A Tax on Gross Assets of Enterprises as a Form of Presumptive Taxation

22 Pages Posted: 15 Feb 2006

See all articles by Efraim Sadka

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Vito Tanzi

International Monetary Fund (IMF); National Bureau of Economic Research (NBER)

Date Written: February 1992

Abstract

A tax on gross assets has been introduced in some developing countries where several factors (most notably, high inflation) enabled apparently viable enterprises to report losses for income tax purposes. The idea of a tax on the value of assets, rather than on the income that the assets generate, seems to have originated in the 17th century in Milan. It was more recently advocated by Luigi Einaudi and Maurice Allais, but their contributions have remained unknown in the Anglo-Saxon world. The economic implications of such a tax are analyzed in this paper. Special attention is devoted to efficiency and administrative aspects. Practical considerations suggest that the tax on gross assets serves as a minimum income tax rather than as a final tax.

JEL Classification: H20, H21, H25

Suggested Citation

Sadka, Efraim and Tanzi, Vito, A Tax on Gross Assets of Enterprises as a Form of Presumptive Taxation (February 1992). IMF Working Paper No. 92/16. Available at SSRN: https://ssrn.com/abstract=884616

Efraim Sadka (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 9712 (Phone)
+972 3 642 8074 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Vito Tanzi

International Monetary Fund (IMF) ( email )

700 19th Street NW
Tax Policy Division Fiscal Affairs Department
Washington, DC 20431
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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