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Neutral Income Tax Systems

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Business Taxation and Financial Decisions

Abstract

In this chapter we introduce the idea of neutrality as a superior objective of tax systems. We illustrate common models of neutral taxation and discuss critically how they are and can be implemented in practice. The models discussed are the cash flow tax, the allowance for corporate equity tax and the Johansson/Samuelson tax. After studying this chapter you will know why neutral taxation is essential from an efficient macroeconomic perspective and from an investor’s perspective. You are able to distinguish different types of neutral tax systems and you are able to evaluate their relevance in practice.

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Author information

Authors and Affiliations

  1. WHU – Otto Beisheim School of Management, Chair of Taxation and Accounting, Burgplatz 2, 56179, Vallendar, Germany

    Prof. Dr. Deborah Schanz

  2. Chair of Business Taxation, University of Magdeburg, Universitätsplatz 2, 39106, Magdeburg, Germany

    Prof. Dr. Sebastian Schanz

Authors
  1. Prof. Dr. Deborah Schanz
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  2. Prof. Dr. Sebastian Schanz
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Correspondence to Deborah Schanz .

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© 2011 Springer-Verlag Berlin Heidelberg

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Schanz, D., Schanz, S. (2011). Neutral Income Tax Systems. In: Business Taxation and Financial Decisions. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-03284-4_5

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