A note on corporate taxation, limited liability, and asymmetric information

Miglo, A ORCID: https://orcid.org/0000-0002-9237-5293 2007, 'A note on corporate taxation, limited liability, and asymmetric information' , Journal of Economics, 92 (1) , pp. 11-19.

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Access Information: The Accepted Manuscript of this article is available Open Access at http://www.open-access.bcu.ac.uk/6211/1/NoteJoELimLiab2round9.pdf

Abstract

Becker and Fuest (this issue, p. 1–10) provides a new explanation for the link between limited liability and corporate taxation. The authors argue that a corporate tax on all entrepreneurs with limited liability is optimal when entrepreneurs can offset potential losses and when asymmetric information exists regarding projects’ qualities. This note considers a model with a slightly modified production technology. It confirms that entrepreneurs’ abilities to offset losses and the existence of asymmetric information may affect government policy. However, it also shows that the optimal taxation policy differs from that suggested by Becker and Fuest.

Item Type: Article
Schools: Schools > Salford Business School
Journal or Publication Title: Journal of Economics
Publisher: Springer
ISSN: 0931-8658
Related URLs:
Depositing User: Dr Anton Miglo
Date Deposited: 26 May 2021 08:41
Last Modified: 04 Nov 2021 14:34
URI: http://usir.salford.ac.uk/id/eprint/60389

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