NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Tax Neutrality and the Social Discount Rate: A Suggested Framework

Alan J. Auerbach

NBER Working Paper No. 457 (Also Reprint No. r0311)
Issued in February 1980
NBER Program(s):PE

There is probably no specific problem in tax analysis which has generated as much study and discussion among economists as the question of how to formulate "neutral" tax incentives for investment. Yet no consensus has been reached concerning the proper approach to take when adjusting taxes. Comparing the two fundamental notions of neutrality found in the literature, referred to here as "present value" rules and "internal rate of return" rules, we argue that there is both a single appropriate neutrality criterion (the latter) and a framework which can be used to evaluate the performance of a tax system with respect to this criterion.

download in pdf format
   (180 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0457

Published: Auerbach, Alan J. "Tax Neutrality and the Social Discount Rate: A Suggested Framework." Journal of Public Economics, Vol. 17, No. 3 (April 1982), pp. 355-372. citation courtesy of

Users who downloaded this paper also downloaded* these:
Bradford w0269 Tax Neutrality and the Investment Tax Credit
Hulten and Wykoff Economic Depreciation and the Taxation of Structures in United States Manufacturing Industries: An Empirical Analysis
Rauch and Watson w8708 Entrepreneurship in International Trade
Fullerton and Lyon Tax Neutrality and Intangible Capital
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us