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Taxation and the User Cost of Capital : An Introduction

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dc.contributor.author Creedy, John
dc.contributor.author Gemmell, Norman
dc.date.accessioned 2015-03-19T01:54:30Z
dc.date.accessioned 2022-07-07T02:24:07Z
dc.date.available 2015-03-19T01:54:30Z
dc.date.available 2022-07-07T02:24:07Z
dc.date.copyright 2015
dc.date.issued 2015
dc.identifier.uri https://ir.wgtn.ac.nz/handle/123456789/19269
dc.description.abstract The aim of this paper is to provide an introduction to the concept of user cost and its determinants. Particular attention is given to the influence of taxation. The concept of user cost relates to the rental, the rate of return to capital, that arises in a profit maximising situation in which further investment in capital produces no additional profit. This paper sets out in some detail the range of assumptions involved in obtaining alternative expressions for the user cost. The user cost refers to a before-tax capital rental, the rate of return that ensures that the (after-tax) cost of capital is equal to the post-tax returns over its life. Hence, associated with the user cost measure is an effective marginal tax rate. This can differ substantially from the statutory marginal rate applicable to the investor. A related effective average tax rate is also defined. en_NZ
dc.format pdf en_NZ
dc.language.iso en_NZ
dc.publisher Te Herenga Waka—Victoria University of Wellington en_NZ
dc.relation.ispartofseries Working Papers in Public Finance ; 04/2015 en_NZ
dc.subject Taxation en_NZ
dc.subject User cost en_NZ
dc.subject Tax rates en_NZ
dc.title Taxation and the User Cost of Capital : An Introduction en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit School of Accounting and Commercial Law en_NZ
vuwschema.subject.anzsrcfor 140215 Public Economics - Taxation and Revenue en_NZ
vuwschema.type.vuw Working or Occasional Paper en_NZ
vuwschema.subject.anzsrcforV2 380115 Public economics - taxation and revenue en_NZ
dc.rights.rightsholder www.victoria.ac.nz/sacl/about/cpf en_NZ


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