The paper shows that a corporate tax policy which is thought to be neutral may have significant incentive effects. This result is established in a model with tax advantage to debt and expectations about a forthcoming tax reform. Investment spurt effects are established and compared to those of a...

The well-known tax results obtained in the traditional model of investment are re-examined in a model of imperfect corporate governance. The corporation tax, the dividend tax and the capital gains tax have unconventional stock market and real effects which operate through the managerial...

The theoretical work on capital income taxation has focused on conditions under which a tax system preserves investment neutrality. The trouble with such a neutrality view is that it is focused on one margin among others. The economics of start-up firms is, however, fundamentally different from...