The Significance of Tax Law Asymmetries: An Empirical Investigation
This study uses tax return data for U.S. nonfinancial corporations for the period 1971-82 to estimate the importance of restrictions on the ability of firms to use tax credits and to obtain refunds for tax losses. Our results suggest that the incidence of such unused tax benefits increased substantially during the early 1980s, though we do not find these increases attributable to increased investment incentives during that period. Using estimates of a three-state (taxable, not taxable, partially taxable) transition probability model, we calculate the effective tax rates on various types of investments undertaken by firms differing with respect to tax status. We confirm previous findings about the marginal tax rate on interest payments, and that it is important to distinguish current tax payments from marginal tax rates in estimating the incentive to invest.
|Date of creation:||Jun 1987|
|Publication status:||published as The Quarterly Journal of Economics, Vol. 105, pp. 63-86, (1990).|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Alan J. Auerbach & James M. Poterba, 1987.
"Why Have Corporate Tax Revenues Declined?,"
NBER Working Papers
2118, National Bureau of Economic Research, Inc.
- DeAngelo, Harry & Masulis, Ronald W., 1980. "Optimal capital structure under corporate and personal taxation," Journal of Financial Economics, Elsevier, vol. 8(1), pages 3-29, March.
- Alan J. Auerbach & David Reishus, 1988.
"The Effects of Taxation on the Merger Decision,"
in: Corporate Takeovers: Causes and Consequences, pages 157-190
National Bureau of Economic Research, Inc.
- Alan J. Auerbach & James M. Poterba, 1986.
"Tax Loss Carryforwards and Corporate Tax Incentives,"
413, Massachusetts Institute of Technology (MIT), Department of Economics.
- Alan J. Auerbach & James M. Poterba, 1987. "Tax Loss Carryforwards and Corporate Tax Incentives," NBER Chapters, in: The Effects of Taxation on Capital Accumulation, pages 305-342 National Bureau of Economic Research, Inc.
- Alan J. Auerbach & James M. Poterba, 1986. "Tax Loss Carryforwards and Corporate Tax Incentives," NBER Working Papers 1863, National Bureau of Economic Research, Inc.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-161, January.
- Alan J. Auerbach, 1986.
"The Dynamic Effects of Tax Law Asymmetries,"
Review of Economic Studies,
Oxford University Press, vol. 53(2), pages 205-225.
- Cordes, Joseph J & Sheffrin, Steven M, 1983. " Estimating the Tax Advantage of Corporate Debt," Journal of Finance, American Finance Association, vol. 38(1), pages 95-105, March.
- Saman Majd & Stewart C. Myers, 1985. "Valuing the Government's Tax Claim on Risky Corporate Assets," NBER Working Papers 1553, National Bureau of Economic Research, Inc.
- Jack M. Mintz, 1985. "An Empirical Estimate of Imperfect Loss Offsetting and Effective Tax Rates," Working Papers 634, Queen's University, Department of Economics.
- Colin Mayer, 1986. "Corporation Tax, Finance and the Cost of Capital," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 93-112.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2279. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.