Tax Policy and Investment
In this paper, we summarize recent advances in the study of effects of tax policy on the fixed investment decisions of firms. We attempt to identify consensus where it has been achieved and to highlight important unresolved issues. In addition, we discuss the implications of recent findings for the analysis of policy options, and discuss arguments for and against long-run tax policy that favors business investment spending.
Published: Fiscal Policy: Lessons from Economic Research, Auerbach, Alan, ed., Cambridge: MIT Press, 1997.