This study investigates whether managers' personal political orientation helps explain tax avoidance at the firms they manage. Results reveal the intriguing finding that, on average, firms with top executives who lean toward the Republican Party actually engage in less tax avoidance than firms...

Companies are adopting executive compensation recoupment ("clawback") policies to discourage aggressive financial reporting choices. Recent research suggests clawback policies might encourage other, less aggressive, means of meeting earnings expectations. We suggest that reducing income tax...

Building on recent theory, we find strong and robust evidence that external labor market incentives motivate CEOs to adopt more aggressive tax policies in order to improve firm performance and their own labor market value. In addition, we find that the tax aggressiveness-labor market incentives...

We find that managers with military experience pursue less tax avoidance than other managers and pay an estimated $1–$2 million more in corporate taxes per firm-year. These managers also undertake less aggressive tax planning strategies with smaller tax reserves and fewer tax havens. Although...

This paper empirically analyses whether both personal and corporate taxation have an impact on companies' capital structure decisions. We investigate the effect of the difference in taxation of debt and equity financing on capital structures. Our empirical results, based on a comprehensive panel...

For more than 50 years, researchers around the world have been searching for a solution to Blacks famous "dividend-puzzle". However, despite tremendous efforts in different fields of economics, the influence of taxation on the distribution policy of firms has remained elusive and is still...

In this paper, I use difference-in-differences regressions to measure how the debt tax shield affects the capital structure of a company. By comparing the financial leverage of treatment and control companies before and after the introduction of an equity tax shield, I infer the impact of the...

This paper explores the taxation of corporations in the wider context of capital income taxation. The pros and cons of various income-based and cash-flow forms of corporation tax (CT) are discussed. The paper concludes that the dual income tax (DIT), which taxes all capital income at the...

Tax effects on distribution policy have been at the center of debate in the theoretical and empirical literature for over half a century. Theoretically, there are two major schools of thought on the matter. The “traditional view” predicts an influence of taxation on firms' payouts, while the...

When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor investment by firms who can...