Deferred Tax Positions and Incentives for Corporate Behavior Around Corporate Tax Changes
AbstractA firm's deferred tax position can influence how it is affected by a transition from one tax regime to another. We compile disaggregated deferred tax position data for a sample of large U.S. firms between 1993 and 2004 to explore how these positions might affect firm behavior before and after a pre-announced change in the statutory corporate tax rate. Our results suggest that the heterogeneous deferred tax positions of large U.S. corporations create substantial variation in the short-run effect of tax rate changes on reported earnings. Recognizing these divergent incentives is important for understanding the political economy of corporate tax reform.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12923.
Date of creation: Feb 2007
Date of revision:
Publication status: published as Poterba, James M., Nirupama S. Rao, and Jeri K. Seidman. "Deferred Tax Positions and Incentives for Corporate Behavior Around Corporate Tax Changes." National Tax Journal 64, 1 (March 2011): 27-57.
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Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
This paper has been announced in the following NEP Reports:
- NEP-ACC-2007-02-24 (Accounting & Auditing)
- NEP-ALL-2007-02-24 (All new papers)
- NEP-PBE-2007-02-24 (Public Economics)
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4289-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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- Poterba, James M. & Rao, Nirupama S. & Seidman, Jeri K., 2011. "Deferred Tax Positions And Incentives For Corporate Behavior Around Corporate Tax Changes," National Tax Journal, National Tax Association, vol. 64(1), pages 27-57, March.
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