Using Tax Return Data to Simulate Corporate Marginal Tax Rates
We document that simulated corporate marginal tax rates based on financial statement data (Shevlin 1990 and Graham 1996a) are highly correlated with simulated rates based on corporate tax return data. We provide algorithms that can be used to estimate the book or tax simulated rates when they are not available. We find that the simulated book marginal tax rate does a better job of explaining financial statement debt ratios than does the analogous tax return variable and discuss how the book simulated rate is likely to be an appropriate measure in settings with global, long-term considerations.
|Date of creation:||Dec 2007|
|Publication status:||published as Using tax return data to simulate corporate marginal tax rates Author(s): Graham J R, Mills L F Journal: Journal of Accounting & Economics, Dec 2008, Volume: 46 Issue: 2 pp.366-388 (23 pages)|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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- Plesko, George & Mills, Lillian, 2003. "Bridging the Reporting Gap: A Proposal for More Informative Reconciling of Book and Tax Income," Working papers 4289-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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- repec:bla:joares:v:36:y:1998:i:1:p:157-166 is not listed on IDEAS
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- Hanlon, Michelle & Laplante, Stacie Kelley & Shevlin, Terry, 2005. "Evidence for the Possible Information Loss of Conforming Book Income and Taxable Income," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 407-442, October.
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- Collins, Daniel W. & Maydew, Edward L. & Weiss, Ira S., 1997. "Changes in the value-relevance of earnings and book values over the past forty years," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 39-67, December.
- John R. Graham, 2003. "Taxes and Corporate Finance: A Review," Review of Financial Studies, Society for Financial Studies, vol. 16(4), pages 1075-1129. Full references (including those not matched with items on IDEAS)
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