An Evaluation of Alternative Measures of Corporate Tax Rates

48 Pages Posted: 25 Sep 1999

See all articles by George A. Plesko

George A. Plesko

University of Connecticut School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: July 1999

Abstract

This paper examines the ability of financial statement measures of average and marginal tax rates to capture tax attributes utilizing a matched sample of firm-level tax return and Compustat data.

The results suggest that commonly used measures of average tax rates provide little insight about annual corporate tax burdens, and may introduce substantial bias into statistical models. Marginal tax rates proxies perform better, but there appears to be little, if any, empirical value added by methods that go beyond easily constructed measures traditionally used in the literature.

JEL Classification: G30, H25, M41, C20

Suggested Citation

Plesko, George A., An Evaluation of Alternative Measures of Corporate Tax Rates (July 1999). Available at SSRN: https://ssrn.com/abstract=174688 or http://dx.doi.org/10.2139/ssrn.174688

George A. Plesko (Contact Author)

University of Connecticut School of Business ( email )

School of Business
Storrs, CT 06269-2041
United States
860-486-6421 (Phone)

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