-
Rosendahl, Knut Einar & Lund, Diderik
(2022).
Oljeskattepakken gir kraftig subsidiering fortsatt.
Dagens næringsliv.
ISSN 0803-9372.
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Fæhn, Taran; Hagem, Cathrine; Lund, Diderik & Rosendahl, Knut Einar
(2022).
Fossil utvinning må reduseres.
Dagsavisen.
ISSN 1503-2892.
-
Lund, Diderik & Rosendahl, Knut Einar
(2022).
Grunnrente til folket.
Klassekampen.
ISSN 0805-3839.
-
Lund, Diderik & Rosendahl, Knut Einar
(2021).
Oljeskatteforslaget er et steg i riktig retning.
Dagens næringsliv.
ISSN 0803-9372.
-
Asheim, Geir B.; Fæhn, Taran; Golombek, Rolf; Greaker, Mads; Hagem, Cathrine & Harstad, Bård
[Show all 12 contributors for this article]
(2021).
Norsk olje-politikk kan bidra for klimaet.
Aftenposten (morgenutg. : trykt utg.).
ISSN 0804-3116.
p. 28–29.
-
Greaker, Mads; Hoel, Michael; Lund, Diderik; Rosendahl, Knut Einar & Wulfsberg, Fredrik
(2021).
Også usikre tall må diskonteres.
Dagens næringsliv.
ISSN 0803-9372.
-
Greaker, Mads; Hoel, Michael; Lund, Diderik; Rosendahl, Knut Einar & Wulfsberg, Fredrik
(2021).
Nåverdi selvsagt ikke bare pedagogikk.
Dagens næringsliv.
ISSN 0803-9372.
-
Lund, Diderik & Rosendahl, Knut Einar
(2021).
Mindre norsk petroleum gir lavere utslipp.
Dagens næringsliv.
ISSN 0803-9372.
-
Asheim, Geir Bjarne; Fæhn, Taran; Nyborg, Karine; Greaker, Mads; Hagem, Cathrine & Harstad, Bård Gjul
[Show all 9 contributors for this article]
(2020).
Arguments for a new supply-side climate treaty.
EAERE Magazine.
-
Asheim, Geir Bjarne; Fæhn, Taran; Nyborg, Karine; Greaker, Mads; Harstad, Bård Gjul & Hagem, Cathrine
[Show all 9 contributors for this article]
(2020).
Strengthening the Paris Agreement by supply-side climate policies.
Atlas of Science.
-
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Lund, Diderik & Rosendahl, Knut Einar
(2020).
Skatteforslaget gir subsidiering av olje, uten tvil.
Dagens næringsliv.
ISSN 0803-9372.
-
Lund, Diderik & Rosendahl, Knut Einar
(2020).
Hvorfor skal skatten favorisere olje og gass?
Dagens næringsliv.
ISSN 0803-9372.
-
Lund, Diderik & Rosendahl, Knut Einar
(2020).
Oljeskattforslaget er uansett kraftig subsidiering .
Dagens næringsliv.
ISSN 0803-9372.
-
Lund, Diderik & Rosendahl, Knut Einar
(2020).
Oljenæringen ber om kraftig subsidiering - se regnestykket som viser hvor mye.
Dagens næringsliv.
ISSN 0803-9372.
-
-
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Davis, Graham A & Lund, Diderik
(2018).
Taxation and Investment Decisions in Petroleum.
Show summary
When governments apply high tax rates targeted at natural resource rent, there must be generous deductions in order to avoid investment disincentives. How generous is disputed. Based on standard finance theory and recommendations from the OECD and the IMF, the value of future deductions depends on the risks of these, and the companies’ after-tax weighted-average cost of capital cannot be applied directly. As an example, a simple model quantifies the difference between pre-tax and post-tax systematic risk when tax deductions are less risky than pre-tax cash flows. Osmundsen et al. (2015) suggest that the difference must be ignored by oil companies, since they cannot find the separate market values of tax deductions. But companies operating in different jurisdictions cannot then appreciate differences in tax systems, not even approximately, which will lead to suboptimal decisions. Tax designers may instead assume that companies gradually adopt more adequate methods of investment decision making.
