The Effects of the Tax Cuts &amp; Jobs Act of 2017 on Defined Benefit Pension Contributions

Gaertner, Fabio B.; Lynch, Daniel P.; Vernon, Mary E.

doi:10.2139/ssrn.3185711

Cited by 9 publications

(6 citation statements)

References 29 publications

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“…And, finally the recent Tax Cuts and Jobs Act of 2017 reduced the top corporate tax rate from 35 percent to a flat 21 percent which offered firms strong incentives to defer taxable income recognition. Gaertner et al (2020) document evidence that firms accelerated their defined contribution pension plan contributions, increasing their tax deduction and reducing their 2017 taxable income while at the same time minimally impacting pension expense for book reporting purposes.…”

Section: Where Does This Paper Fit In the Literature?mentioning

confidence: 99%

Does Public Country‐by‐Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry*

Joshi

Outslay

Persson

et al. 2020

Contemporary Accting Res

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In this study, we examine the effect of increased tax transparency on the tax planning behavior of European banks. In 2014, the European Union introduced public country-by-country reporting requirements to the banking industry. Treating this new requirement as an exogenous shock, we find limited evidence consistent with a decline in income shifting by the banks' financial affiliates in the post-adoption period (starting from 2015). We do not, however, find robust evidence of a significant change in the consolidated book effective tax rates among the affected banks. Our findings suggest that increased transparency from public countryby-country reporting can deter tax-motivated income shifting but that it did not appear to materially influence the banks' overall tax avoidance. Our findings have policy implications for the ongoing debate between the European Parliament, the Organisation for Economic Cooperation and Development, and accounting standard-setting bodies on whether to require multinationals to publish country-by-country reports.

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Section: Where Does This Paper Fit In the Literature?mentioning

confidence: 99%

Does Public Country‐by‐Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry*

Joshi

Outslay

Persson

et al. 2020

Contemporary Accting Res

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show abstract

“…These findings should be useful in ongoing ex post analysis of the effects of TCJA-especially as certain political candidates are currently promoting additional tax reform as part of their legislative agendas and as foreign trade tensions continue. Finally, we also contribute to the budding literature on the consequences of the TCJA (Gaertner et al 2018, Koutney and Mills 2018, Carrizosa et al 2019, Chen et al 2019, Hanlon et al 2019, Overesch and Pflitsch 2019.…”

Section: Introductionmentioning

confidence: 99%

Making Only America Great? Non-U.S. Market Reactions to U.S. Tax Reform

2019

Self Cite

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We study the foreign externalities of the recent U.S. tax reform, commonly known as the Tax Cuts and Jobs Act (TCJA). Specifically, we examine foreign firms' stock returns around key tax reform events. We find significant heterogeneity in market responses by country, industry, and firm. Chinese firms experience large negative returns, especially in steel, business equipment, and chemical manufacturers, whereas the rest of the world experiences positive returns. Firms operating in more differentiated product markets experience positive returns, whereas firms in financial distress experience negative returns, consistent with the TCJA having competitive repercussions. We also find that firms experiencing decreases in effective tax rates following tax reform experience positive returns. Overall, our results suggest that the TCJA had varied, yet systematic effects on foreign firms' shareholders' wealth and the global competitive landscape.

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“…On November 2, 2017, the 115th United States Congress introduced the draft of the Tax Cuts and Jobs Act, which is “the most far‐reaching tax legislation since the Tax Reform Act of 1986” in the U.S. (Gaertner et al., 2018). After officially signed by the U.S. president on December 22, 2017, most of the TCJA 2017 clauses are effective since 2018.…”

Section: Resultsmentioning

confidence: 99%

Mandatory audit partner's rotation and corporate tax avoidance: Early evidence from form AP disclosure

Liu

Wang

2021

J Corp Accounting Finance

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This study examines the impact of mandatory audit partner's rotation on corporate tax avoidance. Using audit partners’ information disclosed in Form AP, we find that companies generally increase their effective tax rates (ETRs) after audit partner's mandatory rotation, and the increase is specifically driven by companies hiring non‐Big four auditors. This implies that incoming auditors, especially those from non‐Big four accounting firms, are more conservative in tax issues. Further analysis suggests that companies engaging in less tax avoidance before and simultaneously purchasing tax services from their auditors have less increase in ETRs after an audit partner's rotation. The findings of this study assist both audit practitioners and tax regulators to better understand the impact of audit partner rotation on firm's tax behaviors.

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The Effects of the Tax Cuts & Jobs Act of 2017 on Defined Benefit Pension Contributions

Cited by 9 publications

References 29 publications

Does Public Country‐by‐Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry*

Does Public Country‐by‐Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry*

Making Only America Great? Non-U.S. Market Reactions to U.S. Tax Reform

Mandatory audit partner's rotation and corporate tax avoidance: Early evidence from form AP disclosure

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