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Neutrality Properties of Firm Taxation under Default Risk

Author

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  • Paolo M. Panteghini

    (University of Brescia and CESifo)

Abstract

This note discusses the neutrality conditions of a Firm Tax. In particular, it proves that the neutrality result found by Bond and Devereux (1995) holds under different default conditions.

Suggested Citation

  • Paolo M. Panteghini, 2004. "Neutrality Properties of Firm Taxation under Default Risk," Economics Bulletin, AccessEcon, vol. 8(4), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-04h20003
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    File URL: http://www.accessecon.com/pubs/EB/2004/Volume8/EB-04H20003A.pdf
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    References listed on IDEAS

    as
    1. Boadway, Robin & Bruce, Neil, 1984. "A general proposition on the design of a neutral business tax," Journal of Public Economics, Elsevier, vol. 24(2), pages 231-239, July.
    2. Leland, Hayne E, 1994. "Corporate Debt Value, Bond Covenants, and Optimal Capital Structure," Journal of Finance, American Finance Association, vol. 49(4), pages 1213-1252, September.
    3. Bonds, Stephen R. & Devereux, Michael P., 1995. "On the design of a neutral business tax under uncertainty," Journal of Public Economics, Elsevier, vol. 58(1), pages 57-71, September.
    4. Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
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    Cited by:

    1. Paolo Panteghini, 2009. "The capital structure of multinational companies under tax competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(1), pages 59-81, February.
    2. Panteghini, Paolo M., 2006. "S-based taxation under default risk," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 1923-1937, November.

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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