-
Lund, Diderik & Nyborg, Karine
(2017).
Behold petroleumsskatten!
Klassekampen.
ISSN 0805-3839.
-
-
Lund, Diderik
(2016).
Optimal resource rent taxation when nations are credit constrained.
Show summary
The Resource Rent Tax suggested by Garnaut and Clunies Ross (1975) has been influential in resource rich countries and in academic literature. Several authors show that it distorts investments through asymmetric treatment of profits and losses. Neutrality can only be achieved if authorities commit to treating these symmetrically, guaranteeing loss offset through payouts if necessary. Risks are substantial, both in output (technology, geology) and (output and factor)
prices. Many nations will be unable or unwilling to take risks involved in such guarantees. We analyze optimal rent taxation in this situation, maximizing tax revenue subject to a constraint of no loss offset.
-
-
Jortveit, Anne Karin & Lund, Diderik
(2015).
Oljenæring i særstilling. Dybdeintervju.
[Business/trade/industry journal].
Rapport fra Norsk Klimastiftelse.
Show summary
• Oljeselskapenes mulighet til å trekke fra
renteutgifter ved beregningen av særskatt,
er det mest uheldig ved det norske
petroleumsskattesystemet.
• Mener det samme nå som i 2013, at friinntekten
er for generøs.
• Ingen god begrunnelse for ny skattefordel.
• Oljenæringen er i en særstilling på grunn
av høy skatt og lang ledetid.
• Vanskelig å sammenlikne oljenæringen
med fornybarnæringen.
• For klima og miljø er det viktigere å utlyse
færre lisenser enn å endre oljeskattesystemet.
-
Lund, Diderik
(2015).
Optimal resource rent taxation when nations are credit constrained.
Show summary
The Resource Rent Tax suggested by Garnaut and Clunies Ross (1975) has been influential in resource rich countries and in academic literature. Several authors show that it distorts investments through asymmetric treatment of profits and losses. Neutrality can only be achieved if authorities commit to treating these symmetrically, guaranteeing loss offset through payouts if necessary. Risks are substantial, both in output (technology, geology) and (output and factor) prices. Many nations will be unable or unwilling to take risks involved in such guarantees. We analyze optimal rent taxation in this situation, maximizing tax revenue subject to a constraint of no loss offset.
-
Lund, Diderik & Nymoen, Ragnar
(2015).
Comparative statics for real options on oil: What stylized facts to use?
Show summary
An important application in the real options literature has been to investments in the oil sector. Two commonly applied “stylized facts” in such applications are tested
here. One is that the correlation of the returns on oil and the stock market is positive, the other that it is invariant to changes in oil price volatility. Both are rejected in data
for 1993–2008 for crude oil and the S&P 500 stock market index. Based on real options theory, consequences are pointed out. Higher volatility need not imply increased value
and postponed investment.
-
Lund, Diderik & Nymoen, Ragnar
(2014).
Comparative statics for real options on oil: What stylized facts to use?
-
-
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Lund, Diderik
(2013).
How taxes on firms reduce the risk of after-tax cash flows.
Show summary
Most firms use one discount rate applied to expected net after-tax cash flows. The need to adjust for differences in risk, other than leverage, is commonly neglected. There can be substantial effects of taxation on after-tax risk when
there are depreciation deductions. Among the few studies of these effects, even fewer identify all effects correctly. When marginal investment is taxed together with inframarginal, marginal CAPM beta differs from average. The problems identified here imply that currently suggested tax reforms may fail. Tax neutrality results rely on firms correctly discounting for risk, in particular the risk
of tax deductions.
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Lund, Diderik
(2013).
Bedre omtrent riktig enn nøyaktig galt :.
Samfunnsøkonomen.
ISSN 1890-5250.
127(9),
p. 14–18.
