The Economic Effects of the Corporate Income Tax: Changing Revenues and Changing Views

This paper reviews recent empirical research studying the impact of the U.S. corporate income tax on the behavior of firms. Four areas are discussed:(1) The extent to which dividend taxation imposes a "double tax" on corporate source earnings;(2) The historical impact of tax incentives on the incentives to investand the value of corporate equity;(3) The effects of limited loss offset provisions on the incentives to invest in risky assets; and(4) The determinants of corporate leverage.