Corporate Tax Preferences before and after the Tax Cuts and Jobs Act of 2017

2020 ◽  
Vol 73 (4) ◽  
pp. 1065-1086
Author(s):  
Erin Henry ◽  
Richard Sansing
Keyword(s):  
Financial Performance ◽  
Firm Characteristics ◽  
Corporate Tax ◽  
Full Sample ◽  
Before And After ◽  
Jobs Act ◽  
Loss Firms ◽  
Tax Cuts

We examine the effect of the Tax Cuts and Jobs Act of 2017 (TCJA) on corporate tax preferences and how this effect varies with firm characteristics such as financial performance. We show that the TCJA significantly reduced the extent to which a subsample of profitable firms is tax favored, but it did not change average cash tax differences for the full sample that includes firms with losses. The associations between the tax preferences of profitable firms and their characteristics were generally unaffected by the TCJA. In a sample that includes loss firms, we find that larger firms are less tax favored after the TCJA.

scholarly journals Measuring the Effects of Corporate Tax Cuts

2018 ◽  
Vol 32 (4) ◽  
pp. 97-120 ◽  
Author(s):  
Alan J. Auerbach
Keyword(s):  
Multinational Corporations ◽  
Income Tax ◽  
Capital Investment ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Corporate Tax ◽  
The Law ◽  
Jobs Act ◽  
The Impact ◽  
Tax Cuts

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the changes in the treatment of traditional “C” corporations—those corporations subject to a separate corporate income tax. Beginning in 2018, the federal corporate tax rate fell from 35 percent to 21 percent, some investment qualified for immediate deduction as an expense, and multinational corporations faced a substantially modified treatment of their activities. This paper seeks to evaluate the impact of the Tax Cuts and Jobs Act to understand its effects on resource allocation and distribution. It compares US corporate tax rates to other countries before the 2017 tax law, and describes ways in which the US corporate sector has evolved that are especially relevant to tax policy. The discussion then turns the main changes of the Tax Cuts and Jobs Act of 2017 for the corporate income tax. A range of estimates suggests that the law is likely to contribute to increased US capital investment and, through that, an increase in US wages. The magnitude of these increases is extremely difficult to predict. Indeed, the public debate about the benefits of the new corporate tax provisions enacted (and the alternatives not adopted) has highlighted the limitations of standard approaches in distributional analysis to assigning corporate tax burdens.

Profit Shifting before and after the Tax Cuts and Jobs Act

2020 ◽  
Vol 73 (4) ◽  
pp. 1233-1266
Author(s):  
Kimberly A. Clausing
Keyword(s):  
The United States ◽  
Tax Revenue ◽  
Profit Shifting ◽  
Tax Base ◽  
Foreign Countries ◽  
Before And After ◽  
Corporate Profits ◽  
Jobs Act ◽  
The U.S ◽  
Tax Cuts

In recent years, profit shifting by multinational companies (MNCs) has generated substantial revenue costs to the U.S. government. The Tax Cuts and Jobs Act (TCJA) changed U.S. international tax law in several important ways. This paper discusses the nature of these changes and their possible effects on profit shifting. The paper also evaluates the effects of the global intangible low-taxed income (GILTI) tax on the location of taxable profits. Once company adjustment to the legislation is complete, estimates suggest that the GILTI tax will reduce the corporate profits of U.S. multinational affiliates in haven countries by about 12-16 percent, modestly increasing the tax base in both the United States and in higher-tax foreign countries. However, a per-country minimum tax would generate much larger increases in the U.S. tax base; a per-country tax at the same rate reduces haven profits by 23-31 percent, resulting in larger gains in U.S. tax revenue.

