I investigate the effect of different measures of corporate taxes on stock returns. The results support the partisan politics cycle effect on equity returns. A high minus low (Hi-Lo) portfolio sorted by (Total Corporate Taxes/Total Assets) has an annual return of +3.8% during Republican...

We analyze to what extent more generous tax loss offset regulations are associated with a weaker decline and stronger recovery of firm stock prices during economic crises. We argue that an unrestricted loss carryforward and, particularly, an unrestricted loss carryback provides firms with...

We analyze to what extent more generous tax loss offset regulations are associated with a weaker decline and stronger recovery of firm stock prices during economic crises. We argue that an unrestricted loss carryforward and, particularly, an unrestricted loss carryback provides firms with...

In this article, we analyze Auerbach's (1991) proposal of a retrospective capital gains tax, which is equivalent to an accrual tax on an ex-ante basis. Using a continuous-time model with stochastic interest rates, we prove that equivalence holds even if the risk-free asset return is correlated...

This paper examines how the effects of dividend taxation on the cost of new equity funds depend on whether or not shareholders can recover their original equity injections without being subject to the dividend tax. We point out the alternative assumptions in the literature on this, and we...

We investigate the joint hypothesis that a) tax expense contains information about core profitability that is incremental to reported earnings and b) that information is reflected in stock prices with a delay. We find that seasonally-differenced quarterly tax expense, our proxy for tax expense...

The purpose of this study was to test the effects of taxable income and accounting income on stock returns, and to prove whether the information content in the high tax planning firms, lower than low tax planning firms. From the sample of 23 firms with high tax planning categories and 23 firms...

Taxation can be considered central to corporate finance theory, where it contributes to the determination of capital structure, dividend policy and valuation of the firm. However, it plays little role in the developments of market finance theory, financial investment analysis or asset and...

This article explores how local taxing authorities might apply the beneficial ownership concept in an OECD-based tax treaty to dividends paid on equity that is referenced in a cross-border total return equity swap. The article examines the OECD Commentary, relevant case law, recent guidelines...

We document evidence that mutual funds, on average, are averse to investing in tax-avoiding firms, which seems anomalous given mutual fund managers' incentive structure. Our results remain unchanged when we address endogeneity concerns using several methods, including identification through...