Show summary
I Samfunnsøkonomen nr. 8/2013 svarer Osmundsen, Johnsen og Emhjellen (OJE) (2013) på Lund (2013a), som i sin tur var et svar på Osmundsen og Johnsen (2013). Jeg skal her først diskutere hvilke holdepunkter vi har for å finne de relevante kalkulasjonsrentene. Deretter skal jeg drøfte hvordan staten bør forholde seg til oljeselskapenes påstander om at friinntekten må være rausere fordi de har høyere avkastningskrav enn det staten har lagt til grunn.
-
-
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Lund, Diderik
(2013).
How taxes on firms reduce the risk of after-tax cash flows.
-
Lund, Diderik & Nymoen, Ragnar
(2013).
A theoretical and empirical analysis of invariance assumptions in comparative statics for real options on oil.
-
Lund, Diderik
(2013).
How taxes on firms reduce the risk of after-tax cash flows.
Show summary
Most firms make decisions based on one discount rate applied to expected net after tax cash flows. The need to adjust for differences in risk, other than leverage, is most often neglected. One source of risk differences is the tax system. Even for fully equity-financed firms there can be substantial effects of taxation on after-tax risk when there are depreciation deductions. Among the few studies of these effects, even fewer identify all effects correctly. Some claim to characterize the cost of capital, but fail to identify the marginal investment. When this is taxed together with inframarginal investment, marginal beta differs from average. To find asset betas, observed equity betas should not only be unlevered, but also “unaveraged” and “untaxed.” The problems identified here imply that currently suggested tax reforms may fail. Tax neutrality results rely on firms correctly discounting for risk, in particular the risk of tax deductions.
-
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Lund, Diderik
(2012).
Sammensatte finansielle produkter - uforståelige eller nyttige?
Show summary
Etter finanskrisen i 2008 har investorer opplevd store tap på finansielle produkter de trolig ikke forsto. Domstolene tar stilling til om investorene selv eller de som har solgt produktene, er ansvarlige for manglende forståelse og påfølgende tap. Vi skal se på hvordan produktene er sammensatt, hvilken risiko de innebærer, og om de kan være nyttige for noe eller noen. Vi skal også se på den informasjonen som har vært gitt.
-
-
Lund, Diderik
(2011).
Marginal vesus average beta of equity, and the risk of depreciation tax shields.
-
Lund, Diderik
(2011).
Neutrality of a Resource Super Profits Tax.
-
Lund, Diderik
(2010).
Marginal versus average beta of equity, and the risk of depreciation tax shields.
-
Lund, Diderik
(2010).
Samfunnsøkonomiske betraktninger rundt regulering av petroleumsvirksomheten.
-
Lund, Diderik
(2009).
Rent taxation for non-renewable resources.
-
Lund, Diderik
(2009).
Rent taxation for non-renewable resources.
-
Lund, Diderik
(2008).
Rent taxation for nonrenewable resources.
Show summary
The literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods which disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges, and leads to results which cast doubt upon the relevance of studies which neglect uncertainty. There are, however, several ways to analyze uncertainty, regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980's are promising, but still not in widespread use. Some more specific topics covered in this review are optimal risk sharing between companies and governments, time consistency and fiscal stability, the relationship between taxes and discount rates, and transfer pricing.
-
Lund, Diderik
(2008).
An analytical model of required returns to equity under taxation with imperfect loss offset.
-
Lund, Diderik
(2004).
An Analytical Model of Required Returns to Equity under Taxation with Imperfect Loss Offset.
-
Lund, Diderik
(2004).
Depreciation, taxes and the cost of capital.
-
Lund, Diderik
(2003).
Taxation and systematic risk under decreasing returns to scale.
-
Lund, Diderik
(2003).
Valuation, leverage and the cost of capital in the case of depreciabel assets: Revisited.
Show summary
Levy and Arditti (1973) introduced depreciable assets into the Modigliani and Miller (1958) model, and analyzed the implications for the cost of capital. Assuming that the firm reinvests indefinitely to maintain a constant expected cash flow, they found that depreciation increases the cost of capital before and after tax. Most of their assumptions are maintained. However, commitment to perpetual reinvestment is in most cases not a reasonable assumption. Without it, depreciation decreases the cost of capital before and after tax. The effect of depreciation is less in absolute value than in Levy and Arditti, but not insignificant.
