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)
New York University (NYU) - Robert F. Wagner Graduate School of Public Service
Jeri K. Seidman
University of Virginia - McIntire School of Commerce
NBER Working Paper No. w12923
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
Date posted: February 23, 2007
© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo7 in 0.328 seconds