Taxing corporate income in the 21st century

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Contributors......Page 9
Preface......Page 13
1. Introduction......Page 17
2. Conceptual Framework and Previous Work......Page 20
2.1. Ex-Dividend Day Returns and Taxes......Page 22
2.2. Dividend Increase Announcement-Day Returns and Taxes......Page 26
3. Data and Methods......Page 30
4.1. The 2003 Tax Cut Experiment......Page 32
4.2. Time-Series Perspective......Page 33
Parametric Regression Estimates......Page 34
Power Analysis......Page 36
Attempted Solutions......Page 37
5.2. Time-Series Perspective......Page 41
Parametric Regression Estimates......Page 42
Power Analysis......Page 43
Attempted Solutions......Page 44
6. Conclusion......Page 46
References......Page 47
Comments......Page 49
1. Introduction......Page 52
2. The Signaling Argument and Recent Evidence on Dividend Policy......Page 53
3. Recent Changes......Page 54
References......Page 55
1. Introduction......Page 57
2. UK  Dividend Taxation, Before and After July 1997......Page 60
3. Alternative Views of Dividend Taxation......Page 67
4.1 Dividends......Page 71
4.2 Investment......Page 77
5. Stock Market Valuations......Page 79
6. Conclusions......Page 81
A Simple Formal Model of Dividends and Investment......Page 83
A Dividend Tax Paid by Firms......Page 91
Comments......Page 92
References......Page 99
Comments......Page 101
References......Page 108
1. Introduction......Page 109
2. Theory......Page 111
2.1 Announcement Effects under the New View......Page 113
2.3 Announcement Effects with Transitions in Regime......Page 114
2.5 Summary......Page 118
3.1 Event Study Methodology......Page 119
Specifications in This Application......Page 120
3.2 Using the 2004 Election as an Alternative Experiment......Page 121
Event Dates......Page 122
Firm Data......Page 123
4 Basic Results......Page 124
5. Further Results......Page 130
6. Robustness and Sensitivity Analysis......Page 134
7. Conclusions......Page 140
References......Page 141
Comments......Page 143
1. Main Results......Page 144
3. The Events......Page 146
4. Information Content of the Events......Page 147
References......Page 149
Comments......Page 150
References......Page 155
4 How Elastic Is the Corporate Income Tax Base?......Page 156
1.1 Corporate Taxation and Corporate Tax Revenues......Page 157
1.3 Why Does This Parameter Matter?......Page 159
2.1 The Marginal Effective Tax Rate......Page 160
2.2 Data......Page 161
2.3 Constructing Effective Tax Rates......Page 163
3.1 Regression Framework......Page 167
4. Results......Page 173
References......Page 176
Comments......Page 180
Reference......Page 183
Comments......Page 184
Reference......Page 186
1. Introduction and Motivation......Page 187
2. Previous Literature......Page 190
3.1 Details......Page 193
3.2 Discussion......Page 195
4.1 Aggregate......Page 197
4.2 Firm Size......Page 199
4.3 Other Firm Characteristics......Page 206
5.1 Baseline Model and Variable Definitions......Page 209
5.2 Baseline Regression Results......Page 211
5.3 Additional Variable Definitions: Intangibles, Executive Compensation, and Governance......Page 214
Intangible Assets......Page 216
Executive Compensation......Page 217
Governance Quality......Page 218
6. Correlations among Measures of Tax Aggressiveness......Page 219
7. Conclusions......Page 223
References......Page 224
1. Limitations of Data or Analysis......Page 227
2.1 The (Relatively) Low Deficiency Rate......Page 229
Stock Options and Bonuses......Page 230
Corporate Governance......Page 232
References......Page 233
2.1 Accuracy......Page 235
2.2 Representativeness......Page 236
2.3 Interpretation......Page 237
3.1 Time-Series Issues......Page 239
3.3 Sample Selection......Page 240
References......Page 241
1. Introduction......Page 242
2. Existing Literature......Page 245
2.1 Location Effects of Tax Policy......Page 246
2.2 Federal Tax Planning......Page 247
3. How Does State Tax Planning Work?......Page 248
3.1 State Strategies to Offset  Revenue Losses Arising from Tax Planning......Page 250
4. Empirical Design and Data......Page 251
Economic Activity and Corporate Income Tax BaseMeasures......Page 253
Tax Rates......Page 254
Corporate Tax Structure......Page 255
Instruments for GSP......Page 257
5.1 Baseline Model......Page 259
5.2 Baseline Model Modified to Include CIT Rate Interactions......Page 264
5.3 Tax Planning Over Time......Page 267
6. Conclusions......Page 269
References......Page 270
Comments......Page 273
1. Overview and Interpretation of the BDF Methodology......Page 274
2. Does the Residual Effect of Tax Policy Reflect “Tax Planning”?......Page 275
3. The Use of Instrumental Variables Techniques......Page 276
Reference......Page 277
Comments......Page 278
References......Page 283
1. Introduction......Page 284
2. Taxation and International Capital Mobility......Page 286
3.1 Implications of Capital Mobility......Page 291
3.2 Evidence of Country Reactions......Page 292
3.3 Data......Page 294
4.1 Statutory Tax Rates......Page 296
4.2  Effective Tax Rates......Page 299
4.3 Corporate Tax Bases......Page 303
4.4 Indirect Taxes......Page 305
4.5 Total Corporate Tax Collections......Page 307
5. Conclusion......Page 308
1. Some Background......Page 312
2. Empirical Robustness......Page 314
References......Page 315
Comments......Page 316
References......Page 321
1. Introduction......Page 323
2.1 Related Literature......Page 328
2.2 Legislative and Regulatory Changes Affecting  Auditor-Provided Tax Services......Page 329
2.3 The Tax Provision as a New Source of Conflict......Page 332
3.1 Audit and Tax Fee Data......Page 334
3.2 Sample Selection......Page 335
3.3 Empirical Analysis......Page 336
3.4 Analysis of Big Four Audit and Tax Fees......Page 340
3.5 Has the Overall Amount of Corporate Tax Work Declined?......Page 342
4. Industry Restructuring......Page 343
5. Unintended Consequences: More Corporate Tax Collections......Page 347
6. Conclusions......Page 348
Allstate’s Disclosure of the Fees Paid ($) to Deloitte & Touche in its 2002 Financial Statements......Page 349
Comments......Page 354
1.1 Tax Minimization Versus Effective Tax Planning......Page 357
2. Financial Reporting Effects......Page 358
3.1 Alternative Explanations......Page 359
References......Page 360
1. Introduction......Page 361
2.1 The Evolution of the U.S. Income Tax and of Stock Ownership Diffusion......Page 364
2.2 Determinants of  Corporate Governance Arrangements......Page 365
2.3 Taxation and Corporate Governance......Page 366
3. Hypothesis Development......Page 367
4.1 Data Source......Page 372
4.2 Empirical Measures of Ownership Concentration Using Individual Tax Returns......Page 373
4.3 The Dynamics of Ownership Concentration......Page 380
4.4 Alternative Measures Using Estate Tax Returns......Page 381
4.5 Comparisons with Measures Employed in Studies of Corporate Governance......Page 383
5.1 The Empirical Specification......Page 384
5.2 Results......Page 387
6. Conclusion......Page 395
References......Page 396
Comments......Page 400
2. Modeling Tax Progressivity and Ownership Concentration......Page 401
3. The Empirical Results......Page 402
References......Page 403
1. Empirical Issues......Page 405
2. Normative Issues......Page 412
References......Page 414
Index......Page 417