As Certain as Debt and Taxes: Estimating the Tax Sensitivity of Leverage from Exogenous State Tax Changes

Florian Heider, Alexander Ljungqvist

NBER Working Paper No. 18263
Issued in July 2012

---- Acknowledgements -----

We are grateful to Heitor Almeida, Francesca Cornelli, Peter DeMarzo, Murray Frank, Amit Seru, Phil Strahan, Annette Vissing-Jorgensen, and various seminar audiences for helpful comments. We thank Katerina Deligiannidou, Petar Mihaylovski, Geoffroy Dolphin, and Alexandre Da Cruz for excellent research assistance and Ashwini Agrawal and David Matsa for sharing data constructed from the 2007 Commodity Flow Survey. Ljungqvist gratefully acknowledges the generous hospitality of the European Central Bank while working on this project. The views expressed in this paper do not necessarily reflect those of the ECB or the Eurosystem. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

---- Disclosure of Financial Relationships for Alexander Ljungqvist -----

Ljungqvist gratefully acknowledges the generous hospitality of the European Central Bank while working on this project. The views expressed in this paper do not necessarily reflect those of the ECB or the Eurosystem.

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