About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

16 Austl. Tax F. 3 (2001)

handle is hein.journals/austraxrum16 and id is 1 raw text is: The Influence of Income Taxes on the Use of Debt Held by Publicly Listed Australian Corporations* Grant Richardson and Roman Lanis** It has been contended that under a classical tax system, income tax encourages firms to employ debt in their capital structures due to interest expenditure being tax deductible. Moreover, as total deductible expenditure is limited to income in any given year, the value of debt tax shields may be affected by the level of non-debt expenditure that is deductible. Consequently, debt usage may be positively related to corporate tax rates after controlling for non-debt tax shields and non-debt determinants of debt utilization. Our study extends the Australian literature by empirically testing simultaneously, the tax hypothesis and the tax substitution hypothesis for a sample of Australian firms operating under a dividend imputation system. We estimate regression models of the level of interest expense on proxies for expected future tax rates, interactions between the tax rate proxies and non-debt tax shields and other determinants of debt utilization after controlling for the effect of * This study was supported by a research grant fioin the Faculty of Business & Econonmics at Monash University, Clayton, Australia. The authors wish to thank Rob Brown, Graham Peirson, Tim Brailsford, Peter Howard, Richard Vann, an anonymous referee and participants at both the 1999 European Accounting Association Conference in Bordeaux, France and the 1999 Asia-Pacific Finance Association Conference in Melbourne, Australia for their helpful comments in the preparation of this article. ** Grant Richardson is a Senior Lecturer in the Department of Accounting & Finance, and the Department of Business Law & Taxation at Monash University in Clayton Victoria. Roman Lanis is a Lecturer in the Department of Accounting & Finance at The University of Newcastle, Ourimbah NSW

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most