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TAX SCHEDULE CHANGES AND DISCOUNT BOND PRICES
Author(s) -
Rodriguez Ricardo J.
Publication year - 1991
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1991.tb00662.x
Subject(s) - economics , schedule , tax credit , ad valorem tax , tax reform , indirect tax , tax rate , comparative statics , value added tax , tax basis , microeconomics , valuation (finance) , monetary economics , state income tax , econometrics , public economics , gross income , finance , management
Research on the impact of marginal tax changes on bondholder wealth focuses on changes along a given tax schedule. In this paper the valuation consequences of changing the tax schedule are analyzed. Although previous researchers show that the price of all discount bonds falls if the marginal ordinary income tax rate increases along a tax schedule, it is found that this result holds only under specific conditions when the tax schedule changes. Various comparative statics are discussed.