Taxes, risky investments, and the simultaneous choice of organizational form and financing

Blaufus, Kay; Mantei, Britta

doi:10.1007/s11573-014-0713-9

Cited by 5 publications

(6 citation statements)

References 16 publications

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“…The question is rather whether it is possible to explain these correlations in a scientific manner. Equally little account is taken of Dieter Schneider's view that, in measuring tax effects, lower requirements are made on the truth of assumptions as no policy recommendations are derived from them [6] [11]. The view represented here is that the use of such a measurement theory remains open.…”

Section: Analysis Of Tax Law From a Critical Rationalist Perspectivementioning

confidence: 97%

“…Decision-making effects imply that a decision made after taking taxes into account deviates from the original decision taken without consideration of taxes. A tax effect would, for example, be in evidence if, after considering taxes, a different decision is made regarding an investment, financing, or a choice of legal form than without this consideration [6] [11] [14] [17].…”

Section: Analysis Of Tax Law From a Critical Rationalist Perspectivementioning

confidence: 99%

“…In tax research, numerous investigations into tax effects based on theoretical models are available [9]- [11]. We can also find many empirical studies [9] [12]- [14].…”

Section: An Evolutionary Framework Of Tax Effects On Financial Decisionsmentioning

confidence: 99%

“…However they did not discuss the theoretical integration of these effects. In addition, despite the fact that numerous studies have presented effects of taxation based on investigations of theoretical models [9]- [11] and on empirical studies [9] [12]- [14], an evolutionary tax effects theory has as yet been missing. We will point out that from a critical rationalist view, the evolutionary analysis of tax law needs such a theoretical framework.…”

Section: Introductionmentioning

confidence: 99%

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Evolutionary Analysis of Tax Law: A Methodological Approach

Schmiel¹

2016

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The present paper conceptualizes a methodology of an evolutionary tax law analysis from a critical rationalist perspective. This methodology has the following characteristics: We interpret tax rules as means to achieve tax goals. Means-end-statements have an ethical and an empirical dimension. The ethical dimension implies that tax goals and tax rules and their secondary effects must be compatible with the aims of market economy regulation. The empirical dimension includes the question if tax goals are realizable and if tax rules cause secondary effects. To answer this question, we need evolutionary hypotheses of tax effects. A quasi-nomological hypothesis regarding the evolutionary effects of taxation is as follows: "If taxation changes the rank order of the relevant decision-making options according to the actors' subjectively rational decision criteria, they decide differently if they take taxes into account than they would if they did not". From an evolutionary point of view, freedom of choice and equality before the law are the contributions of a market economy to the common good. In our opinion, equability of taxation is compatible with the market economy goals "freedom of choice" and "equality before the law". Equability of taxation, however, implies in principle decreasing such decision-making effects of taxation which reduce the explicit tax payment burden (in relative terms). These decision-making effects are designated here as tax avoidance decisions. We need the evolutionary tax effects framework mentioned above in order to develop tax rules which decrease such tax effects. By way of contrast, tax rules that induce or accept tax avoidance decisions conflict with equability of taxation. Such rules are sometimes driven by social goals. Thus, we have to analyze such rules from an evolutionary perspective with regard to their justification, feasibility and proportionality.

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Section: Analysis Of Tax Law From a Critical Rationalist Perspectivementioning

confidence: 97%

Section: Analysis Of Tax Law From a Critical Rationalist Perspectivementioning

confidence: 99%

“…In tax research, numerous investigations into tax effects based on theoretical models are available [9]- [11]. We can also find many empirical studies [9] [12]- [14].…”

Section: An Evolutionary Framework Of Tax Effects On Financial Decisionsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Evolutionary Analysis of Tax Law: A Methodological Approach

Schmiel¹

2016

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“…For the purpose of our study we extend a model previously used by Blaufus and Hundsdoerfer (2008) and Blaufus and Mantei (2014) to incorporate leverage-based as well as EBITDA-based IDR. In a baseline model we will assume full loss offset, full deductibility of interest expenses as well as full taxability of default gains and show that this will lead to organizational form neutrality if tax rates for both forms are identical.…”

Section: Introductionmentioning

confidence: 99%

Interest deductibility restrictions and organizational form

Blaufus

Kreinacke

Mantei

2014

Bus Res

Self Cite

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Using a theoretical model for risky investment decisions, we study the effect of interest deductibility restrictions on the choice of organizational form. We analyze the two most widely used approaches: first, rules that limit the interest deductibility if the firm’s leverage exceeds a specific level, and second, rules that restrict the interest deduction if the interest expenses exceed a specific percentage of the firm’s earnings. Although these restrictions apply uniformly for partnerships and corporations in many countries, we find that they usually distort the choice of organizational form. We demonstrate that only leverage-based interest deductibility restrictions can in theory be modified to achieve organizational form neutrality. However, this requires a legal form dependent application or absence of dividend taxation and in any case a full loss offset which is in contrast to current law in many countries. If one considers corporate loss offset limitations, both types of interest deductibility restrictions always distort the choice of organizational form. Thus, the introduction of interest deductibility restrictions is actually in conflict with the legislators’ often declared aim to design tax systems that are neutral with respect to the choice of organizational form.

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Is analytical tax research alive and kicking? Insights from 2000 until 2022

Niemann

Sailer

2023

J Bus Econ

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This literature review evaluates the development and impact of analytical tax research (ATR) from 2000 until 2022. Based on 345 research papers, we (1) identify emerging and declining research topics in the area of ATR, (2) examine the trends in publication outlets and author teams, and (3) analyze citation metrics at both the level of articles and authors to measure perception and impact of ATR. First, we find that rather new topics, such as the impact of taxation on entrepreneurship, innovation and R&D, have begun to attract attention. Second, tax journals are not the preferred outlet for ATR and author teams exhibit a decreasing gender imbalance. Third, citation metrics are highly centered on specific publications and individual authors. Moreover, publications that appeared in economics and finance journals generate disproportionately large citation numbers compared to those that were published in tax, accounting and business research journals. Authors from Anglo-American institutions have significantly more citations than researchers from German-speaking countries. We find that ATR does not form a closed community. It unites researchers from different backgrounds based on their— sometimes nonrecurring—thematic interest in the effects of taxation on economic decisions.

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Taxes, risky investments, and the simultaneous choice of organizational form and financing

Cited by 5 publications

References 16 publications

Evolutionary Analysis of Tax Law: A Methodological Approach

Evolutionary Analysis of Tax Law: A Methodological Approach

Interest deductibility restrictions and organizational form

Is analytical tax research alive and kicking? Insights from 2000 until 2022

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