The Impact of Federal Taxes on the Use of Debt by Closely Held Corporations

C. Bryan Cloyd, Stephen T. Limberg and John R. Robinson

National Tax Journal, 1997, vol. 50, issue 2, 261-77

Abstract: Asserts that the income tax encourages the use of debt because of the deductibility of interest expense. Examines this conjecture by analyzing the interest incurred by a large sample if small, closely held corporations. Estimates regression of the level of interest on proxies for expected future tax rates, interactions between the tax rate proxies and nondebt tax shields and other determinants of debt utilization.

Date: 1997
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:50:y:1997:i:2:p:261-77

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