Tax Avoidance through corporate accounting: Insights for corporate tax bases

• 成果类型: Article
• 署名作者: Heiser, Eric; Love, Michael; Mortenson, Jacob
• 署名单位: Columbia University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2025.105336
• 发表日期: 2025
• 关键词: Tax avoidance; corporate taxation; reclassification

摘要

How do firms respond when a tax reform changes the relative costs of inputs? We exploit a reform in Texas that broadened the corporate tax base and created a 1% tax wedge favoring both cost of goods sold (COGS) and worker compensation over other types of expenses. We find no discernible real change in inputs, and little avoidance response into worker compensation, but find a large avoidance response reclassifying costs into COGS (a 4% base reduction, with elasticity-5). Our results highlight the importance of enforceable boundaries when designing broader corporate tax bases.