TAX INCENTIVES

Tax Competition, Foreign Direct Investments and Growth: Using the Tax System to Promote Developing Countries

I. INTRODUCTION AND BACKGROUND INFORMATION The world population is approximately six billion people. 1.2 billion, or one-fifth, are rich while 4.8 billion, or four-fifths, are poor.[1]  The world is more unequal today than at any time in world history. (2)  Only 240 years ago, at the beginning of the industrial revolution, most everybody was poor. Author Lant Pritchett explains that very poor nations today are just...

Moonshine to Motorfuel: Tax Incentives For Fuel Ethanol

Written by Roberta F. Mann and Mona L. Hymel ABSTRACT Biofuels have been embraced by supporters from President George W. Bush to the Natural Resources Defense Council. Before 1930, the U.S. Treasury focused on shutting down small alcohol producers. After 1978, U.S. energy policy sought to encourage ethanol production to reduce dependence on foreign oil. Federal and state incentives have been credited with increasing...

Getting Into the Act: Enticing the Consumer to Become Green Through Tax Incentives

Written by: Roberta F. Mann and Mona L. Hymel Editors’ Summary: Surveys show that the public will choose green alternatives if given the chance, yet average consumers are not making environmentally friendly choices in their everyday lives. In this Article, Profs. Roberta Mann and Mona Hymel examine this conundrum in the context of energy use and argue that well-designed tax incentives can encourage green behavior....

Do Firms Hedge in Response to Tax Incentives?

JOHN R. GRAHAM DANIEL A. ROGERS* ABSTRACT There are two tax incentives for corporations to hedge: To increase debt capacity and interest tax deductions, and to reduce expected tax liability if the tax function is convex. We test whether these incentives affect the extent of corporate hedging with derivatives. Using an explicit measure of tax function convexity, we find no evidence that firms hedge in response...

The Taxation of Retirement Saving: Choosing Between Front-Loaded and Back-Loaded Options

Leonard E. Burman William G. Gale David Weiner ABSTRACT We examine retirement savers' choices between front- and back-loaded tax incentives, such as traditional and Roth IRAs, respectively. With equal dollar contribution limits, back­ loaded plans shelter more funds than front-loaded plans. This implies that Roth IRAs can be the preferred choice even for investors who expect their tax rates to fall in retirement....

Why Tax Incentives may be an ineffective tool to encouraging Investment? The role of Investment Climate

Stefan Van Parys,* Sebastian James Abstract: In this paper we first analyze theoretically how the investment climate affects the impact of the corporate tax rate on investment. We do so in a model where the tax revenues are used to improve the investment climate. We find that if the investment climate is very effective at enhancing the productivity of capital, capital can react positively to a rise...

The United States’ Experience with Energy-Based Tax Incentives: The Evidence Supporting Tax Incentives for Renewable Energy

Developing sustainable markets for renewable energy technologies presents complex challenges. Financial, institutional and informational obstacles impede advancement of these technologies. Tax incentives are often utilized to assist policy makers in dealing with these challenges.[1] Because tax incentives and subsidies generally decrease governmental revenues, understanding their costs and benefits is critical in determining...
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