Inside the wild world of corporate tax theory
Great Insight btw
I think this part of discussion needs more explanation: "In a standard optimizing model of the firm, a corporate income tax increases the user cost of capital and therefore reduces the demand for capital".
I think you mixed the New Keynesian Model with the neoclassical one. In the Neoclassical model the supply is vertical and the NK is horizontal
Sorry, I meant the supply curve for capital, as in the neoclassical growth model.
Great Insight btw
I think this part of discussion needs more explanation: "In a standard optimizing model of the firm, a corporate income tax increases the user cost of capital and therefore reduces the demand for capital".
I think you mixed the New Keynesian Model with the neoclassical one. In the Neoclassical model the supply is vertical and the NK is horizontal
Sorry, I meant the supply curve for capital, as in the neoclassical growth model.