Chapter 3. Do Taxes Affect Corporate Decisions A Review This chapter reviews tax research related to whether corporate and personal taxes affect domestic and multinational capital structure debt maturity payout policy compensation policy risk management earnings management leasing pensions R&amp;D partnerships tax shelters transfer pricing repatriation of foreign profits and organizational form. For each topic theory related to how taxes can affect corporate decision making and firm value is reviewed followed by a summary of the related empirical evidence and a discussion of unresolved issues. Tax research generally supports the hypothesis that high tax rate firms make policy choices in response to tax incentives. Many issues remain unresolved however including understanding whether tax effects are of first order importance why firms do not pursue tax benefits more aggressively and measuring the effect of investor level taxes on corporate actions.