IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v22y1994i3p311-334.html
   My bibliography  Save this article

Corporate Taxation and the Financial Characteristics of Firms

Author

Listed:
  • George A. Plesko

    (Northeastern University)

Abstract

This article provides estimates of the effects of corporate taxation on the financial characteristics of firms. For a large number of corporations the corporate tax is voluntary, as they have the choice of operating as an S corporation—a pass-through entity similar to a partnership. Given that firms appear to volunteer to pay an additional tax, this article examines the behavior of firms to identify the relationship between their choice to be subject to the corporate tax and tax minimizing strategies. Analyzing firms with positive and negative income separately, the results suggest that the probability a firm has chosen to be taxable increases with firm size and with activity consistent with mitigating both the corporate and individual tax on corpo rate income. In addition, there is strong evidence that the additional administrative burden caused by a lack of conformity between state and federal tax treatment of S corporations provides a significant disincentive to the use of pass-through corporations.

Suggested Citation

  • George A. Plesko, 1994. "Corporate Taxation and the Financial Characteristics of Firms," Public Finance Review, , vol. 22(3), pages 311-334, July.
    • Handle: RePEc:sae:pubfin:v:22:y:1994:i:3:p:311-334
    DOI: 10.1177/109114219402200303
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114219402200303
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114219402200303?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Plesko, George A., 2003. "An evaluation of alternative measures of corporate tax rates," Journal of Accounting and Economics, Elsevier, vol. 35(2), pages 201-226, June.
    2. William F. Fox & LeAnn Luna, 2005. "Do Limited Liability Companies Explain Declining State Corporate Tax Revenues?," Public Finance Review, , vol. 33(6), pages 690-720, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:22:y:1994:i:3:p:311-334. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.