Journal of Financial Stability Vol. 72 2024
The macroeconomic costs of the bank tax
Abstract
In this paper, we investigate the real effects of special taxation on banks. We provide evidence that the introduction of a new fiscal levy on banks significantly impairs their performance and has an adverse impact on the real economy through the lending channel. Using micro-level data on lending relationships, we identify the credit supply shock related with a bank tax controlling for loan demand factors. We compute a firm-specific measure of firm exposure to burdened credit institutions. We find a negative impact of the tax shock on investment and output. Our results are important from a policy perspective as they shed light on the economic consequences of double taxation on banks.
- DOI
- 10.1016/j.jfs.2024.101262
- Volume
- 72
- Pages
- 101262
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref