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This paper aims to define corporate marginal tax rates and assess how asymmetric tax treatment affects business decisions.

Estimating Corporate Marginal Tax Rates with Asymmetric Tax Treatment of Gains and Losses.

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This paper aims to define corporate marginal tax rates and assess how asymmetric tax treatment affects business decisions.
Defined corporate marginal tax rates according to changes in taxes payable with respect to taxable income.
Presented four scenarios to illustrate the impact of net operating loss (NOL) rules on marginal tax rates.
Used a simulation procedure on a stratified random sample of 200 firms from Compustat to generate future taxable incomes.
Identified clear shortcomings in existing proxies for estimating corporate marginal tax rates.
Showed that future taxable income significantly influences the defined marginal tax rates.
Demonstrated the practicality of the simulation procedure for firm-specific tax rate estimates.

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Randomized trial estimates corporate marginal tax rates in firms, indicating the influence of tax rules on business decisions.

Terry Shevlin (1990) studied this question.

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