The Accounting Review Vol. 53 No. 3 1978
Choosing the Form for Business Tax Incentives.
Abstract
Business tax incentives are an integral part of the tax policy of the United States. An important consideration that is often overlooked in designing business tax incentives is the selection of the "form" for the tax incentive. This paper examines the alternative forms of business tax incentives and analyzes their effect on the investment in capital goods. The alternative forms are classified as tax credits, accelerated deductions, additional deductions, exclusions, exemptions, reduced tax rates, and specially taxed organizations. Also, a model useful in comparing the alternative forms is developed. It is concluded that business tax incentives in forms treated as permanent differences by accounting principles have a more favorable effect on the investment in capital goods. Thus, these forms (the reduced tax rate, additional deduction, exclusion, or exemption) are the preferred forms for business tax incentives.
- DOI
- 10.2308/tar-4485714
- Volume
- 53
- Issue
- 3
- Pages
- 708-716
- Language
- en
- Sources
- openalex crossref