The Theory of Marginal Tax Rates for Alternative Minimum Tax Firms

Buagu G. N. Musazi ； B. Anthony Billings

《Advances in Financial Planning and Forecasting》 5期 (2012/12) Pp. 121-147

https://doi.org/10.6292/AFPF.2012.05.05

並列摘要

Due to the complexity of the alternative minimum tax (AMT), marginal tax rates (MTR) estimation studies deem AMT firms’ MTRs almost impossible to estimate. In this paper, we develop an analytical model for estimating AMT firms’ MTRs based upon the explicit and implicit marginal tax costs of the AMT. Our model shows that AMT firms’ MTRs are essentially the opportunity cost of AMT payments. We re-examine two prior empirical studies in terms of AMT MTRs instead of traditional MTRs, and we found that our result is much better than previous studies. In addition, we also found that the impact of applying AMT MTR in empirical estimates may depend on the proportion and characteristics of AMT firms in the sample.

並列關鍵字

Marginal Tax Rates ； Alternative Minimum Tax ； Net Operating Loss Carryforwards

參考文獻

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(U.S. Internal Revenue Service. (1995). Instructions for Form 4626: Alternative Minimum Tax -- Corporations. Washington DC: Author).

(U.S. Internal Revenue Service. (1996). Instructions for Form 4626: Alternative Minimum Tax -- Corporations. Washington DC: Author).

(U.S. Internal Revenue Service. (1997). Instructions for Form 4626: Alternative Minimum Tax -- Corporations. Washington DC: Author).