Corporate Behavioral Responses to the TCJA for Tax Years 2017-2018

2020 ◽  
Vol 73 (4) ◽  
pp. 1109-1134
Author(s):  
Tim Dowd ◽  
Christopher Giosa ◽  
Thomas Willingham
Keyword(s):  
Behavioral Responses ◽  
Corporate Tax ◽  
Corporate Response ◽  
Tax Rate ◽  
Tax Returns ◽  
Large Corporations ◽  
Jobs Act ◽  
Statutory Tax Rate ◽  
Tax Cuts

We analyze the initial corporate response to the 2017 enactment of the “Tax Cuts and Jobs Act” (TCJA). The TCJA changed many corporate tax provisions, including a reduction of the corporate statutory tax rate from 35 percent to 21 percent effective in 2018 and sweeping changes to the taxation of income earned abroad by U.S. corporations. Based on a sample of U.S. corporate tax returns, we find that corporations accelerated deductions into 2017 and delayed income into 2018, thereby minimizing their taxes. We estimate an income and deduction shifting tax elasticity of -0.11 and 0.08, respectively. Additionally, we study detailed tax returns of 81 large corporations to understand how those changes impacted them.

Examining internal capability determinants on firms' financial performance before and after going public: a case of listed firms in Thailand

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tanakrit Wattanawarangkoon ◽  
Janthorn Sinthupundaja ◽  
Nathridee Suppakitjarak ◽  
Navee Chiadamrong
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Qualitative Comparative Analysis ◽  
Firm Characteristics ◽  
Going Public ◽  
Content Type ◽  
Listed Firms ◽  
Firm Financial Performance ◽  
Before And After ◽  
One Year

PurposeThis study aims to empirically analyze the effect of firm financial strengths (liquidity, leverage, and cost of goods sold) and firm characteristics (utilization, tangibility and company size) towards firm financial performance and study the differences of these effects before and after firms going public.Design/methodology/approachThe analysis is based on 159 firms listed on the Stock Exchange of Thailand (SET) during the transition periods of interest from one year before each firm became a listed firm and up to five years after becoming a listed firm (data collection from 2002 to 2019). Fuzzy set qualitative comparative analysis (fsQCA) is applied for the analysis.FindingsThe empirical evidence shows that the firms have to maintain different levels of determinants during different years of operation. Before becoming listed firms, the firms' size plays a significant role in determining the firms' financial performance. Different characteristics are required, according to the size of the firms. One year after becoming listed firms, a low level of production and operating expenses in relation to sales and low leverage are the two important factors for superior financial performance. Then, 2–5 years after becoming listed firms and after a steady state is reached, two more factors, good liquidity and high tangibility, are shown to be significant for good financial performance of the firms.Originality/valueUnlike prior studies, this study explains the causal relationships or combinations of determinants of financial strengths and firm characteristics, before and after going public toward good financial performance of firms, which cannot be identified by analyzing the calendar-year performance.

PERBEDAAN FINANCIAL PERFORMANCE PASCA SECONDARY OFFERINGS

Wahana ◽  
2019 ◽  
Vol 22 (1) ◽  
pp. 41-49
Author(s):  
Djaja Perdana ◽  
Herbowo Herbowo
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Poor Performance ◽  
Rank Test ◽  
Growth Ratio ◽  
Significant Difference ◽  
Before And After ◽  
Signed Rank Test ◽  
Asset Turnover

This study aims to examine the differences in corporate financial performance before and after secondary offerings. The financial performance is proxied by WCR, DER, Solvency, ROA, ROE, Asset Turnover (ATO) and Growth ratio which representing the value of liquidity, financing, activity, performance and growth of the firm. The study involved 67 samples of the companies listed on the Indonesia Stock Exchange conducting secondary offerings during 2008-2013 period and selected through purposive random sampling method and using Financial Statement data from 2005-2016 period. Hypothesis test is performed using Wilcoxon Signed Rank test. The results of this study indicate that there is no significant difference in the ratio of Solvency, ROA and ROE between before and after secondary offerings, but there are significant differences in the ratio of WCR, DER, Asset Turnover and Growth. WCR ratio after secondary offerings increased, while DER ratio after secondary offerings decreased, the condition of both ratios showed better performance. While the indication of poor performance seen in decreasing asset turnover ratio and growth ratio.Keywords : agency theory, financial performance, secondary offerings

