INFLATION AND NON-NEUTRALITIES IN THE TAXATION OF CORPORATE SOURCE INCOME
研究了高通胀与未指数化税制相互作用如何增加公司来源收入的税负，并分析其对股票价格和资本存量的影响，特别关注英国1970-80年代的实际数据。
IN the literature on the welfare effects of inflation one view which has developed is that it is not inflation per se that is harmful but rather its interaction with pre-existing institutions which were not designed for an inflationary world. Particular emphasis has been given to the failure to index the tax system. The purpose of the present paper is to examine one such interaction and consider the view that high inflation rates combined with unindexed systems of personal and corporate taxation have imposed substantially higher tax burdens on corporate source income. The general background to this issue is the substantial decline in real share values over much of the 1970's and early 1980's in almost all countries where major stock exchanges exist (the one exception appears to be Japan). In the UK the Financial Times index of industrial ordinary shares (measured as an average of working days) rose by only 66.7% between 1975 and 1981 while the Retail Price Index increased by 118.9% over the same period. Given some link between share prices and investment it is possible to argue that the decline in the real value of equities will have been accompanied by a reduction in the level of the capital stock below that which would otherwise have been attained. This view has been argued most forcefully (for the US) by Feldstein (1980a, 1980b), who suggests that the long-run reduction in the real share value and capital stock of US non-financial corporations as a result of the interaction of inflation and an unindexed tax system over the 1970's is of the order of 20-30%. These conclusions have been challenged by Hendershott (1981), again for the US, who argues that on the basis of tax biases alone real share prices should have increased with the inflation rate in the short run whilst being independent of inflation in the long run. Our concern here is to examine the specific question of how changes in the fully anticipated steady state rate of inflation affect share prices and the corporate capital stock when the tax system is unindexed, and to do so with particular reference to the UK. There are many possible explanations of the decline in real equity values: there may have been a fall in pre-tax profitability; high inflation rates may have made equity a more risky investment; investors may have made valuation errors. In this paper, however, we are