-
Lund, Diderik
(2002).
Rent taxation when cost monitoring is imperfect.
Show summary
While rent taxation in some theories is neutral, and the tax rate could be set to one hundred percent to minimize the need for distortionary taxes, this does not occur in practice. An important reason for this is the transfer incentives that would result. When cost transfers can only be imperfectly monitored, it is optimal under some conditions to combine a tax on gross revenue with a rent tax. This contributes to explaining the frequent occurrence of gross revenue taxation in actual rent tax systems, and the frequently observed tailoring of rent tax systems in response to output price changes.
-
Lund, Diderik
(2002).
Petroleum tax reform in Scandinavia.
Show summary
During the past two years similar petroleum tax reforms were proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.
-
Lund, Diderik
(2002).
Petroleum tax reform in Scandinavia.
Show summary
During the past two years similar petroleum tax reforms were proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.
-
Lund, Diderik
(2001).
Petroleum tax reform in Scandinavia.
Show summary
During the past two years similar petroleum tax reforms were proposed in Norway and Denmark. Both were based on results on neutral taxation derived by Boadway and Bruce (1984) and Fane (1987). Main features of the proposals are presented, and important problems of implementation are highlighted. Topics for further research are pointed out. While the risk characteristics of tax deductions caused major disagreements between experts and oil companies, the after-tax cost of capital for risk free cash flows is a less clearly resolved question within the economics literature. Another topic for disagreement is value additivity, disputed by the companies.
-
Lund, Diderik
(2001).
Taxation, uncertainty, and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various corporate tax systems, e.g., abroad or in particular sectors of an economy. The firm's shares are traded in a market which is unaffected by these systems. The cost of capital depends on the tax systems in question, even for fully equity financed projects. This is neglected in much of the literature and practice based on the weighted average cost of capital. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash flow tax, these reduce the cost of equity because they act risk-wise as a loan from the firm to the government. For a given depreciation schedule the cost of equity is a decreasing function of the corporate tax rate. Under some realistic circumstances the result is stronger: The beta of equity is proportional to one minus the tax rate. The results carry over from two-period to multi-period models. They are modified, but not removed, if the tax value of depreciation deductions is risky. This can be modelled using option valuation techniques.
The results are relevant for capital budgeting in firms which face widely different depreciation schedules or corporate tax rates. They are also relevant for discussions of tax reform, and numerically if one wants to apply capital market data in capital budgeting.
Compared with previous studies, the method is improved by solving for the after-tax marginal project. Compared with Levy and Arditti (1973) it is argued that their assumption of a perpetual commitment to reinvestment is unrealistic.
-
Lund, Diderik
(2001).
Taxation, uncertainty, and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various corporate tax systems, e.g., abroad or in particular sectors of an economy. The firm's shares are traded in a market which is unaffected by these systems. The cost of capital depends on the tax systems in question, even for fully equity financed projects. This is neglected in much of the literature and practice based on the weighted average cost of capital. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash flow tax, these reduce the cost of equity because they act risk-wise as a loan from the firm to the government. For a given depreciation schedule the cost of equity is a decreasing function of the corporate tax rate. Under some realistic circumstances the result is stronger: The beta of equity is proportional to one minus the tax rate. The results carry over from two-period to multi-period models. They are modified, but not removed, if the tax value of depreciation deductions is risky. This can be modelled using option valuation techniques.
The results are relevant for capital budgeting in firms which face widely different depreciation schedules or corporate tax rates. They are also relevant for discussions of tax reform, and numerically if one wants to apply capital market data in capital budgeting.
Compared with previous studies, the method is improved by solving for the after-tax marginal project. Compared with Levy and Arditti (1973) it is argued that their assumption of a perpetual commitment to reinvestment is unrealistic.
-
Lund, Diderik
(2001).
