No Business Taxation Without Model Representation: Adding Corporate Income and Cash Flow Taxes to GIMF
IMF Working Papers, November 17, 2017
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- No Business Taxation Without Model Representation: Adding Corporate Income and Cash Flow Taxes to GIMF
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Bibliographic details
- Authors: Benjamin Carton, Emilio Fernández Corugedo, Benjamin L Hunt
- Published: November 17, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484326015.001
Summary
- The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region, forward-looking, DSGE model developed at the International Monetary Fund for policy analysis and international economic research.
- This paper documents the incorporation of corporate income, cash-flow and destination based cash-flow taxes into the model.
- The analysis considers the transmission mechanism of these taxes and details how financial frictions interact with each of the taxes.
Authors and Publication
- By Benjamin Carton, Emilio Fernández Corugedo, Benjamin L Hunt
- November 17, 2017
- Format: IMF Working Papers
- Pages: 61
- Volume: 2017
- Issue: 259
- Series: Working Paper No. 2017/259
- DOI: https://doi.org/10.5089/9781484326015.001
- Stock No: WPIEA2017259
- ISBN: 9781484326015
- ISSN: 1018-5941
Model extensions documented
- Incorporation of corporate income tax into GIMF.
- Incorporation of cash-flow tax into GIMF.
- Incorporation of destination based cash-flow tax (DBCFT) into GIMF.
- Detailed treatment of how each tax interacts with financial frictions and the financial accelerator mechanisms in the model.
Key analytical themes and transmission mechanisms
- Transmission channels of corporate income taxes, cash-flow taxes, and destination based cash-flow taxes are analyzed within a multi-region, forward-looking DSGE framework.
- Interaction between tax instruments and financial frictions is detailed, highlighting effects on corporate leverage, cost of capital, and return to capital.
- Consideration of tax deductibility, tax liability, and shadow price implications in the model structure.
- Emphasis on macroeconomic interdependence across regions in assessing tax policy effects.
Subjects and keywords (as stated in source)
- Subjects: Anti-money laundering and combating the financing of terrorism (AML/CFT), Cash-flow tax, Corporate income tax, Corporate taxes, Crime, Taxes, Value-added tax
- Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), business taxation, cash flow, cash flow types tax, Cash-flow tax, Corporate income tax, corporate leverage, Corporate taxes, cost of capital, DBCFT relative, Destination-Based Cash Flow Tax, dynamic stochastic general equilibrium models, financial accelerator, Global, macroeconomic interdependence, proceeds, return to capital, shadow price, tax, tax deductibility, tax instrument, tax liability, tax policy, tax result, transfer payments, transmission mechanism, types tax, Value-added tax, WP
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IMF Working Paper — No Business Taxation Without Model Representation: Adding Corporate Income and Cash Flow Taxes to GIMF (Working Paper No. 2017/259), by Benjamin Carton, Emilio Fernández Corugedo, Benjamin L Hunt, November 17, 2017.
Content in this bundle
- wp17259 — Tax on the return to capital