Publications

Educators

February 2011
Article

Dividend Taxes and International Portfolio Choice

By: Mihir Desai and Dhammika Dharmapala

This paper investigates how dividend taxes influence portfolio choices, using the response to the distinctive treatment of a subset of foreign dividends in the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) of 2003. An open-economy after-tax capital asset... View Details

Keywords: Dividends; Portfolio Choice; Taxes; Tax Treaties; Foreign Portfolio Investment; Taxation; Lawfulness; Economy; Price; Equity; Stocks; Investment Portfolio; Opportunities; Behavior; United States

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2016
Working Paper

Financing Payouts

By: Joan Farre-Mensa, Roni Michaely and Martin Schmalz

We study the extent to which firms rely on the capital markets to fund their payouts. We find that 42% of firms that pay out capital also initiate debt or equity issues in the same year, resulting in 32% of aggregate payouts being externally financed. Most firms with... View Details

Keywords: Payout Policy; Financing Decisions; Debt Issues; Equity Issues; Capital Structure; Decision Making; Financing and Loans; Corporate Finance

31 Jan 2017
News

Border tax 'significant wrench' in tax reform: Expert

November 2020
Article

The Role of Taxes in the Disconnect Between Corporate Performance and Economic Growth

By: Urooj Khan, Suresh Nallareddy and Ethan Rouen

We investigate the relation between the growth in corporate profits and the overall U.S. economy, focusing on the impact of the U.S. corporate tax regime on this relation. We document that the growth of corporate profits, on average, has outpaced the growth of the... View Details

Keywords: Taxes; Gdp; Corporate Profits; American Jobs Creation Act Of 2004; Taxation; Economic Growth; Profit; United States

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November 2018
Teaching Note

The Tax Man: Taxes in Private Equity Real Estate

By: Nori Gerardo Lietz and Sayiddah Fatima McCree

Teaching Note for HBS No. 218-077. This teaching note provides the back up analysis for the various alternatives to be considered in choosing the optimal investment structure for the real estate acquisition. It contrasts the interests of the tax exempt investors... View Details

Keywords: Real Estate; Alternative Investment Structures; Taxation; Private Equity; Property; Acquisition; Conflict of Interests; Governing Rules, Regulations, and Reforms

March 2016
Article

Trade Credit and Taxes

By: Mihir Desai, C. Fritz Foley and James R. Hines Jr.

This paper analyzes the extent to which firms use trade credit to reallocate capital in response to tax incentives. Tax-induced differences in pretax returns encourage the use of trade credit to reallocate capital from firms facing low tax rates to those facing high... View Details

Keywords: Taxation; Trade; Credit; Capital

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29 Jun 2012
Working Paper Summaries

Trade Credit and Taxes

Keywords: by Mihir A. Desai, C. Fritz Foley & James R. Hines

2017
Working Paper

The Role of Taxes in the Disconnect Between Corporate Performance and Economic Growth

By: Urooj Khan, Suresh Nallareddy and Ethan Rouen

We investigate the relation between the growth in corporate profits and the overall U.S. economy, focusing on the impact of the U.S. corporate tax regime on this relation. We document that the growth of corporate profits, on average, has outpaced the growth of the... View Details

Keywords: Taxes; Gdp; Corporate Profits; American Jobs Creation Act Of 2004; Taxation; Economic Growth; Profit; United States

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February 2018 (Revised December 2019)
Case

The Tax Man: Taxes in Private Equity Real Estate

By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah F. McCree

In January 2018, Caelan Langan, an associate at KSW Partners LLC (“KSW”), was asked by Katherine Scott, the partner for whom he worked, to recommend a proposed structure to acquire a prominent office building in San Francisco for their most recent fund. Caelan was... View Details

Keywords: Real Estate; Alternative Investment Structures; Property; Acquisition; Private Equity; Investment; Management; Taxation; Policy

Educators

August 2005
Background Note

Note on International Tax Regimes

By: Mihir A. Desai, Mark Veblen and Kathleen Luchs

Provides a framework for understanding different types of international tax regimes. Examines how alternative tax regimes tax the foreign income of their citizens (including corporate citizens); how tax regimes define foreign and domestic income; and how foreign tax... View Details

Keywords: Motivation and Incentives; Earnings Management; Nationality; Framework; Taxation; Profit; Globalization; Credit; United States

Educators

2025
Working Paper

Fiscal Externalities of Transaction Taxes: Evidence from the Los Angeles Mansion Tax

By: Daniel Green, Vikram Jambulapati, Jack Liebersohn and Tejaswi Velayudhan

We estimate the fiscal externalities of a property transfer tax, the Los Angeles “Mansion Tax”, on the revenues from property taxes when assessed values are closely tied to transactions. In California, as in over half of U.S. states, growth in tax as- sessments... View Details

Keywords: Public Finance; Taxation; Real Estate; Property Demand

16 Apr 2018
News

Tax Reform, Round One

2008
Working Paper

Investable Tax Credits: The Case of the Low Income Housing Tax Credit

By: Mihir A. Desai, Dhammika Dharmapala and Monica Singhal

The Low Income Housing Tax Credit (LIHTC) represents a novel tax expenditure program that employs "investable" tax credits to spur production of low-income rental housing. While it has grown into the largest source of new affordable housing in the U.S. and its... View Details

Keywords: Investment; Governing Rules, Regulations, and Reforms; Taxation; Housing; Renting or Rental; United States

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18 Feb 2014
News

A Better Path to Corporate Tax Reform

1994
Chapter

International Experiences with Securities Transaction Taxes

By: K. A. Froot and J. Campbell

Keywords: Corporation Taxation; Interest Deductibility; Cost Of Capital; Corporate Finance; Accounting; Borrowing and Debt; Financing and Loans; Interest Rates

30 Apr 2007
Research & Ideas

All Eyes on Slovakia’s Flat Tax

least. –Laura Alfaro Jensen: Slovakia previously had a tax system that wasn't particularly supportive of the business environment: It was complicated and distortive, consisted of several rates, and included numerous exemptions and... View Details

Keywords: by Martha Lagace

2012
Working Paper

Payout Taxes and the Allocation of Investment

When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor... View Details

Keywords: Business Earnings; Equity; Financing and Loans; Investment; Taxation; Business and Shareholder Relations; Motivation and Incentives