What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement

• 成果类型: Article
• 署名作者: Hanlon, Michelle; Slemrod, Joel
• 署名单位: University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2008.09.004
• 发表日期: 2009
• 页码: 126-141
• 关键词: Tax aggressiveness; Tax shelter; Market reaction

摘要

We study the stock price reaction to news about corporate tax aggressiveness. We find that, on average, a company's stock price declines when there is news about its involvement in tax shelters. We find some limited evidence for cross-sectional variation in the reaction. For example, the reaction is more negative for firms in the retail sector, suggesting that part of the reaction may be a consumer/taxpayer backlash. In addition, the reaction is less negative for firms that are viewed to be generally less tax aggressive, as proxied by the firm's cash effective tax rate. We interpret this as being consistent with the market reacting positively to evidence that a firm is trying to reduce taxes when their financial reports would lead one to believe the firm is not tax aggressive. (c) 2008 Elsevier B.V. All rights reserved.