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- Title
Accrual equivalent marginal tax rates for personal financial assets.
- Authors
Glenday, Graham; Davies, James B.
- Abstract
This paper shows that the appropriate approach to calculating accrual equivalent marginal tax rates for non-accrual taxes on personal financial investments is the relative-reduction-in-the-internal-rate-of-return approach, which equates the present values from the after-tax returns from an investment under an accrual and a non-accrual tax. Detailed comparisons are made with alternative approaches proposed by Boadway, Bruce, and Mintz and by King and Fullerton for the capital gains tax. Both find accrual tax rates that equate the present values of accrual and actual tax revenues. Fundamental problems are found with both these alternative approaches.
- Subjects
ACCRUAL basis accounting; TAX rates; PERSONAL finance
- Publication
Canadian Journal of Economics, 1990, Vol 23, Issue 1, p189
- ISSN
0008-4085
- Publication type
Article
- DOI
10.2307/135527