Can corporate taxation be explained by limited liability?

Miglo, A. (2010) Can corporate taxation be explained by limited liability? In: Berube, W. J. and Pinto, C. N. (eds.) Taxation, Tax Policies and Income Taxes. Series: Monetary, fiscal and trade policies series. Nova Science Publishers: New York, pp. 201-205. ISBN 9781607416265

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We consider a model where wealth-constrained entrepreneurs have private information about the qualities of available investment projects. We show that some "high risk-high return" projects will receive external financing even if they are not socially profitable. Some "low risk-low return" projects will not be funded even if they are socially profitable. Government interventions can improve equilibrium. Optimal government policy may include corporate taxation, subsidies or other instruments. A universal tax on all entrepreneurs with limited liability is not optimal.

Item Type:Book Sections
Glasgow Author(s) Enlighten ID:Miglo, Dr Anton
Authors: Miglo, A.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Publisher:Nova Science Publishers
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