Public Tax-Return Disclosure

51 Pages Posted: 21 Feb 2018

See all articles by Jeffrey Hoopes

Jeffrey Hoopes

University of North Carolina (UNC) at Chapel Hill

Leslie A. Robinson

Dartmouth College - Accounting; Dartmouth College - Tuck School of Business

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Date Written: February 2018

Abstract

We investigate the consequences of public disclosure of information from company income tax returns filed in Australia. Supporters of more disclosure argue that increased transparency will improve tax compliance, while opponents argue that it will divulge sensitive information that is, in many cases, misunderstood. Our results show that in Australia large private companies experienced some consumer backlash and, perhaps partly in anticipation, some acted to avoid disclosure. We detect a small increase (decrease) in tax payments for private (public) firms subject to disclosure suggesting differential costs of disclosure across firms. Finally, we find that investors react negatively to anticipated and actual disclosure of tax information, most likely due to anticipated policy backlash rather than consumer backlash or the revelation of negative information about cash flows. These findings are important for both managers and policy makers, as the trend towards increased tax disclosure continues to rise globally.

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Suggested Citation

Hoopes, Jeffrey and Robinson, Leslie and Slemrod, Joel B., Public Tax-Return Disclosure (February 2018). NBER Working Paper No. w24318. Available at SSRN: https://ssrn.com/abstract=3127058

Jeffrey Hoopes (Contact Author)

University of North Carolina (UNC) at Chapel Hill

Leslie Robinson

Dartmouth College - Accounting ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-4018 (Phone)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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