Document Type
Article
Publication Date
1993
Abstract
This paper uses recent developments in the theory of optimal capital structure to demonstrate how the federal corporate income tax with an interest deduction, but without a corresponding dividend deduction, misallocates capital within the corporate sector by encouraging investment in low-risk, low-growth projects employing tangible assets over high-risk, high-growth projects employing intangible assets.
Keywords
Business Entities, Corporations, Economics, Income Taxation, Taxation-Federal Income
Publication Title
Villanova Law Review
Repository Citation
Knoll, Michael S., "Taxing Prometheus: How the Corporate Interest Deduction Discourages Innovation and Risk-Taking" (1993). All Faculty Scholarship. 1150.
https://scholarship.law.upenn.edu/faculty_scholarship/1150
Included in
Business Administration, Management, and Operations Commons, Business Organizations Law Commons, Corporate Finance Commons, Economic Policy Commons, Economics Commons, Law and Economics Commons, Taxation-Federal Commons, Tax Law Commons
Publication Citation
38 Vill. L. Rev. 1461 (1993).