The Role of Tax Depreciation for Investment Decisions: A Comparison of European Transition Countries
This study compares incentive effects of various tax depreciation methods currently adopted in European transition economies. In these countries straight-line, geometric-degressive and accelerated depreciation measures are quite popular in combination with different corporate tax rates. Their genero...
Saved in:
Published in | IDEAS Working Paper Series from RePEc |
---|---|
Main Authors | , |
Format | Paper |
Language | English |
Published |
St. Louis
Federal Reserve Bank of St. Louis
01.01.2003
|
Subjects | |
Online Access | Get full text |
Cover
Loading…
Abstract | This study compares incentive effects of various tax depreciation methods currently adopted in European transition economies. In these countries straight-line, geometric-degressive and accelerated depreciation measures are quite popular in combination with different corporate tax rates. Their generosity is determined on the basis of Samuelson's true economic depreciation. For this purpose, the present value model is applied under the particular consideration of different financial structures. In this context the traditional Modigliani-Miller theorem for capital structure is revisited. Furthermore, the aspect of inflation is integrated into the model. The central issue is that the historical cost accounting method generally applied for the calculation of the corporate tax base causes fictitious profits in inflationary phases that are also taxed. Therefore, in an inflationary period generous tax depreciation provisions do not promote private investment as designed, but partly compensate such additional tax burdens caused by inflation. |
---|---|
AbstractList | This study compares incentive effects of various tax depreciation methods currently adopted in European transition economies. In these countries straight-line, geometric-degressive and accelerated depreciation measures are quite popular in combination with different corporate tax rates. Their generosity is determined on the basis of Samuelson's true economic depreciation. For this purpose, the present value model is applied under the particular consideration of different financial structures. In this context the traditional Modigliani-Miller theorem for capital structure is revisited. Furthermore, the aspect of inflation is integrated into the model. The central issue is that the historical cost accounting method generally applied for the calculation of the corporate tax base causes fictitious profits in inflationary phases that are also taxed. Therefore, in an inflationary period generous tax depreciation provisions do not promote private investment as designed, but partly compensate such additional tax burdens caused by inflation. |
Author | Radulescu, Doina Maria Chang Woon Nam |
Author_xml | – sequence: 1 fullname: Chang Woon Nam – sequence: 2 givenname: Doina surname: Radulescu middlename: Maria fullname: Radulescu, Doina Maria |
BookMark | eNqNjDsOwjAQRF1Awe8OK1FThJ8IHQpB0CL3kRXWwijZNWsbcXwsxAGoRpp5b8ZqQEw4Ujd9R7hyh8AWtHnDEb1g60x0TGBZ4EIvDLFHinlrXch92MMBKu69ERcyltU6CXs0BFoMBfe1K04UxWGYqqE1XcDZLydqfqp1dV544WfK782Dk1CemmJb7orNuliWq_-oD-o3QqE |
ContentType | Paper |
Copyright | Copyright FEDERAL RESERVE BANK OF ST LOUIS 2003 |
Copyright_xml | – notice: Copyright FEDERAL RESERVE BANK OF ST LOUIS 2003 |
DBID | 3V. 7WY 7WZ 7XB 87Z 8FK 8FL AAFGM ABLUL ABPUF ABSSA ABUWG ACIOU ADZZV AFKRA AGAJT AGSBL AJNOY AQTIP AZQEC BENPR BEZIV BOUDT CBHQV CCPQU DWQXO FRNLG F~G K60 K6~ L.- M0C PIMPY PQBIZ PQBZA PQCXX PQEST PQQKQ PQUKI PRINS Q9U |
DatabaseName | ProQuest Central (Corporate) ABI/INFORM Collection ABI/INFORM Global (PDF only) ProQuest Central (purchase pre-March 2016) ABI/INFORM Collection ProQuest Central (Alumni) (purchase pre-March 2016) ABI/INFORM Collection (Alumni Edition) ProQuest Central Korea - hybrid linking Business Premium Collection - hybrid linking ABI/INFORM Collection (Alumni) - hybrid linking ABI/INFORM Collection - hybrid linking ProQuest Central (Alumni) ABI/INFORM Global - hybrid linking ProQuest Central (Alumni) - hybrid linking ProQuest Central UK/Ireland ProQuest Central Essentials - hybrid linking ABI/INFORM Global (Alumni) - hybrid linking Business Premium Collection (Alumni) - hybrid linking ProQuest Women's & Gender Studies - hybrid linking ProQuest Central Essentials AUTh Library subscriptions: ProQuest Central ProQuest Business Premium Collection ProQuest One Business - hybrid linking ProQuest One Business (Alumni) - hybrid linking ProQuest One Community College ProQuest Central Business Premium Collection (Alumni) ABI/INFORM Global (Corporate) ProQuest Business Collection (Alumni Edition) ProQuest Business Collection ABI/INFORM Professional Advanced ABI/INFORM Global (ProQuest) Access via ProQuest (Open Access) ProQuest One Business ProQuest One Business (Alumni) ProQuest Central - hybrid linking ProQuest One Academic Eastern Edition (DO NOT USE) ProQuest One Academic ProQuest One Academic UKI Edition ProQuest Central China ProQuest Central Basic |
