Data and Code for: "Dynamic Patterns of Loss Use and Effective Tax Rates: Owners of S-Corporations"
Principal Investigator(s): View help for Principal Investigator(s) Lucas Goodman, US Department of the Treasury; Elena Patel, University of Utah; Molly Saunders-Scott, Congressional Budget Office
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
|---|---|---|---|
| codeSTATA | 11/01/2021 11:08:AM | ||
| dataSTATA | 11/01/2021 11:07:AM | ||
| dataSUPP | 11/01/2021 11:08:AM | ||
| fromSAS | 11/01/2021 11:07:AM | ||
| out | 11/01/2021 11:07:AM | ||
| outLOG | 11/01/2021 11:07:AM |
Project Description
Summary:
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In this paper, we study tax loss asymmetry for S corporate owners.
These owners use most losses contemporaneously, reducing the tax asymmetry compared to C corporations. However, these owners face distortions due to the progressive individual tax schedule. The value of this asymmetry is approximately $3.5 billion per year. We find that this asymmetry creates disincentives for risky investment and causes allocative inefficiencies among loss and gains owners. Finally, we simulate the effects of certain provisions of the Tax Cuts and Jobs Act; we estimate that these provisions---especially section 199A---reduces the behavioral distortions of the asymmetry for S corporate owners.
Scope of Project
JEL Classification:
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H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
H25 Business Taxes and Subsidies including sales and value-added (VAT)
H32 Fiscal Policies and Behavior of Economic Agents: Firm
H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
H25 Business Taxes and Subsidies including sales and value-added (VAT)
H32 Fiscal Policies and Behavior of Economic Agents: Firm
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