EFFECTS OF TAX INTEGRATION AND CAPITAL GAINS TAX ON CORPORATE LEVERAGE

Craig T. Schulman · Deborah W. Thomas · Keith Sellers · Duane B. Kennedy

52 citations0/0 files storedNational Tax Journal

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Taxation and Avoidance Corporate Finance and Governance Taxation and Legal Issues

Abstract

This study investigates whether the adoption of integration in New Zealand and Canada had a significant impact on corporate financing decisions in those countries. Because Canada instituted a capital gains tax on the sale of stock concurrent with the adoption of integration, firms within the Canadian samples believed to be affected by one of these tax changes and not the other are identified. Using regression analysis, we substantiate that tax integration significantly reduced corporate debt-to-equity ratios in New Zealand and Canada, supporting theoretical arguments that the imputation credit method of integration can reduce corporate financial leverage. However, this favorable impact is very sensitive to changes in tax rates, particularly taxes on gains realized through stock appreciation.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 52 citations exist upstream.

References

1984Corporate financing and investment decisions when firms have information that investors do not have 1986Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers 1977Determinants of corporate borrowing 1988The Determinants of Capital Structure Choice 1980Optimal capital structure under corporate and personal taxation 1993The journal of financial economics 1984On the Existence of an Optimal Capital Structure: Theory and Evidence 1989Dynamic Capital Structure Choice: Theory and Tests

Cited by

2007System dynamics modelling of firm value 2001Strategies and dividend imputation: the effect of foreign and domestic ownership on average effective tax rates 2012Capital Structure and Firm Performance in the Financial Sector: Evidence from Australia 1983The Canadian Tax Reform and Its Effect on Stock Prices: A Note 2022Do Determinants Influence the Capital Structure Decision in Bangladesh? A Panel Data Analysis

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.