John Graham

PRO

D. Richard Mead Jr. Family Professor of Finance, Fuqua School of Business, Duke University, USA

Barriers to Mobility: The Lockout Effect of U.S. Taxation of Worldwide Corporate Profits

Written by: John R. Graham, Michelle Hanlon and Terry Shevlin

I. INTRODUCTION

In a frictionless world, capital would flow freely across countries. Within multinational firms, capital would be allocated across divisions, regardless of the location of those divisions, to maximize marginal product and firm value. In reality, tax laws create barriers to ...

The Effects of the Length of the Tax-loss Carryback Period on Tax Receipts and Corporate Marginal Tax Rates

Written by: John R. Graham and Hyunseob Kim

Abstract

We investigate how the length of the net operating loss carryback period affects corporate liquidity and marginal tax rates. We estimate that extending the carryback period from two to five years, as recently proposed in President Obama’s budget blueprint, would provide $19 ($34) ...

Employee Stock Options, Corporate Taxes and Debt Policy

Written by: John R. Graham, Mark H. Lang and Douglas A. Shackelford

Abstract:

We find that employee stock option deductions lead to large aggregate tax savings for Nasdaq 100 and S&P 100 firms and also affect corporate marginal tax rates. For Nasdaq firms, including the effect of options reduces the estimated median ...

Tax Shelters and Corporate Debt Policy

John R. Graham

Alan L.

Abstract:

We gather a unique sample of 44 tax shelter cases to investigate the magnitude of tax shelter activity and whether participating in a shelter is related to corporate debt policy. The average deduction produced by the shelters in our sample is very large, equaling approximately nine percent ...

Using tax return data to simulate corporate marginal tax rates

John R. Graham

Lillian F. Mills

 

Abstract

We document that simulated corporate marginal tax rates based on financial statement data (Shevlin 1990 and Graham 1996a) are highly correlated with simulated rates based on corporate tax return data. We provide algorithms that can be used to estimate the book or tax simulated rates ...

Do Firms Hedge in Response to Tax Incentives?

JOHN R. GRAHAM

DANIEL A. ROGERS*

ABSTRACT

There are two tax incentives for corporations to hedge: To increase debt capacity and interest tax deductions, and to reduce expected tax liability if the tax function is convex. We test whether these incentives affect the extent of corporate hedging with derivatives. Using an explicit measure ...

Employee Stock Options and Taxes

Courtney Edwards

John R. Graham

Mark H. Lang

Doug Shackelford

Abstract:

In this paper, we investigate the effect of stock options on the tax position of the firm. We argue that option tax deductions can significantly affect a firm’s marginal tax rate and that the effect is masked by current financial reporting rules. We ...

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