In this article, we use a stochastic model with a representative firm to study business tax policy under default risk. We will show that, for a given tax rate, tax revenue and welfare are crucially affected by default risk and its costs, as long as interest expenses are deductible. Thus, an evaluation made without accounting for default may be dramatically biased. Moreover, we show that the “debt bias” due to the tax treatment of debt finance causes a quite relevant deadweight loss.

中文翻译：

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违约风险下营业税的福利影响

在本文中，我们使用具有代表公司的随机模型研究违约风险下的营业税政策。我们将证明，对于给定的税率，只要可扣减利息费用，税收和福利就会受到违约风险及其成本的严重影响。因此，在不考虑违约的情况下进行的评估可能会出现严重偏差。此外，我们表明，由于债务融资的税收待遇而导致的“债务偏差”会导致相当相关的无谓损失。