Estimating Firm-Level Effective Tax Rates and the User Cost of Capital in New Zealand
AbstractEffective marginal tax rates can be very different from the statutory rate and vary across firms, reflecting such factors as the extent and nature of taxable deductions (losses, depreciation), asset and ownership structures, and debt/equity financing. We estimate firm-specific EMTRs and related user cost of capital (UCC) measures allowing for shareholder-level taxation using data for 2000-2010 from the Longitudinal Business Database. Examining distributions of various UCC measures we find substantial firm-level heterogeneity; systematic changes as a result of tax reforms between 2004 and 2011; and systematic differences between foreignowned and domestically-owned firms. Choices among alternative UCC measures make a difference to interpretations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Victoria University of Wellington, Chair in Public Finance in its series Working Paper Series with number 2854.
Date of creation: 2013
Date of revision:
Contact details of provider:
Postal: School of Accounting & Commercial Law, Victoria University of Wellington, PO Box 600, Wellington, New Zealand
Phone: +64 (4) 463 5775
Fax: +64 (4) 463 5076
Web page: http://www.victoria.ac.nz/sacl/about/chair-in-public-finance
More information through EDIRC
Tax rates; Taxable deductions; Companies;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-CWA-2013-07-20 (Central & Western Asia)
- NEP-PBE-2013-07-20 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Benge, Matt, 1998. "Depreciation Provisions and Investment Incentives under Full Imputation," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 329-45, December.
- Alan J. Auerbach, 1982.
"Taxation, Corporate Financial Policy and the Cost of Capital,"
NBER Working Papers
1026, National Bureau of Economic Research, Inc.
- Auerbach, Alan J, 1983. "Taxation, Corporate Financial Policy and the Cost of Capital," Journal of Economic Literature, American Economic Association, vol. 21(3), pages 905-40, September.
- Schaller, Huntley, 2006. "Estimating the long-run user cost elasticity," Journal of Monetary Economics, Elsevier, vol. 53(4), pages 725-736, May.
- Stephen Bond & Jing Xing, 2010. "Corporate taxation and capital accumulation," Working Papers 1015, Oxford University Centre for Business Taxation.
- Devereux, Michael P & Griffith, Rachel, 2003.
"Evaluating Tax Policy for Location Decisions,"
International Tax and Public Finance,
Springer, vol. 10(2), pages 107-26, March.
- Richard Fabling, 2009. "A Rough Guide to New Zealand's Longitudinal Business Database," Global COE Hi-Stat Discussion Paper Series gd09-103, Institute of Economic Research, Hitotsubashi University.
- Peter Egger & Simon Loretz & Michael Pfaffermayr & Hannes Winner, 2008.
"Firm-specific Forward-looking Effective Tax Rates,"
0811, Oxford University Centre for Business Taxation.
- Alan J. Auerbach, 1980.
"Wealth Maximization and the Cost of Capital,"
NBER Working Papers
0254, National Bureau of Economic Research, Inc.
- Chad Syverson, 2010.
"What Determines Productivity?,"
NBER Working Papers
15712, National Bureau of Economic Research, Inc.
- Michael P Devereux, 2007. "The Impact of Taxation on the Location of Capital, Firms and Profit: a Survey of Empirical Evidence," Working Papers 0702, Oxford University Centre for Business Taxation.
- Fabling, Richard & Sanderson, Lynda, 2013. "Exporting and firm performance: Market entry, investment and expansion," Journal of International Economics, Elsevier, vol. 89(2), pages 422-431.
- Benge, Matt, 1997. "Taxes, Corporate Financial Policy and Investment Decisions in Australia," The Economic Record, The Economic Society of Australia, vol. 73(220), pages 1-15, March.
- Kenneth McKenzie & Jack Mintz & Kimberly Scharf, 1997. "Measuring Effective Tax Rates in the Presence of Multiple Inputs: A Production Based Approach," International Tax and Public Finance, Springer, vol. 4(3), pages 337-359, July.
- Mihir A. Desai & C. Fritz Foley & James R. Hines, Jr., 2003.
"A Multinational Perspective on Capital Structure Choice and Internal Capital Markets,"
NBER Working Papers
9715, National Bureau of Economic Research, Inc.
- Mihir A. Desai & C. Fritz Foley & James R. Hines, 2004. "A Multinational Perspective on Capital Structure Choice and Internal Capital Markets," Journal of Finance, American Finance Association, vol. 59(6), pages 2451-2487, December.
- Simon Gilchrist & Fabio M. Natalucci & Egon Zakrajsek, 2007.
"Investment and the Cost of Capital: New Evidence from the Corporate Bond Market,"
Boston University - Department of Economics - Working Papers Series
WP2007-027, Boston University - Department of Economics.
- Simon Gilchrist & Egon Zakrajsek, 2007. "Investment and the Cost of Capital: New Evidence from the Corporate Bond Market," NBER Working Papers 13174, National Bureau of Economic Research, Inc.
- Kenneth McKenzie & Jack Mintz, 1992. "Tax Effects on the Cost of Capital," NBER Chapters, in: Canada-U.S. Tax Comparisons, pages 189-216 National Bureau of Economic Research, Inc.
- Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition," Economic Policy, CEPR & CES & MSH, vol. 17(35), pages 449-495, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Library Technology Services).
If references are entirely missing, you can add them using this form.