An Analysis of the Relative U.S. Tax Burden of U.S. Corporations Having Substantial Foreign Ownership

Posted: 2 Jun 2000

See all articles by Michael Kinney

Michael Kinney

Texas A&M University - Department of Accounting

Janice Lawrence

affiliation not provided to SSRN

Abstract

We compare the tax-paying behavior of U.S. firms substantially influenced by foreign-domiciled firms with other U.S. firms. Because public information is lacking on U.S. firms wholly-owned by foreign investors, we concentrate on publicly held firms with "significant," but not 100 percent, foreign ownership. Public financial statements are analyzed rather than Internal Revenue Service data. We find firms with significant foreign ownership pay less tax than other U.S. firms, but find no support for the hypothesis that the reduced tax burden is attributable to income manipulation. Our evidence suggests that foreign investors select U.S. targets that are (or become) less profitable than their industry counterparts.

JEL Classification: H21

Suggested Citation

Kinney, Michael R. and Lawrence, Janice E., An Analysis of the Relative U.S. Tax Burden of U.S. Corporations Having Substantial Foreign Ownership. National Tax Journal, March 2000. Available at SSRN: https://ssrn.com/abstract=222532

Michael R. Kinney (Contact Author)

Texas A&M University - Department of Accounting ( email )

430 Wehner
College Station, TX 77843-4353
United States
979-862-2078 (Phone)
979-845-0028 (Fax)

Janice E. Lawrence

affiliation not provided to SSRN

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