Utilizing a novel identification strategy, we uncover evidence that reducing the investment income tax rate increases acquisition activity by private equity acquirers. Applying a difference-in-difference methodology, we find that acquisitions sponsored by private equity firms nearly doubled following the investment income tax rate reductions associated with the Taxpayer Relief Act of 1997 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. We attribute our findings to private equity fund structures and managing partners’ ability to capture the expected benefit of lower capital gains tax rates. These findings are robust to controlling for target shareholders’ tax incentives, as well as firm, industry, and macroeconomic factors possibly influencing acquisition activity.

利用一种新颖的识别策略，我们发现了降低投资所得税税率会增加私募股权收购方收购活动的证据。应用差异法，我们发现，与1997年《纳税人减免法》和2003年《就业与增长税减免和解法》相关的投资所得税税率降低之后，私募股权公司发起的收购几乎翻了一番。对私募股权基金结构的调查结果，以及管理合伙人获得较低资本收益税率的预期收益的能力。这些发现对于控制目标股东的税收优惠政策以及可能影响收购活动的公司，行业和宏观经济因素是有力的。