The Taxation of Corporate Gains on Sales of Depreciable Property: An Economic Analysis

Kevin A. Hassett, Alan D. Viard
Content Type
Working Paper
American Enterprise Institute for Public Policy Research
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” in the sense that asset sales are avoided because of their tax consequences.
Economics, Government, Industrial Policy, Science and Technology