The Dynamic Effects of Tax Law Asymmetries

@article{Auerbach1983TheDE,
  title={The Dynamic Effects of Tax Law Asymmetries},
  author={Alan J. Auerbach},
  journal={NBER Working Paper Series},
  year={1983}
}
  • A. Auerbach
  • Published 1 June 1983
  • Economics
  • NBER Working Paper Series
Under current U.S. tax law, a distinction is made between gains and losses by businesses. Losses that must be "carried forward" are subject to two penalties: a loss of interest, and expiration after fifteen years. Previous examinations have focused on the higher expected tax payments such a tax system without "full loss offset" imposes on risky projects.This paper presents a dynamic analysis of the impact of taxation on investment when gains and losses are treated asymmetrically. The results… 
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