Found 3 article(s) for author 'Tax Rates'

Fair, comprehensive tax reform is the right path forward

Fair, comprehensive tax reform is the right path forward. Lawrence Summers, March 28, 2019, Opinion, “Over the last several weeks, we have paid careful attention to tax proposals by Representative Alexandria Ocasio-Cortez of New York, for a 70 percent marginal tax rate on top earners, and by Senator Elizabeth Warren of Massachusetts, for a wealth tax on those worth more than $50 million.Link

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Oil’s Plunge Has Created Opening For Carbon Tax

Oil’s Plunge Has Created Opening For Carbon Tax. Lawrence Summers, January 6, 2015, Opinion. “The case for carbon taxes has long been compelling. With the recent steep fall in oil prices and associated declines in other energy prices, it has become overwhelming. There is room for debate about the size of the tax and about how the proceeds should be deployed. But there should be no doubt that, given the current zero tax rate on carbon, increased taxation would be desirable…” Link

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The Risk Anomaly Tradeoff of Leverage

The Risk Anomaly Tradeoff of Leverage. Malcolm Baker, December 14, 2014, Paper. “The “low risk anomaly” refers to the empirical pattern that apparently high-risk equities do not earn commensurately high returns. In this paper, we consider the possibility that the risk anomaly represents mispricing, not a misspecification of risk, and develop the implications for corporate capital structure. The risk anomaly generates a simple tradeoff model: Starting at zero leverage, the overall cost of capital initially falls as leverage increases equity risk. As debt becomes risky, however, the marginal benefit of increasing equity risk declines. The optimum is reached at lower leverage for firms with high asset risk. Consistent with a risk anomaly tradeoff, firms with low-risk assets choose higher leverage. In addition, leverage is inversely related to systematic risk, holding constant total risk; a large number of firms maintain small or zero leverage despite high marginal tax rates; and many others maintain high leverage despite little tax benefit.Link

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