Taxation, uncertainty, and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various corporate tax systems, e.g., abroad or in particular sectors of an economy. The firm's shares are traded in a market which is unaffected by these systems. The cost of capital depends on the tax systems in question, even for fully equity financed projects. This is neglected in much of the literature and practice based on the weighted average cost of capital. For a corporate income tax the main factor which reduces the cost of equity is the depreciation deductions. Compared with a neutral cash flow tax, these reduce the cost of equity because they act risk-wise as a loan from the firm to the government. For a given depreciation schedule the cost of equity is a decreasing function of the corporate tax rate. Under some realistic circumstances the result is stronger: The beta of equity is proportional to one minus the tax rate. The results carry over from two-period to multi-period models. They are modified, but not removed, if the tax value of depreciation deductions is risky. This can be modelled using option valuation techniques.
The results are relevant for capital budgeting in firms which face widely different depreciation schedules or corporate tax rates. They are also relevant for discussions of tax reform, and numerically if one wants to apply capital market data in capital budgeting.
Compared with previous studies, the method is improved by solving for the after-tax marginal project. Compared with Levy and Arditti (1973) it is argued that their assumption of a perpetual commitment to reinvestment is unrealistic.
-
Lund, Diderik
(2001).
Taxation, uncertainty, and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various foreign
tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost
of capital depends on the foreign tax system, even for fully equity financed projects. This is
neglected in much of the literature. For a corporate income tax the main factor which reduces the
cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the
cost of equity because it acts as a loan from the firm to the government.
-
Lund, Diderik
(2001).
Taxation, uncertainty, and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various foreign
tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost
of capital depends on the foreign tax system, even for fully equity financed projects. This is
neglected in much of the literature. For a corporate income tax the main factor which reduces the
cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the
cost of equity because it acts as a loan from the firm to the government.
-
Lund, Diderik
(2001).
Taxation, uncertainty and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various foreign
tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost
of capital depends on the foreign tax system, even for fully equity financed projects. This is
neglected in much of the literature. For a corporate income tax the main factor which reduces the
cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the
cost of equity because it acts as a loan from the firm to the government.
-
Lund, Diderik
(2001).
Taxation, uncertainty, and the cost of equity for a multinational firm.
Show summary
From a CAPM-type model the cost of equity is derived for a firm operating under various foreign
tax systems. The firm´s shares are traded in a market which is unaffected by these systems. The cost
of capital depends on the foreign tax system, even for fully equity financed projects. This is
neglected in much of the literature. For a corporate income tax the main factor which reduces the
cost of equity is the depreciation deductions. Compared to a neutral cash flow tax, this reduces the
cost of equity because it acts as a loan from the firm to the government.
-
Lund, Diderik; Nyborg, Karine & Wærness, Eirik
(2000).
Petroleumsskatten bør endres.
Dagens næringsliv.
ISSN 0803-9372.
p. 3–3.
Show summary
Petroleumsskatteutvalget, oppnevnt 22. oktober 1999, la fram sin utredning om behovet for endringer i petroleumsskattesystemet 20. juni 2000. Utvalget har foreslått endringer i skattesystemet som vil bidra til at selskapene på sokkelen i større grad stimuleres til å handle i tråd med samfunnsøkonomisk lønnsomhet. Siktemålet med utvalgets forslag er å sikre at normalavkastning i virksomheten skal skattlegges tilsvarende som i andre næringer. og at hele den ekstraordinære avkastningen, men bare denne, skattlegges høyere.
Artikkelen går gjennom begrunnelsene for å skattlegge petroleumsvirksomheten med en særskilt høy skatt. De viktigste svakhetene ved det eksisterende systemet blir listet opp, og til slutt blir de viktigste endringsforslagene nevnt.
Utvalgets forslag er, i motsetning til i det gjeldende systemet, nøytralt, uavhengig av nivået på skattesatsen. Det bør derfor være mulig å diskutere selve systemet utvalget foreslår, separat fra spørsmålet om hvor stor del av inntjeningen staten bør inndra. En reduksjon av særskattesatsen vil trolig ha liten effekt på selskapenes evne og vilje til å gjennomføre små, marginale prosjekter. En reduksjon av særskattesatsen vil imidlertid bedre selskapenes lønnsomhet på allerede lønnsomme prosjekter. Det vil dermed særlig tilgodese etablerte selskaper som har de mest lønnsomme feltene, og i særdeleshet de som har eksisterende felt i produksjon.
