The Tax Reform Act of 1986 considerably altered the differentials between taxes on corporate and noncorporate capital. Conventional wisdom, relying on various incarnations of the Harberger model, suggests rather small efficiency effects from these changes in corporate tax wedges. But the...

The 1986 Tax Reform Act, while having little effect on the overall effective tax rate on U.S. capital income, did reduce significantly the difference in effective taxation of corporate and noncorporate capital within a number of U.S. industries. The Mutual Production Model developed in Gravelle...

An important deficiency in Harberger's (1962) model of corporate income taxation is its inability to consider both corporate and noncorporate production of the same good. This precludes analysis of within-industry substitution of noncorporate for corporate production in response to the tax. Such...

This year marks the twenty-fifth anniversary of Arnold Harberger's celebrated model of the corporation income tax. While the model has been enormously useful as an analytical device for studying two sector economies, its usefulness for understanding the incidence and excess burden of the...