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This paper addresses the question of how firms react to tax incentives in a formula apportionment (FA) tax regime. Under FA, profits of all consolidated entities of a business group are summed and then allocated according to a formula based on FA factors. We hypothesize that firms may change the...
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types of direct subsidies with indirectly subsidized loans. We find that, in a large parameter range, politicians prefer … subsidized loans to direct subsidies, because these avoid windfall gains to entrepreneurs, and they economize on screening costs …. For similar reasons, subsidized loans may increase social welfare relative to subsidies. From a welfare perspective …
Persistent link: https://www.econbiz.de/10008859470
types of direct subsidies with indirectly subsidized loans. We find that, in a large parameter range, politicians prefer … subsidized loans to direct subsidies, because these avoid windfall gains to entrepreneurs, and they economize on screening costs …. For similar reasons, subsidized loans may increase social welfare relative to subsidies. From a welfare perspective …
Persistent link: https://www.econbiz.de/10013158814
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