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Lund, Diderik & Nyborg, Karine
(2000).
Petroleumsskatt - hva nå?
Dagens næringsliv.
ISSN 0803-9372.
p. 3–3.
Show summary
Petroleumsskatteutvalget la fram sin innstilling i juni (NOU 2000:18), og nå foreligger høringsuttalelsene. Som medlemmer av utvalget ønsker vi å kommentere noen punkter i uttalelsen fra Oljeindustriens Landsforening, OLF.
Utvalget har pekt på at skjermingen i dag er for gunstig for de selskapene som er i skatteposisjon. I dagens særskatt gis det både fradrag for netto renteutgifter og for en "friinntekt," som er uavhengig av finansieringsform. Resultatet er at samlede fradrag overstiger det som skal til for å skjerme normal avkastning. Utvalget foreslår et kapitalavkastningsfradrag til erstatning for rentefradraget og friinntekten. OLF hevder at kapitalavkastningsfradraget er for lavt til å oppnå den ønskede skjermingen. De skriver at det må gis fradrag for en normalavkastning med et ikke ubetydelig risikotillegg. OLF mener tydeligvis at risikotillegget bør være uavhengig av hvilken risiko som faktisk er knyttet til kontantstrømmen. Dette gir liten mening. Det fradraget utvalget foreslår, er tilstrekkelig når en tar i betraktning at selskapene vil nyte godt av fradraget med svært stor grad av sikkerhet.
Et viktig problem med fradraget for faktiske renteutgifter er at selskapene kan utnytte rentefradraget mot 78 prosent skatt til rimelig finansiering av aktivitet andre steder enn i norsk petroleumssektor. Vi finner en slik subsidiering helt urimelig.
-
Lund, Diderik
(2000).
Imperfect loss offset and the after-tax expected rate of return to equity, with an application to rent taxation.
Show summary
Non-neutral taxation, and in particular imperfect loss offset, is shown to have a strong effect not only on investment decisions, but also on required expected after-tax rates of return to equity. Systematic risk is valued according to the CAPM, while non-linear taxes are valued by option valuation methods.
-
Lund, Diderik
(1998).
Kontantstøtte - en økonomisk analyse.
Dagens næringsliv.
ISSN 0803-9372.
-
Halvorsen, Kristin; Helgesen, Vidar; Arnstad, Ada Johanna; Bjørlo, Alfred; Bjørnland, Hilde C & Gjørv, Alexandra Bech
[Show all 15 contributors for this article]
(2020).
Raskere klimaomstilling. Redusert risiko. Ny politikk for Norge i en verden som når Parismålene. Rapport fra klimaomstillingsutvalget.
.
Klimaomstillingsutvalget.
-
Lund, Diderik
(2018).
Increasing resource rent taxation when the corporate income tax is reduced?
Universitetet i Oslo.
Show summary
Under international tax competition, corporate income tax rates are predicted to decrease, and the tax burden will shift onto immobile factors. This case study considers tax changes that illustrate the predictions for Norway 2012–2018. Petroleum rent was taxed at high rates in 2012, and while corporate income tax rates were reduced in four steps, the marginal tax on rent was kept constant. The four steps are analyzed in light of the tax burden shift predicted by theory, and possible intentions of the government. The tax on petroleum rent has not been increased. Government intentions seem to have been shifting.
-
Lund, Diderik
(2003).
Taxation and systematic risk under decreasing returns to scale.
Copenhagen Business School, Department of Economics.
2003(2).
