Working Paper: NBER ID: w1519
Authors: Alan J. Auerbach
Abstract: This paper reviews recent empirical research studying the impact of the U.S. corporate income tax on the behavior of firms. Four areas are discussed:(1) The extent to which dividend taxation imposes a "double tax" on corporate source earnings;(2) The historical impact of tax incentives on the incentives to investand the value of corporate equity;(3) The effects of limited loss offset provisions on the incentives to invest in risky assets; and(4) The determinants of corporate leverage.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| corporate income tax (H24) | firm behavior (D21) |
| dividend taxation (G35) | corporate investment returns (G31) |
| investment incentives (O31) | corporate profitability (G30) |
| tax treatment of gains and losses (H24) | firms’ risk-taking behavior (D22) |
| current taxable income (H24) | investment (G31) |
| investment incentives (O31) | present value of tax liabilities (H25) |
| present value of tax liabilities (H25) | firms' decisions to invest in new versus old assets (D25) |
| financing method (G32) | future performance (L25) |