We estimate the impact of effective profit taxation on the financial leverage ofcorporations on the basis of a pseudo-panel constructed from corporate tax return micro data for theperiod 1998-2001, a period which saw the introduction of a major corporate tax reform in Germany.The financial...

From a tax planner’s point of view, it is often attractive to choose debt over equity finan-cing. As this has led to an increase of debt financing of corporations, many countries haveintroduced thin capitalization rules to secure their tax revenues. We analyze the influenceof section 8a of the...