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Taxes, Inflation and Corporate Financial Policy
Author(s) -
SCHALL LAWRENCE D.
Publication year - 1984
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1984.tb03863.x
Subject(s) - monetary economics , unanimity , economics , corporate tax , inflation (cosmology) , debt , dividend , dividend policy , shareholder , capital structure , dividend tax , capital (architecture) , corporate finance , double taxation , financial system , business , tax reform , macroeconomics , state income tax , finance , corporate governance , tax avoidance , market economy , gross income , physics , theoretical physics , political science , law , history , archaeology
This paper examines inflation‐induced distortions in personal and corporate income taxes and discusses the implications for corporate dividend and financial structure policies and for shareholder unanimity. The tax effects relating to capital gains and debt interest cause changes in aggregate corporate borrowing and lead to equilibrium tax relationships which differ from the zero‐inflation tax relationships.