP0913.pdf