relation: http://eprints.imtlucca.it/2735/
title: Ownership, Taxes and Default
creator: Nicodano, Giovanna
creator: Regis, Luca
subject: HB Economic Theory
subject: HG Finance
description: This paper determines ownership and leverage of two units facing a tax-  bankruptcy trade-o�. Connected units have higher leverage and lower tax burden,  because of internal support through both bailouts and corporate dividends. Owner-  ship adjusts to additional tax provisions. A hierarchical group with a wholly-owned  subsidiary results from Thin Capitalization rules. The presence of corporate divi-  dend taxes generates horizontal groups, or a Special Purpose Vehicle, or a private  equity fund. Combinations of tax provisions contain tax savings, debt and default  in connected units. No bailout provisions, such as the Volcker rule, succeed in  reducing leverage and default.
publisher: IMT Institute for Advanced Studies Lucca
date: 2015-07
type: Working Paper
type: NonPeerReviewed
format: application/pdf
language: en
rights: cc_by_nc
identifier: http://eprints.imtlucca.it/2735/1/WP_2015_7%20%281%29.pdf
identifier:   Nicodano, Giovanna and Regis, Luca  Ownership, Taxes and Default.  EIC working paper series  #7/2015    IMT Institute for Advanced Studies Lucca    ISSN 2279-6894.    (Submitted)