Taxes Depress Corporate Borrowing: Evidence from Private Firms

• 成果类型: Article
• 署名作者: Ivanov, Ivan T.; Pettit, Luke; Whited, Toni M.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Chicago; George Mason University; University of Michigan System; University of Michigan; National Bureau of Economic Research
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdaf094
• 发表日期: 2026
• 关键词: capital structure; financial constraints; debt; INVESTMENT; state; sensitivity; taxation; POLICY; MODEL; cuts

摘要

We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive and spur the use of leverage. Tax cuts also produce more distant default thresholds and lower credit spreads. These effects outweigh the lower interest tax deduction and lead to higher optimal leverage choices, especially for firms with flexible investment policies. The presence of the interest tax deduction raises consumer welfare in equilibrium.