The Nature of Corporate Income Tax Under a Full Imputation Tax Regime: A Test of Functional Fixation
检验了台湾股市在1998年税改后如何理解企业所得税性质的变化，发现市场能感知这一变化并做出反应，支持了有效市场假说而非功能固着假说。
This paper tests two competing hypotheses describing investors’ behavior: the efficient market hypothesis and the functional fixation hypothesis. In particular, this study examines how Taiwan's stock market interprets the nature of corporate income tax after the 1998 Tax Reform, which switches from the classical tax system to the integrated tax system. This Tax Reform changes the nature of corporate income tax from a pure operating expense to an individual shareholder's tax credit, but current GAAP still treats it as an operating expense in the income statement. The empirical results show that Taiwan's stock market perceives the change in nature of corporate income tax and responds accordingly.