UID:
edoccha_9958084560702883
Format:
1 online resource (45 p.)
ISBN:
1-4983-2486-X
,
1-4983-3680-9
,
1-4843-1664-9
Series Statement:
IMF Working Papers
Content:
This paper explores how corporate income tax reform can help Japan increase investment and boost potential growth. Using international and Japan-specific empirical estimates of corporate tax elasticities, investment is predicted to expand by around 0.4 percent for each point of rate reduction. International consensus estimates suggest further that between 10 and 30 percent of the static revenue loss could be recovered in the long run through dynamic scoring, although Japan’s offset may be closer to the lower bound. Compensating fiscal measures are necessary in light of Japan’s tight fiscal constraints. The scope for base broadening in the corporate income tax is found to be limited and some forms of base broadening will undo positive investment effects of a rate cut. Alternative revenue sources include higher consumption and property taxes. A gradual approach toward lowering tax rates mitigates windfall gains and reduces short-run revenue costs. An incremental allowance-for-corporate-equity system could boost investment with limited fiscal costs in the short run.
Note:
Description based upon print version of record.
,
Cover; Abstract; Contents; I. Introduction; II. Japan's Corporate Income Tax Distortions; A. High Statutory Tax Rate(s); Tables; 1. Statutory Corporate Income Tax Rate in Japan, as of April 2014; B. High Effective Tax Rates; Figures; 1. Statutory General Government CIT Rates; 2. Effective Marginal and Average Corporate Tax Rate, 2012; 3. Net Present Value of Depreciation, 2012; C. Significant Debt Bias; D. Arbitrage and Distortion for SMEs; 4. Cost of Capital by Financing Measure, 2012; 5. Tax Burden for Different Types of SMEs; E. Arbitrage and Distortion for Multinationals
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F. Revenue PerformanceIII. Economic Benefits of a Corporate Tax Rate Reduction; A. Aggregate Growth Effects; 6. CIT Revenue in OECD Countries, 2012; B. Effects on Investment; Boxes; 1. CIT, Investment, and Output: A Back-of-the-Envelope Calculation; C. Effects on Productivity and Wages; IV. Fiscal Cost of a Corporate Tax Cut; A. Signs of Laffer Effects?; B. Fiscal Impact Using the Elasticity of Taxable Income; 2. Estimates of the Elasticity of Corporate Taxable Income; C. General Equilibrium Effects; V. CIT Reform Options for Japan; A. Timing; B. Revenue-neutral Reform Away from CIT
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2. Summary of Estimated Effects of Lower CIT Rate by 1 Percent of GDPC. CIT Base Broadening and Rate Reduction; 7. Tax Expenditures in the CIT; 8. Loss Carry Away; 9. Personal Income Tax Rate on Earned Dividends, 2013; D. Allowance for Corporate Equity; VI. Conclusions; References; Appendix; I. Allowance for Corporate Equity
,
English
Additional Edition:
ISBN 1-4983-0009-X
Additional Edition:
ISBN 1-322-11000-X
Language:
English
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