This survey outlines various models used to analyze the impact of taxation on the firm's leverage decision. The models incorporate: i) differential taxation of household from a progressive tax system; ii) loss offsetting under the corporate tax; iii) managerial incentive to avoid moral hazard;...

Provinces increasingly target favoured business sectors or activities for special tax treatment. Getting back on track to broad-based tax relief would make Canadians better off, without starving governments for tax revenue.