How Do Firms Respond to Corporate Taxes?

• 成果类型: Article
• 署名作者: Coles, Jeffrey L.; Patel, Elena; Seegert, Nathan; Smith, Matthew
• 署名单位: Utah System of Higher Education; University of Utah; United States Department of the Treasury
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12405
• 发表日期: 2022
• 页码: 965-1006
• 关键词: taxable income; earnings management; MULTINATIONAL-CORPORATIONS; elasticity; debt; evasion; COSTS; book; DISCLOSURES; avoidance

摘要

Using a novel empirical approach and newly available administrative data on U.S. tax filings, we estimate the corporate elasticity of taxable income, decompose the elasticity into economic responses versus other tax-motivated accounting transactions, and determine how responsiveness varies depending on accounting method, firm size, and interest rate. In response to a 10% increase in the expected marginal tax rate, private U.S. firms decrease taxable income by 9.1%, which indicates a discernibly more elastic response than prevailing estimates. This response reflects a decrease in taxable income of 3.0% arising from real economic responses to a firm's scale of operations and 6.1% arising from accounting transactions via (for example) revenue and expense timing. Responsiveness to the corporate tax rate is more elastic if a firm uses cash (9.9%) rather than accrual accounting (7.4%), if the firm is small (9.9%) rather than large (8.6%), and if the firm discounts future cash flows at a lower rate.