Capital Structure Neutrality in the Corporate Context
38 Pages Posted: 18 Jul 2000
Date Written: 2000
Under the two-tier Federal income tax system currently in place, a corporation's capital structure affects the amount of tax it and its interest holders jointly pay. This article endeavors to characterize all possible two-tier (income) tax schemes which do not share this problem, i.e., under which a corporation's capital structure does not affect joint tax collections.
JEL Classification: K34
Suggested Citation: Suggested Citation