If you haven’t read Roy Cordato’s paper on tax reform because you’ve been waiting for an endorsement from an international financial institution, wait no longer. The IMF has a new paper on how tax policy is biased towards debt. I covered this last week on Charlotte Talks
While the paper does not reference Roy’s paper directly and focuses a great deal more on the way taxation removes one of the basic assumptions of the Modigliani-Miller Theorem of corporate finance, it does show how tax policies encourage debt and thereby make the financial system more vulnerable.
