Abstract

http://ssrn.com/abstract=964886
 
 

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


James M. Poterba


Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Nirupama Rao


New York University (NYU) - Robert F. Wagner Graduate School of Public Service

Jeri K. Seidman


University of Texas at Austin - McCombs School of Business

February 2007

NBER Working Paper No. w12923

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 effect of tax rate changes on reported earnings. Recognizing these divergent incentives is important for understanding the political economy of corporate tax reform.

Number of Pages in PDF File: 50

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Date posted: February 23, 2007  

Suggested Citation

Poterba, James M. and Rao, Nirupama and Seidman, Jeri K., Deferred Tax Positions and Incentives for Corporate Behavior Around Corporate Tax Changes (February 2007). NBER Working Paper No. w12923. Available at SSRN: http://ssrn.com/abstract=964886

Contact Information

James M. Poterba (Contact Author)
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
E52-350
Cambridge, MA 02142
United States
617-253-6673 (Phone)
617-253-1330 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Nirupama Rao
New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )
The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States
Jeri K. Seidman
University of Texas at Austin - McCombs School of Business ( email )
Austin, TX 78712
United States
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