Show summary
Lund (2002a) showed in a CAPM-type model how tax depreciation schedules
affect required expected returns after taxes. Even without leverage higher tax rates
implied lower betas when tax deductions were risk free. Here they are risky, and
marginal investment is taxed together with inframarginal in an analytical model
of decreasing returns. With imperfect loss offset tax claims are analogous to call
options. The beta of equity is still decreasing in the tax rate, but increasing in the
underlying volatility. The results are important if market data are used to infer
required expected returns, and in discussions of tax design.
-
Lund, Diderik
(2003).
Valuation, leverage and the cost of capital in the case of depreciable assets: Revisited.
Copenhagen Business School, Department of Economics.
2003(3).
Show summary
Levy and Arditti (1973) introduced depreciable assets into the Modigliani and
Miller (1958) model, and analyzed the implications for the cost of capital. Assuming
that the firm reinvests indefinitely to maintain a constant expected cash flow, they
found that depreciation increases the cost of capital before and after tax. Most of
their assumptions are maintained. However, commitment to perpetual reinvestment
is in most cases not a reasonable assumption. Without it, depreciation decreases the
cost of capital before and after tax. The effect of depreciation is less in absolute value
than in Levy and Arditti, but not insignificant.
-
Lund, Diderik
(2003).
How to analyze the investment-uncertainty relationship in real option models.
University of Copenhagen, Institute of Economics, Economic Policy Research Unit.
ISSN 0908-7745.
03(17).
Show summary
The real options tradition originally predicted a decreasing relationship between
uncertainty and investment, through the positive effect of higher uncertainty on the
trigger level for revenue relative to costs. An opposing effect on the probability of
reaching the level has been identified, yielding a total effect with ambiguous sign. This
paper makes three points. The �opposing� effect is not always opposing. Systematic
risk cannot generally be assumed to increase with volatility. A probability is not the
best measure of investment. The sign of the total effect is again ambiguous. This
ambiguity is illustrated, depending on specification of model and parameters.
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Lund, Diderik
(2000).
Imperfect loss offset and the after-tax expected rate of return to equity, with an application to rent taxation.
Økonomisk institutt, Universitetet i Oslo.
ISSN 0801-1117.
2000(21).
Show summary
Non-neutral taxation, and in particular imperfect loss offset, is shown to have a strong effect not only on investment decisions, but also on required expected after-tax rates of return to equity. Systematic risk is valued according to the CAPM, while non-linear taxes are valued by option valuation methods.
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Lund, Diderik & Nilssen, Tore
(2000).
Cream skimming, dregs skimming, and pooling: On the dynamics of competitive screening.
Department of Economics, University of Oslo, Norway.
ISSN 0801-1117.
Show summary
We discuss the prevalence of pooling equilibria in a two-period model of an insurance market with asymmetric information. We solve the model numerically. In addition to reporting cases where a pooling equilibrium exists, we pay attention to why, in the case of non-existence of a pooling equilibrium, this is so. In addition to the phenomenon of cream skimming emphasized in earlier literature, we here point to the importance of the opposite: dregs skimming, whereby high-risk consumers are profitably detracted from the candidate pooling contract.
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Halvorsen, Hilde E. & Lund, Diderik
(1998).
Rent taxation when cost transfers are possible, but costly.
Sosialøkonomisk institutt, Universitetet i Oslo.
ISSN 82-570-9182-0.
Show summary
While rent taxation in some theories is neutral, and the tax rate could be set to one hundred percent to minimize the need for distortionary taxes, this does not occur in practice. An important reason for this is the transfer incentives that would result. Monitoring to prevent transfer pricing is difficult, in particular on the cost side. For corporations, monitoring implies that both transfer pricing and real transfers will be costly. Assuming a convex cost function for cost transfers, it is shown that the optimal tax system combines a cash flow tax with a royalty, i.e., a tax on gross revenues. It is also shown that the optimal tax rates depend on the output price. This contributes to explaining the frequently observed tailoring of rent tax systems in response to output price changes, in particular in the petroleum sector. These results hold when the corporations are heterogeneous and the government only knows a probability distribution for the two cost parameters. An analogy to the problem analyzed in the present paper, is the problem of a minority shareholder in preventing a majority shareholder to withdraw profits through, e.g., transfer pricing.