'Empire-Building', Underinvestment and Capital Gain Taxation
Journal of Current Issues in Finance, Business and Economics, Vol. 2, No. 4, 2010
Posted: 15 Jan 2010 Last revised: 31 Aug 2010
Date Written: July 10, 2009
Abstract
This note provides an explanation for why tax rates on capital gains are usually lower than ordinary income tax rates based on manager's agency problem related to "empire-building" and the underinvestment problem.
Keywords: capital gains tax, moral hazard, underinvestment, empire-building
JEL Classification: D86, G35, H24, H32, J33
Suggested Citation: Suggested Citation
Miglo, Anton, 'Empire-Building', Underinvestment and Capital Gain Taxation (July 10, 2009). Journal of Current Issues in Finance, Business and Economics, Vol. 2, No. 4, 2010, Available at SSRN: https://ssrn.com/abstract=1536686
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.