Society and Economy
Volume/Issue:
Volume 35: Issue 3
The destabilizing effect of company income taxation
Author:
Peter Schmid Catholic University Eichstätt-Ingolstadt School of Management Eichstätt-Ingolstadt Germany

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Pages:
365–388
Online Publication Date:
15 Mar 2013
Publication Date:
01 Sep 2013
Article Category:
Research Article
DOI:
https://doi.org/10.1556/socec.2013.0002
Keywords:
company income taxation; tax incidences; DSGE modeling; business cycles; E32; H22; H25
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This paper examines the effects of company income taxation. Therefore, a tax system is implemented in a dynamic, stochastic macroeconomic model with endogenous financial structure. In addition to the long-term level effects that are in line with the deterministic public economics literature, cyclical effects are identified. Besides insurance incidences, company income taxation implies amplifying effects. Depending on the model’s frictions, the latter can dominate and lead to more volatile business cycles.

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Society and Economy
Print ISSN:
1588-9726
Online ISSN:
1588-970X

Editor-in-chief: Balázs SZENT-IVÁNYI

Co-Editors:

  • Péter MARTON (Corvinus University, Budapest)
  • István KÓNYA (Corvinus University, Budapest)
  • László SAJTOS (The University of Auckland)
  • Gábor VIRÁG (University of Toronto)

Associate Editors:

  • Tamás BOKOR (Corvinus University, Budapest)
  • Sándor BOZÓKI (Corvinus University Budapest)
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Society and Economy
Language English
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ISSN 1588-9726 (Print)
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