The impact of the Ralph Review Tax Reform on corporate capital investment in Australia

Publisher:
Australian Tax Research Foundation
Publication Type:
Journal Article
Citation:
Australian Tax Forum: a journal of taxation policy, law and reform, 2009, 24 (3), pp. 261 - 279
Issue Date:
2009-01
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This study analyzes the impact of tax reform on corporate capital investment in Australia stemming from the Ralph Review of Business Taxation reform. Based on panel data spanning the Ralph Review tax reform, our regression results indicate that corporate capital investment decreased in Australia because of the tax reform. We find that that the negative effects of the removal of accelerated depreciation exceeded the positive effects of the reduction in the corporate tax rate, so there was a decline in corporate capital investment. Our findings are robust to several robustness checks
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