48 0

Corporate income taxes, corporate debt, and household debt

Title
Corporate income taxes, corporate debt, and household debt
Author
이영
Keywords
Corporate income tax rates; Corporate debt; Household debt; Tax competition
Issue Date
2019-06
Publisher
SPRINGER
Citation
INTERNATIONAL TAX AND PUBLIC FINANCE, v. 26, NO 3, Page. 506-535
Abstract
We find that corporate income tax (CIT) rates are significantly positively associated with corporate debt and negatively associated with household debt, using panel data of 28 OECD countries between 1995 and 2015. The found association between CIT and debt comes from small countries where CIT is more exogenous due to tax competition. The tax deductibility of interest payments encourages firms to use more debt when CIT is high. If the total supply of loanable funds is not affected by a lower CIT, a lower CIT leads to a larger fraction of the total private debt incurred by the household sector. The estimated association becomes stronger in regressions with difference-stationary variables. A decrease in the CIT rate can explain around one-fourth of the increase in the average household debt incurred during the last two decades. The paper is the first study to investigate and yield supportive, though weak, evidence of distortion in household indebtedness caused by a CIT cut.
URI
https://link.springer.com/article/10.1007%2Fs10797-018-9513-4https://repository.hanyang.ac.kr/handle/20.500.11754/121787
ISSN
0927-5940; 1573-6970
DOI
10.1007/s10797-018-9513-4
Appears in Collections:
COLLEGE OF ECONOMICS AND FINANCE[S](경제금융대학) > ECONOMICS & FINANCE(경제금융학부) > Articles
Files in This Item:
There are no files associated with this item.
Export
RIS (EndNote)
XLS (Excel)
XML


qrcode

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.

BROWSE