Marginal tax rates under asymmetric taxation

Lutz Kruschwitz and Andreas Löffler

No 191, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: This paper attempts to analytically determine the impact a tax shield (marginal tax rate) has on the value of a levered firm assuming that gains and losses are taxed differently. Previous research has done this by employing empirical methods and simulation studies. We are able to present closed-form solutions for two popular financing policies. Our solutions reveal that the marginal tax rate is a function with an order greater than one.

Date: 2015
New Economics Papers: this item is included in nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:arqudp:191

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