Taxing Away M&A

Would taxing corporate capital gains at a lower rate generate more mergers and acquisitions? It appears so, according to academics Lars P. Feld, Martin Ruf, Ulrich Schreiber, Maximilian Todtenhaupt and Johannes Voget. Their original study of M&A in 30 countries finds that every one-percentage-point reduction in a nation’s corporate capital gains tax rate generates an incremental 1.1% of merger activity annually. Thus, the authors call for a reduction in the corporate capital gains tax, particularly in countries with high rates, to unlock economic productivity and growth. getAbstract recommends this informative and scholarly read to tax experts, business managers and tax policy makers.