THE EFFECTS OF RECENT CORPORATE TAX CHANGES ON U.S. INTERNATIONAL TRADE

This paper estimates the incidence of state corporate taxes on the welfare of workers, landowners, and firm owners using variation in state corporate tax rates and apportionment rules. We develop a spatial equilibrium model with imperfectly mobile firms and workers. Firm owners may earn profits and be inframarginal in their location choices due to differences in location-specific productivities. We use the reduced-form effects of tax changes to identify and estimate incidence as well as the structural parameters governing these impacts. In contrast to standard open economy models, firm owners bear roughly 40 percent of the incidence, while workers and landowners bear 30–35 percent and 25–30 percent, respectively. (JEL H22, H25, H32, H71, R23, R51)

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The Effect of Hedge Fund Activism on Corporate Tax Avoidance

The Accounting Review ◽

10.2308/accr-50195 ◽

2012 ◽

Vol 87 (5) ◽

pp. 1493-1526 ◽

Cited By ~ 141

Author(s):

C. S. Agnes Cheng ◽

Henry He Huang ◽

Yinghua Li ◽

Jason Stanfield

Keyword(s):

Hedge Fund ◽

Tax Avoidance ◽

Securities And Exchange Commission ◽

Data Availability ◽

Corporate Tax ◽

Track Record ◽

Hedge Fund Activism ◽

Tax Savings ◽

Tax Changes ◽

The Impact

ABSTRACT This paper examines the impact of hedge fund activism on corporate tax avoidance. We find that relative to matched control firms, businesses targeted by hedge fund activists exhibit lower tax avoidance levels prior to hedge fund intervention, but experience increases in tax avoidance after the intervention. Moreover, findings suggest that the increase in tax avoidance is greater when activists have a successful track record of implementing tax changes and possess tax interest or knowledge as indicated by their Securities and Exchange Commission (SEC) 13D filings. We also find that these greater tax savings do not appear to result from an increased use of high-risk and potentially illegal tax strategies, such as sheltering. Taken together, the results suggest that shareholder monitoring of firms, in the form of hedge fund activism, improves tax efficiency. JEL Classifications: G32; G34; H26. Data Availability: Data are available from sources identified in the text.

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Deferred Tax Positions and Incentives For Corporate Behavior Around Corporate Tax Changes

National Tax Journal ◽

10.17310/ntj.2011.1.02 ◽

2011 ◽

Vol 64 (1) ◽

pp. 27-57 ◽

Cited By ~ 17

Author(s):

James M. Poterba ◽

Nirupama S. Rao ◽

Jeri K. Seidman

Keyword(s):

Corporate Tax ◽

Corporate Behavior ◽

Deferred Tax ◽

Tax Changes

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On the Political Economy of State Corporate Tax Reforms in the U.S.

Research in Applied Economics ◽

10.5296/rae.v11i3.15043 ◽

2019 ◽

Vol 11 (3) ◽

pp. 25

Author(s):

Eliakim Kakpo

Keyword(s):

Political Economy ◽

Political Ideology ◽

The Political ◽

Tax Rates ◽

Corporate Tax ◽

Tax Reforms ◽

Economic Cycles ◽

State Tax ◽

Economic Developments ◽

Tax Changes

This paper discusses the political economy of U.S. state corporate tax reforms. Using a unique dataset of state effective corporate tax rates over the period 1969-2015, I observe that business tax changes are associated with tax competition, swings in economic cycles, and left-right political ideology. In contrast, long-term debt and budgetary pressures do not correlate with state corporate tax policies. Moreover, I document a regional heterogeneity and notice a slowdown in state tax changes after the Federal Reform Act of 1986. These findings matter for the empirics of corporate tax incidence, which is increasingly concerned with the endogeneity between tax reforms and other economic developments.

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