scholarly journals Tax Loss Offset Restrictions and Biased Perception of Risky Investments

2017 ◽  
Author(s):  
Annika Mehrmann ◽  
Caren Sureth-Sloane
Keyword(s):  
Loss Offset Restrictions ◽  
Biased Perception ◽  
Tax Loss ◽  
Loss Offset

The Influence of Tax and Nontax Factors on Banks' Choice of Organizational Form

2003 ◽  
Vol 78 (1) ◽  
pp. 297-325 ◽  
Author(s):  
Leslie Hodder ◽  
Mary Lea McAnally ◽  
Connie D. Weaver
Keyword(s):  
Equity Capital ◽  
Income Taxes ◽  
Regulatory Capital ◽  
Strategic Choices ◽  
Deferred Taxes ◽  
Deferred Tax Assets ◽  
State Income ◽  
Deferred Tax ◽  
Tax Loss ◽  
First Time

This paper identifies tax and nontax factors that influence commercial banks' conversion from taxable C-corporation to nontaxable S-corporation from 1997 to 1999, after a 1996 tax-law change allowed banks to convert to S-corporations for the first time. We find that banks are more likely to convert when conversion saves dividend taxes, avoids alternative minimum taxes, and minimizes state income taxes. Banks are less likely to convert when conversion restricts access to equity capital, nullifies corporate tax loss carryforwards, and creates potential penalty taxes on unrealized gains existing at the conversion date. Banks with significant deferred tax assets are less likely to convert, presumably because the write-off of deferred taxes at conversion decreases regulatory capital and exposes the bank to costly regulatory intervention. We also investigate the strategic choices banks make before converting to S-corporations. Converting banks alter their capital structures, deliberately sell appreciated assets, and strategically set dividends to augment net conversion benefits.

Tax Loss Carrybacks: Investment Stimulus versus Misallocation

2017 ◽  
Vol 93 (4) ◽  
pp. 101-125 ◽  
Author(s):  
Inga Bethmann ◽  
Martin Jacob ◽  
Maximilian A. Müller
Keyword(s):  
Productivity Loss ◽  
Future Prospects ◽  
Competitive Selection ◽  
Aggregate Output ◽  
Tax Regimes ◽  
Investment Response ◽  
Tax Loss ◽  
Loss Firms ◽  
Jel Classifications ◽  
Selection Of

ABSTRACT Tax regimes treat losses and profits asymmetrically when profits are immediately taxed, but losses are not immediately refunded. We find that treating losses less asymmetrically by granting refunds less restrictively increases loss firms' investment: A third of the refund is invested and the rest is held as cash or returned to shareholders. However, the investment response is driven primarily by firms prone to engage in risky overinvestment. Consistent with the risk of misallocation, we find a delayed exit of low-productivity loss firms receiving less restrictive refunds, indicating potential distortion of the competitive selection of firms. This distortion also negatively affects aggregate output and productivity. Our results suggest that stimulating loss firms' investment with refunds unconditional on their future prospects comes at the risk of misallocation. JEL Classifications: G31; H21; H25.

scholarly journals Hidden by bias: how standard psychophysical procedures conceal crucial aspects of peripheral visual appearance

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Fazilet Zeynep Yildirim ◽  
Daniel R. Coates ◽  
Bilge Sayim
Keyword(s):  
Visual Perception ◽  
Line Pair ◽  
Crucial Aspect ◽  
Time And Space ◽  
Contextual Modulation ◽  
Visual Appearance ◽  
Single Time ◽  
Visual Periphery ◽  
Contextual Stimuli ◽  
Biased Perception

AbstractThe perception of a target depends on other stimuli surrounding it in time and space. This contextual modulation is ubiquitous in visual perception, and is usually quantified by measuring performance on sets of highly similar stimuli. Implicit or explicit comparisons among the stimuli may, however, inadvertently bias responses and conceal strong variability of target appearance. Here, we investigated the influence of contextual stimuli on the perception of a repeating pattern (a line triplet), presented in the visual periphery. In the neutral condition, the triplet was presented a single time to capture its minimally biased perception. In the similar and dissimilar conditions, it was presented within stimulus sets composed of lines similar to the triplet, and distinct shapes, respectively. The majority of observers reported perceiving a line pair in the neutral and dissimilar conditions, revealing ‘redundancy masking’, the reduction of the perceived number of repeating items. In the similar condition, by contrast, the number of lines was overestimated. Our results show that the similar context did not reveal redundancy masking which was only observed in the neutral and dissimilar context. We suggest that the influence of contextual stimuli has inadvertently concealed this crucial aspect of peripheral appearance.

The Effect of Tax Reform on the Dairy Farmer

1973 ◽  
Vol 2 (2) ◽  
pp. 80-88
Author(s):  
E.L. LaDue ◽  
W.R. Bryant
Keyword(s):  
Low Income ◽  
Income Tax ◽  
Tax Reform ◽  
Capital Gains ◽  
Dairy Farmer ◽  
Competitive Disadvantage ◽  
Tax Loss ◽  
Tax Accounting

Recent Congressional testimony has focused on the desirability of eliminating certain income tax “preferences” that are important in agriculture. Specifically, separate proposals have urged that capital gains treatment pertaining to livestock, vineyards and orchards be eliminated and that the cash method of tax accounting no longer be permitted. The justification for these proposals is based on the continued activity of wealthy individuals in tax loss or tax sheltered farming, despite provisions of the Tax Reform Act of 1969 to limit such ventures. Furthermore, it is argued that these tax preferences result in a greater subsidy to the high tax bracket individual than low tax bracket individual and thus place low income bonafide farmers at a competitive disadvantage which could force them out of business.

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