Changes in tax policy can affect all aspects of the economy. Not only do firms and individuals change behavior, creating efficiency costs, but government expenditure choices can also change. Unless these expenditure choices had been optimal' previously, changes in response to a tax reform affect...

In this paper, we derive a measure of the efficiency cost of taxing risky capital incomein an infinite horizon stochastic model. The resulting measure differs from all those thathave been proposed in the existing literature. It can be represented by the expression-sigma(s) T(s)c(deltaX(s)),...

This paper examines how corporate taxation of multijurisdictional firms using formula apportionment affects the incentives faced by individual firms and individual states. We find that formula apportionment creates factor price distortions which vary in general among firms within a state, and in...