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The Economic Effects of the Corporate Income Tax: Changing Revenues and Changing Views

In: Financing Corporate Capital Formation

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  • 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.
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Suggested Citation

  • Alan J. Auerbach, 1986. "The Economic Effects of the Corporate Income Tax: Changing Revenues and Changing Views," NBER Chapters, in: Financing Corporate Capital Formation, pages 107-122, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:7942
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    References listed on IDEAS

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    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
    2. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    3. 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.
    4. Miller, Merton H, 1977. "Debt and Taxes," Journal of Finance, American Finance Association, vol. 32(2), pages 261-275, May.
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