Tax-exempt investors and the asset allocation puzzle
In: Working paper series Center for Economic Studies ; Ifo Institute ; 242
135 Ergebnisse
Sortierung:
In: Working paper series Center for Economic Studies ; Ifo Institute ; 242
In: Canadian Tax Journal/Revue fiscale canadienne, Band 70 (supp.), Heft 2022
SSRN
In: The School of Public Policy Publications, Band 15:7
SSRN
Governments, including Canada's, offer tax benefits to small businesses, such as lower rates, in the belief that these benefits encourage growth, but these attempts can easily have the opposite effect. Small businesses that face steep "tax walls," meaning a sudden and sharp increase in tax rates once they grow past a certain size, are discouraged to grow rather than incur significantly greater tax expenses. Canada's tax wall is steeper than that of any other G7 country or Australia. With a tax wall representing a 27-point increase in taxes after the small- business threshold is reached, it is far higher than even the second-highest walls of 18 points in Germany and the U.S., and drastically higher than the least steep wall, of three points, in Japan. The result is that Canada encourages investors to keep companies small and less efficient. Growing companies will choose to break up into smaller, more inefficient units, before they get too big, or they may simply look to sell out to foreign buyers after reaching a certain size. This hurts Canada's economic growth, economic efficiency and productivity, and it depresses Canadian workers' wages. Further, once considering both corporate and personal income taxes, Canadian small business are taxed more highly on their investments compared to S-corporations in the United States once they grow beyond $13 million in asset size (based on specific assumptions used for modelling). The higher tax in Canada encourages small business owners to migrate or sell out to US companies. The steepness of Canada's tax wall is affected by the jump in corporate tax rates once a business grows larger, but it is most affected by the sharp increase in the personal income taxes paid by the owners of that business. If innovators and inventors are successful in growing a business in Canada, they will face one of the highest personal income tax rates in the world, beginning at a relatively low level of income. The system therefore encourages them to take their business elsewhere. With a few reforms, the government could ensure the small-business tax system actually promotes small-business growth, as intended. Among them are a flat tax on corporate profits for all businesses, regardless of size, but with an annual 100-per-cent write off on capital expenditures. In addition, income averaging for small businesses would put owners, who will have lean earning years and fat earning years, on a more equal footing with salaried taxpayers. Targeted small-business dividend taxes, for owners with a large interest in an active business, and a capital-gains exemption for purchasers of initial public offerings in qualifying small corporations would also help reorient Canada's small-business tax system towards its goal of helping businesses grow. After all, there seems little point in Canada having a small-business tax regime at all, if its effect in reality is to discourage business growth.
BASE
In: The School of Public Policy Publications 12:14, April 2019
SSRN
The analysis contained in this paper focuses on two different forms of regional conflict in a federation: conflict of taste and conflict of claim. These conflicts may support each other but not necessarily – they are independent in concept and have different implications for regional tensions. Conflict of taste arises from differences in political preferences amongst populations arising from institutions, historical context and culture. Conflict of claim arises from one region having greater wealth than others and being expected to share it with others. The latter is particularly problematical when the rich region is small and has little influence in determining transfers as large per capita transfers from a small rich are needed to have any significant impact on large populated poor regions. While, both conflicts lead to regional stress and a possible break-up of a federation, conflict of claim can be divisive since it focuses on sharing the pie rather than creating the pie.
BASE
Jack Mintz, University of Calgary, gibt einen Überblick über die Auswirkungen der US-amerikanischen Steuerreform und zeigt, dass sowohl die Investitionen als auch die Finanzierung von US-amerikanischen und ausländischen Unternehmen davon beeinflusst werden.
BASE
Two different forms of regional conflict occur in a federation: conflict of taste and conflict of claim. These conflicts may support each other but not necessarily – they are independent in concept and have different implications for regional tensions. Conflict of taste arises from differences in political preferences amongst populations arising from institutions, historical context and culture. Conflict of claim arises from one region having greater wealth than others and being expected to share it with others. The latter is particularly problematical when the rich region is small and has little influence in determining transfers as large per capita transfers from a small rich are needed to have any significant impact on large populated poor regions. While, both conflicts lead to regional stress and a possible break-up of a federation, conflict of claim can be divisive since it focuses on sharing the pie rather than creating the pie. The concepts are applied to Canada's federation.
BASE
In: CESifo Working Paper No. 7282
SSRN
Working paper
In: The School of Public Policy Publications, 2014
SSRN
In: University of Calgary – School of Public Policy Communiqué, Band 3, Heft 1
SSRN
In: The School of Public Policy Publications, Band 3, Heft 4
SSRN
In: The School of Public Policy Publications, Band 1, Heft 3
SSRN
In: The School of Public Policy Publications, Band 1, Heft 4
SSRN
In: Canadian public policy: Analyse de politiques, Band 34, Heft 4, S. 519-520
ISSN: 1911-9917