Corporate Tax Avoidance and the Real Effects of Taxation: A Review

Bruehne, Alissa; Jacob, Martin

doi:10.2139/ssrn.3495496

Cited by 33 publications

(30 citation statements)

References 251 publications

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“…Coefficients β 2000 -β 2011 generated by this specification are the empirically estimated differences in the outcome variable between 100 percent QPAI firms and 0 percent QPAI firms in each year 2000-2011. 10 These coefficients are combined with secular trends in the outcome variables using the following two-step procedure.…”

Section: The Effect Of the Dpad On Corporate Activitiesmentioning

confidence: 99%

The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

Ohrn

2018

American Economic Journal: Economic Policy

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This study estimates the investment, financing, and payout responses to variation in a firm's effective corporate income tax rate in the United States. I exploit quasi-experimental variation created by the Domestic Production Activities Deduction, a corporate tax expenditure created in 2005. A 1 percentage point reduction in tax rates increases investment by 4.7 percent of installed capital, increases payouts by 0.3 percent of sales, and decreases debt by 5.3 percent of total assets. These estimates suggest that lower corporate tax rates and faster accelerated depreciation each stimulate a similar increase in investment, per dollar in lost revenue. (JEL D22, D25, G31, G32, H25, H32)

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Section: The Effect Of the Dpad On Corporate Activitiesmentioning

confidence: 99%

The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

Ohrn

2018

American Economic Journal: Economic Policy

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“…Most of these papers do not reference the Scholes-Wolfson framework, but nevertheless the framework is in the background because many of the determinants can be classified as non-tax costs, or effects of other parties, and even implicit taxes. Wilde and Wilson (2018) and Bruhne and Jacob (2019) both provide an excellent summary of this literature. These determinants or areas of research look at family firms, the role of executive compensation, public vs private firms, the role of institutional ownership, corporate governance, managerial characteristics, tax enforcement, reputation, links to governments through state ownership and or government contracting, distance to the nearest IRS office, size of auditor-provided tax services, size of the tax department, effect of country-by-country reporting, and the effect of adoption of IFRS, with a new paper emerging weekly.…”

Section: Early Research In Taxmentioning

confidence: 99%

An Overview of Academic Tax Accounting Research Drawing on U.S. Multinational Taxation

Shevlin

2020

Journal of International Accounting Research

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Economics-based tax research in accounting draws heavily on the Scholes and Wolfson framework. The framework develops a global approach to tax planning where all parties, all taxes, and all costs are to be considered in effective tax planning. Effective tax planning is distinct from tax minimization as the goal of the former is to maximize the after-tax rate of return. The first empirical applications of the framework followed the passage of the Tax Reform Act of 1986. Taxation of multinationals has long been of interest to accounting (and other) researchers and continues to be of interest. The Tax Cuts and Jobs Act of 2017 changed many tax laws including how the U.S. taxes U.S. multinationals. Research examining the ramifications of this latest Tax Act is already well under way.

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“…Since corporate decisions on the level of tax avoidance are not made independent of disclosure choices, it is essential to understand which factors determine tax disclosure behavior and how disclosure decisions interact with actual tax avoidance. Prior surveys on corporate tax avoidance comprehensively review studies that examine the tax behavior of multinational firms (Dharmapala, 2020;Dyreng & Hanlon, 2019) as well as the determinants and, more recently, the effects of corporate tax planning (Brühne & Jacob, 2019;Wilde & Wilson, 2018). 4 While tax avoidance is typically measured using financial statements items, existing reviews pay little 3…”

Section: Introductionmentioning

confidence: 99%

“…Brühne and Jacob (2019) briefly point to the benefits of lower transparency for tax-aggressive firms, but do not discuss the nuances of this relationship, especially with regard to tax transparency.…”

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confidence: 99%

“…For a discussion of the informativeness of tax disclosure, see Section 5. We also refer the reader to the excellent review ofHanlon and Heitzman (2010) on the quality of frequently used tax avoidance measures, which is not within the scope of our survey.27 In their review on tax avoidance,Brühne and Jacob (2019) survey some studies that investigate the association between tax avoidance and firm transparency more broadly. According to their findings, most studies document a negative association between tax avoidance and firms' level of transparency, consistent with tax-avoiding firms being more opaque.…”

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confidence: 99%

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On the Determinants and Effects of Corporate Tax Transparency: Review of an Emerging Literature

Müller¹,

Spengel²,

Vay³

2020

SSRN Journal

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In response to discussions about large multinational enterprises' tax planning activities, legislators around the world have adopted numerous regulations to increase corporate tax transparency. New settings and datasets have spurred empirical research in recent years. Our paper presents a review of this emerging literature on corporate tax transparency. To this end, we first propose a framework to structure the diverse landscape of tax-related disclosures. Second, we elaborate on the conceptual underpinnings of tax transparency by drawing on established theories from financial accounting and CSR reporting research. Third, we survey empirical evidence on corporate tax transparency. We classify the findings into (i) determinants of firms' tax disclosure decisions, (ii) informativeness of different kinds of tax-related disclosure, and (iii) effects of increased tax transparency on firms and their stakeholders. Finally, we synthesize the main inferences and offer suggestions for future research.

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Corporate Tax Avoidance and the Real Effects of Taxation: A Review

Cited by 33 publications

References 251 publications

The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

An Overview of Academic Tax Accounting Research Drawing on U.S. Multinational Taxation

On the Determinants and Effects of Corporate Tax Transparency: Review of an Emerging Literature

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