Large Management Buyouts and Federal Tax Revenues
- Topics:
- Management Buy out
- Source:
- Marist College
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Overview: "This paper examines the impact of large management buyouts (MBOs) on federal tax revenues collected by the U.S. Treasury for the years 1982 to 1992. Little prior research examining the overall tax impact of MBOs has been performed. Many studies examine the tax effects of one or more portions of an MBO. This study attempts to make some modifications to their study. It broadens the number of firms and tax effects, examines different years, and uses actual data rather than a combination of actual data and projections. In general, this study finds that large MBOs produce a tax loss to the Treasury rather than a tax gain. Operating income in general decreases after an MBO and that decreased taxes collected from income. Some firms become bankrupt, and large institutional shareholders of many of the MBO firms mean that the Treasury realizes little from the shareholders’ large capital gain from the going private purchase. "
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Format: WORD | Date: Jan 2003 | Pages: 23
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