The Taxation of Corporate Gains on Sales of Depreciable Property (Technical Version)
An Economic Analysis

AEI's working paper series

Introduction

The statutory rate on corporate capital gains currently is equal to the statutory tax rate on ordinary corporate income. Although individual capital gains taxes have received an enormous amount of attention, both in the popular media and in the academic literature, corporate capital gains have received very sparse attention. In principle, however, the distortions that arise from corporate capital gain taxation are analogous to those that might arrive from individual capital gains taxation. Corporations might face a higher user cost of capital and they could find that their previous purchases have been "locked in" inthe sense that asset sales are avoided because of their tax consequences.

As a general rule, corporate capital gains taxation has been ignored in the investment literature, and corporate capital gains tax rates have been excluded from studies that have attempted to examine the impact of taxation on firm-level investment. For example, a recent review of the literature in this area by Kevin A. Hassett and R. Glenn Hubbard does not mention a single study that addresses the theoretical or empirical impact of corporate capital gains taxation on firm behavior. . . .

Hassett, Viard: The taxation of corporate gains on sales of depreciation property (technical verison)

Download PDF

 

 

Kevin A. Hassett is a senior fellow and director of economic policy studies and Alan D. Viard is a resident scholar at AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Kevin A.
Hassett

 

Alan D.
Viard

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.