دانلود رایگان مقاله لاتین نرخ مالیات بر سرمایه گذاری شرکت از سایت الزویر
عنوان فارسی مقاله:
تاثیر میزان نرخ مالیات بر سرمایه گذاری شرکت های بزرگ
عنوان انگلیسی مقاله:
The impact of tax rate changes on intercorporate investment
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مقدمه انگلیسی مقاله:
1. Introduction
This study investigates whether individual- and corporate-level federal income taxes influence the level of investment in the stock market by corporations. Our study is unique in the sense that it simultaneously considers whether the differential tax costs imposed on individual and corporate ordinary income, capital gain income and dividend income incrementally impact firm investment behavior. The impact of taxes on business decisions has been a topic of great interest in the accounting and finance literatures for more than four decades. Branches of this line of inquiry include the impact of taxes on capital structure (e.g., Aier & Moore, 2008; Cloyd, Limberg, & Robinson, 1997; DeAngelo & Masulis, 1980; Dhaliwal, Trezevant, & Wang, 1992; Graham, Lang, & Shackelford, 2004; Lin & Flannery, 2013; MacKie-Mason, 1990; Modigliani & Miller, 1958, 1963), dividend policy (e.g., Bradford, 1981), compensation policy (e.g., Balsam, Halperin, & Mozes, 1997; Balsam & Ryan, 1996; Gordon & Slemrod, 1998; Hite & Long, 1982), and investment. However, to date, studies that investigate the interaction of taxes and corporate investment decisions have focused primarily on investment in fixed assets (e.g., Billings & Hamilton, 2002; Black, Legoria, & Sellers, 2000; Campbell, Chyz, Dhaliwal, & Schwartz, 2013; Cummins, Hassett, & Hubbard, 1996; Edgerton, 2010; Hageman, Bobek, & Luna, 2015; Kaufman & Gitman, 1988; Kern, 1994), in research and development (R&D) (e.g., Black et al., 2000; Finley, Lusch, & Cook, 2015; Waegenaere, Sansing, & Wielhouwer, 2012), or in foreign direct investment (FDI) (e.g., Brandstetter & Jacob, 2013; Drebler, 2012; Waegenaere et al., 2012). We extend this literature by considering another type of corporate investment, marketable equity securities. Understanding the factors that drive corporate investment in marketable equity securities is important because the stock market is a likely investment alternative for free cash flows in periods that lack positive net present value projects (e.g., long-term investments, fixed assets, and/or R&D). Further, intercorporate investment comprises more than 14% of the total value of the three major stock exchanges in the United States (French & Poterba, 1991). We investigate how various individual and corporate statutory marginal tax rates (MTRs) impact intercorporate investment. Specifically, we focus on the highest statutory MTRs applicable to ordinary and capital gain income for corporations and individuals as well as individual dividend income. In each of these cases, existing theory and evidence suggest that a relation between tax rates and intercorporate investment could exist in either direction. As such, predicting the direction of any such association is difficult, and the impact of MTRs on intercorporate investment becomes an empirical question. To illustrate this point in the context of individual capital gains tax rates, prior research provides evidence consistent with the notion that individual-level capital gains taxes have a negative impact on corporate investment in fixed assets and R&D (e.g., Becker, Jacob, & Jacob, 2013; Black et al., 2000; Campbell et al., 2013; Jugurnath, Stewart, & Brooks, 2008; Poterba & Summers, 1983). These findings are generally attributed to the traditional view of taxes and corporate decision making, which argues that firms make economic decisions based on after-tax returns considering both corporate- and individual-level taxes. Specifically, higher (lower) taxes at either the corporate or individual level lower (raise) the overall after-tax rate of return, consequently driving down (up) the level of corporate investment. It is less clear, however, whether and how changes in individual capital gains MTRs will impact a firm's decision to invest in equity securities. On one hand, corporations may decide to reduce or delay expansion-related expenditures when higher individual capital gains taxes reduce the overall after-tax return on investment in fixed assets and research and development. In this instance, a corresponding increase in corporate investment in the stock market would reflect a substitution effect for these corporate funds. Accordingly, we would expect to see a positive association between intercorporate investment levels and changes in individual capital gains MTRs. On the other hand, the traditional view of taxes also suggests that an increase in individual-level capital gains MTRs will reduce the overall after-tax rate of return on intercorporate investment. As such, one might expect a negative association between corporate investment in the stock market and changes in individual capital gains MTRs. Further, individual capital gains tax rates may impact market efficiency by affecting the supply of shares available in the market. Specifically, to the extent that higher capital gains MTRs influence individual investors to hold rather than sell or trade their shares (i.e., the lock-in effect), fewer shares are available for trading. This reduction in market efficiency may act as a disincentive for corporations to participate as investors in the market, also leading to a prediction of a negative association between individual capital gains tax rates and intercorporate investment. Using a sample of 40 annual observations covering the period 1969 to 2008, we examine how changes in the MTRs on ordinary income, dividends, and capital gains for individuals and ordinary income and capital gains for corporations are associated with corporate investment behavior by regressing changes in aggregate corporate investment in marketable securities on changes in these individual and corporate MTRs.1 We find a significant negative association between changes in individual capital gains MTRs and changes in the aggregate level of corporate investment in marketable securities while no such association is evident for changes in either ordinary or dividend MTRs for individuals. These results support the notion that corporations respond to the increase (decrease) in overall after-tax rate of return and/or to the market effi- ciency consequences brought about by a weakening (strengthening) of the lock-in effect once individual capital gains MTRs are lowered (raised). We also find a significantly positive relation between changes in the aggregate level of corporate investment in marketable securities and changes in the corporate MTR on ordinary income and an insignificantly positive association between changes in intercorporate investment and changes the corporate MTR on capital gains. These results are consistent with corporations scaling back expansion plans as MTRs increase and instead investing free cash flows in equity securities. Further, given that the MTRs on corporate ordinary income and capital gains were the same for much of our sample period, the effects for both rates may be reflected in our finding for MTRs on ordinary income. Thus, these results are also consistent with the notion that as the tax price of capital gains for corporations increases, corporations have more incentive to generate capital gains to offset current capital losses and/or unused capital loss carryforwards (i.e., the ability to deduct capital losses becomes more valuable). Our findings are useful to policymakers concerned with behavioral responses to changes in tax policy, particularly in light of our finding that changes in individual tax policy may affect intercorporate investment behavior. This study should also be of interest to academics who seek to understand the impact of individual and corporate level taxes on corporate investment decisions. The remainder of this paper is organized as follows: the next section provides a review of prior literature, and we develop our hypotheses in the third section. The fourth section discusses the methodology and data used to test the association between corporate investment and changes in tax rates. The fifth section presents the results of our analyses while the last section discusses our conclusions and possible limitations
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کلمات کلیدی:
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