DatabaseTitle | Publicly Available Content Database Business Premium Collection ABI/INFORM Global (Corporate) ProQuest Business Collection (Alumni Edition) ProQuest One Business ABI/INFORM Global ABI/INFORM Global (Alumni Edition) ProQuest Central Basic ProQuest Central Essentials ProQuest One Academic Eastern Edition ProQuest Central (Alumni Edition) ProQuest One Community College ProQuest Business Collection ProQuest Central China ABI/INFORM Complete ProQuest Central ABI/INFORM Professional Advanced ProQuest One Academic UKI Edition ProQuest Central Korea ProQuest One Business (Alumni) ProQuest One Academic ABI/INFORM Complete (Alumni Edition) ProQuest Central (Alumni) Business Premium Collection (Alumni) |
DatabaseTitleList | Publicly Available Content Database |
Database_xml | – sequence: 1 dbid: BENPR name: AUTh Library subscriptions: ProQuest Central url: https://www.proquest.com/central sourceTypes: Aggregation Database |
DeliveryMethod | fulltext_linktorsrc |
ExternalDocumentID | 3752147861 |
Genre | Working Paper/Pre-Print |
GroupedDBID | 3V. 7WY 7XB 8FK 8FL ABUWG AFKRA AZQEC BENPR BEZIV CCPQU DWQXO FRNLG K60 K6~ L.- M0C PIMPY PQBIZ PQBZA PQEST PQQKQ PQUKI PRINS Q9U |
ID | FETCH-proquest_journals_16981541293 |
IEDL.DBID | BENPR |
IngestDate | Thu Oct 10 22:34:09 EDT 2024 |
IsOpenAccess | true |
IsPeerReviewed | false |
IsScholarly | false |
Language | English |
LinkModel | DirectLink |
MergedId | FETCHMERGED-proquest_journals_16981541293 |
OpenAccessLink | https://www.proquest.com/docview/1698154129?pq-origsite=%requestingapplication% |
PQID | 1698154129 |
PQPubID | 2036240 |
ParticipantIDs | proquest_journals_1698154129 |
PublicationCentury | 2000 |
PublicationDate | 20030101 |
PublicationDateYYYYMMDD | 2003-01-01 |
PublicationDate_xml | – month: 01 year: 2003 text: 20030101 day: 01 |
PublicationDecade | 2000 |
PublicationPlace | St. Louis |
PublicationPlace_xml | – name: St. Louis |
PublicationTitle | IDEAS Working Paper Series from RePEc |
PublicationYear | 2003 |
Publisher | Federal Reserve Bank of St. Louis |
Publisher_xml | – name: Federal Reserve Bank of St. Louis |
Score | 2.5691314 |
Snippet | This study compares incentive effects of various tax depreciation methods currently adopted in European transition economies. In these countries straight-line,... |
SourceID | proquest |
SourceType | Aggregation Database |
SubjectTerms | Corporate taxes Tax rates Transition economies |
Title | The Role of Tax Depreciation for Investment Decisions: A Comparison of European Transition Countries |
URI | https://www.proquest.com/docview/1698154129 |
hasFullText | 1 |
inHoldings | 1 |
isFullTextHit | |
isPrint | |
link | http://utb.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwfV1NSwMxEB20e_GmqPhRZUCvwXY3G1MvorWlCJZSKvRWks3sSdzabcGfbybN6kHoOSTki3nJy5s8gFubpkYZR6KUZIVkUY5NlRaZUz0fDgvqaM4dfhur0bt8nefzSLjVUVbZxMQQqF1VMEd-11U97eHew9Pj8kuwaxS_rkYLjX1I0q7kZ9rkeTCeTP8F1oAWw0NIJmZJqyPYo89jcH4lcFp9EFYlzsw3vrD4NE4J-jMjbv-6YJrOl20tb-oHfML-r0cgV214cwzwEpRWyBnl7IhVn8DNcDDrj0TToUXcJPXib0jZKbT8bZ_OADOri7xjbF7cZ7I0Shf8J5elMtekyKlzaO9q6WJ38SUcBDVa4BDa0FqvNnTlUXVtr-PU_QBbPIQP |
link.rule.ids | 786,790,21416,33777,43838 |
linkProvider | ProQuest |
linkToHtml | http://utb.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwfV1NSwMxEB1096A3RcWPqgN6Ddb9iKkX0dqyaruUskJvS7KbPUm3div4882kWT0IPYeEfDEveXmZB3CtgkByWWpWRVqxiEQ5KuCChSXvmXBY6K6gv8PjlCfv0essnjnCrXGyyjYm2kBd1gVx5De3vCcM3Bt4elh8MnKNotdVZ6GxDT6l3BQe-E-DdDL9F1gtWgz3wJ_IhV7uw5aeH0BpVgKn9YfGusJMfuMziU_dlKA5M-I61wXRdKZsbXnT3OMj9n89Aqlqy5ujhRertEL6UU6OWM0hXA0HWT9hbYdyt0ma_G9I4RF45ravjwFDJYq4K1Vc3IVRJbkoKCeX0lUsNNclP4HOppZONxdfwk6SjUf56CV9O4Ndq0yzfEIHvNXyS58bhF2pCzeNP7vYhwU |
openUrl | ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info%3Asid%2Fsummon.serialssolutions.com&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.atitle=The+Role+of+Tax+Depreciation+for+Investment+Decisions%3A+A+Comparison+of+European+Transition+Countries&rft.jtitle=IDEAS+Working+Paper+Series+from+RePEc&rft.au=Chang+Woon+Nam&rft.au=Radulescu%2C+Doina+Maria&rft.date=2003-01-01&rft.pub=Federal+Reserve+Bank+of+St.+Louis&rft.externalDocID=3752147861 |