Chapter | Securities Transaction Taxes: False Hopes and Unintended Consequences | 1994

Securities Transaction Taxes: What about International Experiences Migrating Markets?

by K. Froot and J. Campbell

Keywords: Corporation taxation; Interest deductibility; cost of capital; corporate finance; Accounting; Borrowing and Debt; Financing and Loans; Interest Rates;

Format: Print

Citation:

Froot, K., and J. Campbell. "Securities Transaction Taxes: What about International Experiences Migrating Markets?" In Securities Transaction Taxes: False Hopes and Unintended Consequences, edited by Suzanne Hammond. Chicago: Irwin Professional Publishing, 1994. (Reprinted in Inversión y Finanzas, 1996.)

UAL is a large air transportation company with roots that go back to the 1920s. As a legacy carrier, going back to before the 1978 deregulation of air transportation markets, United Airlines is burdened with cost structures that make it difficult to compete with newer competitors. In addition, UAL has the burden of $7.6 billion in unfunded pension obligations and $2 billion in unfunded retiree health obligations. In June 2004, UAL is still operating under Chapter 11 bankruptcy protection, which began December 2002. It has needed extensions of the exclusivity period from the bankruptcy court. UAL's plan of reorganization is predicated on receiving $1.8 billion in loan guarantees from the Air Transport Stabilization Board (ATSB). But its request for loan guarantees from the ATSB was recently rejected. The company must decide what to do next and how to emerge from bankruptcy.

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