{"title":"Deleveraging, Tax and Corporate Policies","authors":"Li Huang, Oliver Zhen Li, Hang Liu, Chenkai Ni","doi":"10.2139/ssrn.3831732","DOIUrl":"https://doi.org/10.2139/ssrn.3831732","url":null,"abstract":"Exploiting a government-initiated deleveraging program, we investigate how marginal corporate tax rate affects corporate policy changes in response to a credit shock. We find that, after the initiation of China’s 2015 deleveraging program, high-tax-rate firms reduce leverage to a less extent compared with low-tax-rate firms. This effect is stronger in non-state-owned firms and firms with less non-debt tax shields. High-tax-rate firms reduce dividend and switch to equity financing to a less extent. Through retaining more debt, high-tax-rate firms cut less investments in fixed assets, R&D and human capital. With this unique deleveraging setting, we reveal important implications of the tax-leverage link for corporate policies.","PeriodicalId":186327,"journal":{"name":"FinPlanRN: Tax Reduction (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128341352","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Captive Insurance Timeline: The Tide Turns for Taxpayers","authors":"F. H. Stewart, Beckett G. Cantley","doi":"10.2139/ssrn.3858878","DOIUrl":"https://doi.org/10.2139/ssrn.3858878","url":null,"abstract":"After several courts held for the IRS in captive insurance cases and denied the deductibility of premium payments, taxpayers started winning. This article discusses how those taxpayer victories validated captive insurance arrangements and showed that a diverse corporate structure could prevent application of the IRS's balance sheet theory.","PeriodicalId":186327,"journal":{"name":"FinPlanRN: Tax Reduction (Topic)","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123881213","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}