Abstract
A firm's deferred tax position can influence how it is affected by a transition from one tax regime to another. We compile disaggregated deferred tax position data for a sample of large U.S. firms between 1993 and 2004 to explore how these positions might affect firm behavior before and after a pre-announced change in the statutory corporate tax rate. Our results suggest that the heterogeneous deferred tax positions of large U.S. corporations create substantial variation in the short-run effects of tax rate changes on reported earnings. Recognizing these divergent incentives is important for understanding the political economy of corporate tax reform.
Original language | English (US) |
---|---|
Pages (from-to) | 27-58 |
Number of pages | 32 |
Journal | National Tax Journal |
Volume | 64 |
Issue number | 1 |
DOIs | |
State | Published - Mar 2011 |
Keywords
- Book-tax differences
- Deferred tax
- Revaluation
- Tax policy
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics