The Significance of Tax Law Asymmetries: An Empirical Investigation / Rosanne Altshuler, Alan J. Auerbach.

Format:

Book

Author/Creator:

Altshuler, Rosanne.

Contributor:

National Bureau of Economic Research.

Auerbach, Alan J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2279.

NBER working paper series no. w2279

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Significance of Tax Law Asymmetries

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1987.

Summary:

This study uses tax return data for U.S. nonfinancial corporations for the period 1971-82 to estimate the importance of restrictions on the ability of firms to use tax credits and to obtain refunds for tax losses. Our results suggest that the incidence of such unused tax benefits increased substantially during the early 1980s, though we do not find these increases attributable to increased investment incentives during that period. Using estimates of a three-state (taxable, not taxable, partially taxable) transition probability model, we calculate the effective tax rates on various types of investments undertaken by firms differing with respect to tax status. We confirm previous findings about the marginal tax rate on interest payments, and that it is important to distinguish current tax payments from marginal tax rates in estimating the incentive to invest.

Notes:

Print version record

June 1987.