Debt Bias (IMF)

Debt bias and other distortions: crisis-related issues in tax policy by Fiscal Affairs Department / IMF. This paper reviews key channels by which tax distortions can significantly affect financial markets, drawing implications for tax design once the crisis has passed. Isaias Coelho, commented, “an important conclusion is that tax systems in general have a tendency pro indebtedness, which may have facilides the financial struture that led to the collapse. This bias is more important in income tax. In Brazil, however, this bias is very moderate.”