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Analysis of the Corporate Behaviors after the Corporate Tax Cuts with Respect to Job Creation: A Preliminary Study of Select Corporations in the United States of America

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Listed:
  • Narendra Sharma
  • Ebere A Oriaku
  • Ngozi Oriaku

Abstract

A preliminary study of the impact of tax cuts on job creation was done by studying a random sample of 12 largest corporations selected from the Fortune 500 companies. The Annual Reports of the 12 sample companies pre-tax cut and post-tax cut periods were downloaded, and figures tabulated for revenues, property, plant, and equipment (PPE) as well as employees reported by those companies for both the periods. We found that the revenue increased by an average of 7.78 percent which showed signs of growth in those companies, but the investment in PPE by the companies during the same period increased at an average of only 0.32 percent, which indicated that the companies did not divert the resources they saved in taxes to add capacity. Therefore, the potential for jobs growth was nonexistent or minimal. Another indicator showed the same outcome as the companies reported their workforce reduced since 2017 by an average of 0.54 percent.

Suggested Citation

  • Narendra Sharma & Ebere A Oriaku & Ngozi Oriaku, 2019. "Analysis of the Corporate Behaviors after the Corporate Tax Cuts with Respect to Job Creation: A Preliminary Study of Select Corporations in the United States of America," Accounting and Finance Research, Sciedu Press, vol. 8(3), pages 1-43, August.
    • Handle: RePEc:jfr:afr111:v:8:y:2019:i:3:p:43
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    References listed on IDEAS

    as
    1. Alan J. Auerbach, 2018. "Measuring the Effects of Corporate Tax Cuts," Journal of Economic Perspectives, American Economic Association, vol. 32(4), pages 97-120, Fall.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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