Traditional models of capital budgeting including taxes are based on deterministic tax rates and tax bases. In reality … uncertainty, because investors use simplified models for computing an investment project's tax base and anticipate the actual tax … effects of tax base and tax rate uncertainty, the investment's tax payment is modelled as a stochastic process that may be …

that anticipate the actual tax base incorrectly. I analyze the effects of stochastic taxation on investment behavior in a … the effects of both tax base and tax rate uncertainty, the investment's tax payment is modelled as a stochastic process …. Increased tax uncertainty has an ambiguous impact on investment timing. The view that tax uncertainty depresses real investment …