Can corporate taxation be explained by limited liability?

Miglo, A ORCID: 2010, 'Can corporate taxation be explained by limited liability?' , in: Taxation, tax policies and income taxes , Monetary, fiscal and trade policies , Nova Science, pp. 201-205.

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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 Section
Editors: Berube, WJ and Pinto, CN
Schools: Schools > Salford Business School
Journal or Publication Title: Taxation, Tax Policies and Income Taxes
Publisher: Nova Science
Series Name: Monetary, fiscal and trade policies
ISBN: 9781607416265 (hardback)
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Depositing User: Dr Anton Miglo
Date Deposited: 25 May 2021 15:32
Last Modified: 04 Nov 2021 14:33

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