Taxes Depress Corporate Borrowing: Evidence from Private Firms.
We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive a...
| Publicado en: | Review of Economic Studies Vol. 93; no. 4; pp. 2715 - 2750 |
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| Autores principales: | , , |
| Formato: | Artículo |
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Oxford University Press / USA
Jul2026
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=195161461&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 195161461 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00346527 REM jtl: Review of Economic Studies issn: 00346527 maglogo: N pubinfo: dt: Jul2026 vid: 93 iid: 4 pid: 622 pub: Oxford University Press / USA artinfo: ui: 195161461 10.1093/restud/rdaf094 ppf: 2715 ppct: 35 formats: tig: atl: Taxes Depress Corporate Borrowing: Evidence from Private Firms. aug: au: Ivanov, Ivan T Pettit, Luke Whited, Toni M affil: Federal Reserve Bank of Chicago, USA George Mason University, USA University of Michigan and NBER, USA su: Tax cuts Financial leverage Private companies Corporate taxes Corporate debt financing Capital productivity Credit spread Tax deductions sug: subj: Tax cuts Financial leverage Private companies Corporate taxes Corporate debt financing Capital productivity Credit spread Tax deductions keyword: copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 Corporate leverage inLanguage:en publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/restud/rdaf094 Taxes copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 Corporate leverage inLanguage:en publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/restud/rdaf094 Taxes ab: We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive and spur the use of leverage. Tax cuts also produce more distant default thresholds and lower credit spreads. These effects outweigh the lower interest tax deduction and lead to higher optimal leverage choices, especially for firms with flexible investment policies. The presence of the interest tax deduction raises consumer welfare in equilibrium. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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