The Impact of Financial Constraints on the Relation between Investor-Level Taxes and Capital Structure Decisions

Persistent Link:
http://hdl.handle.net/10150/316892
Title:
The Impact of Financial Constraints on the Relation between Investor-Level Taxes and Capital Structure Decisions
Author:
Lusch, Stephen John
Issue Date:
2014
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
This study addresses the question of whether the relation between investor-level taxes and a firm's capital structure decisions varies predictably with financial constraints. Using the setting of the 2003 reduction in individual tax rates for ordinary income, dividends, and capital gains, this study documents that constrained firms decrease their debt use in response to the 2003 tax cuts, while unconstrained firms increase their debt use over the same period. I find these effects are only evident among firms with relatively high individual ownership, which is the group of firms that theory suggests will react to the tax cuts. This paper contributes to the literature on how investor-level taxes influence firms' financing decisions as well as the literature pertaining to the 2003 Tax Act.
Type:
text; Electronic Dissertation
Keywords:
capital structure; dividend taxes; individual ownership; personal taxes; Accounting; capital gains taxes
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Accounting
Degree Grantor:
University of Arizona
Advisor:
Dhaliwal, Dan S.

Full metadata record

DC FieldValue Language
dc.language.isoen_USen
dc.titleThe Impact of Financial Constraints on the Relation between Investor-Level Taxes and Capital Structure Decisionsen_US
dc.creatorLusch, Stephen Johnen_US
dc.contributor.authorLusch, Stephen Johnen_US
dc.date.issued2014-
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThis study addresses the question of whether the relation between investor-level taxes and a firm's capital structure decisions varies predictably with financial constraints. Using the setting of the 2003 reduction in individual tax rates for ordinary income, dividends, and capital gains, this study documents that constrained firms decrease their debt use in response to the 2003 tax cuts, while unconstrained firms increase their debt use over the same period. I find these effects are only evident among firms with relatively high individual ownership, which is the group of firms that theory suggests will react to the tax cuts. This paper contributes to the literature on how investor-level taxes influence firms' financing decisions as well as the literature pertaining to the 2003 Tax Act.en_US
dc.typetexten
dc.typeElectronic Dissertationen
dc.subjectcapital structureen_US
dc.subjectdividend taxesen_US
dc.subjectindividual ownershipen_US
dc.subjectpersonal taxesen_US
dc.subjectAccountingen_US
dc.subjectcapital gains taxesen_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.disciplineAccountingen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorDhaliwal, Dan S.en_US
dc.contributor.committeememberDhaliwal, Dan S.en_US
dc.contributor.committeememberEldenburg, Leslie G.en_US
dc.contributor.committeememberCook, Kirsten A.en_US
All Items in UA Campus Repository are protected by copyright, with all rights reserved, unless otherwise indicated.