NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Taxation and Corporate Financial Policy

J. Gregory Ballentine, Charles E. McLure, Jr.

NBER Working Paper No. 243 (Also Reprint No. r0060)
Issued in May 1980
NBER Program(s):   PE

A model of corporate financial policy (debt-equity ratios and dividend payout rates) is included in the Harberger general equilibrium model of incidence of the corporate income tax. Illustrative calculations of the distortions of financial policy and increases in risk premiums induced by the corporate tax are provided. Because risk premiums on corporate securities would be reduced, eliminating the corporate tax or integrating it into the personal tax would increase the income of non-corporate investors relatively more than that of investors in corporate securities, and is therefore less regressive than is commonly thought.

download in pdf format
   (274 K)

email paper

This paper is available as PDF (274 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Ballentine, J. Gregory and McLure, Jr., Charles E. "Taxation and Corporate Financial Policy." The Quarterly Journal of Economics, Vol. XCIV, No. 2, (March 1980), pp. 351-372.

Users who downloaded this paper also downloaded these:
Auerbach w8203 Taxation and Corporate Financial Policy
Gentry and Hubbard w6433 Fundamental Tax Reform and Corporate Financial Policy
Poterba w10321 Taxation and Corporate Payout Policy
Xepapadeas Environmental Policy and Firm Behavior: Abatement Investment and Location Decisions under Uncertainty and Irreversibility
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us