ANALISIS KINERJA KEUANGAN PERUSAHAAN PROPERTI YANG TERDAFTAR DI BEI SEBELUM DAN SESUDAH KEBIJAKAN LOAN TO VALUE

2019 ◽  
Vol 4 (1) ◽  
pp. 79-90
Author(s):  
Ghaniy Ridha Prima ◽  
Hermanto Siregar ◽  
Ferry Syarifuddin
Keyword(s):  
Real Estate ◽  
Financial Performance ◽  
Stock Exchange ◽  
Sample Selection ◽  
Test Analysis ◽  
Asset Return ◽  
Return On Equity ◽  
Analysis Technique ◽  
Significant Difference ◽  
Before And After

The purpose of this study is to provide empirical evidence of the effects of the Loan to Value (LTV) policy on the financial performance of property and real estate companies listed on the Indonesia Stock Exchange (IDX). The sample selection uses a purposive sampling method of 42 property and real estate companies that meet the criteria. The research period is divided into 2 namely before the Loan to Value policy (2013-2014) and after the Loan to Value policy (2016-2017) with the Paired Sample t Test analysis technique. The test results show if the current ratio, Return on Asset, Return on Equity and Debt to Asset have significant differences between before and after the LTV policy is applied. While the fast ratio, cash ratio, net profit margin and Debt to Equity did not show a significant difference. Keywords: Financial Performance, Loan to Value, Property and Real Estate, Profitability Ratio, Liquidity Ratio, Solvability Ratio.

Transocean and the History of Tax Inversions

2018 ◽  
Vol 34 (1) ◽  
pp. 1-12
Author(s):  
Susan M. Albring ◽  
Randal J. Elder ◽  
Mitchell A. Franklin
Keyword(s):  
Multinational Corporations ◽  
Economic Impacts ◽  
Income Taxes ◽  
Tax Rates ◽  
Corporate Tax ◽  
Corporate Income Taxes ◽  
History Of ◽  
Jobs Act ◽  
The U.S ◽  
Over Time

ABSTRACT The first tax inversion in 1983 was followed by small waves of subsequent inversion activity, including two inversions completed by Transocean. Significant media and political attention focused on transactions made by U.S. multinational corporations that were primarily designed to reduce U.S. corporate income taxes. As a result, the U.S. government took several actions to limit inversion activity. The Tax Cuts and Jobs Act of 2017 (TCJA) significantly lowered U.S. corporate tax rates and one expected impact of TCJA is a reduction of inversion activity. Students use the Transocean inversions to understand the reasons why companies complete a tax inversion and how the U.S. tax code affects inversion activity. Students also learn about the structure of inversion transactions and how they have changed over time as the U.S. government attempted to limit them. Students also assess the tax and economic impacts of inversion transactions to evaluate tax policy.

How Gaming Applications of CALL influence inputs of English Grammar: كيف تؤثر تطبيقات ألعاب الكمبيوتر المساعدة في تعليم اللغة على مدخلات قواعد اللغة الإنجليزية

2020 ◽  
Vol 4 (47) ◽  
Author(s):  
Atif Obaid M Alsuhaymi
Keyword(s):  
Language Learning ◽  
English Language ◽  
Language Education ◽  
Computer Assisted ◽  
Computer Assisted Language Learning ◽  
English Language Education ◽  
Full Sample ◽  
English Grammar ◽  
Before And After ◽  
Post Test

The present study aims to research the influences of games through Computer-Assisted Language Learning (CALL) compared to Teacher-Centered Instruction (TCI) on teenagers' achievement in English language education in Saudi Arabia. Two groups of students tested, before and after instruction, so to determine success of the application of pedagogies. The full sample consisted of 22 teenagers, divided randomly, into two equal groups. The first group was the control (TDI) group, which used a school textbook. The second group was the experimental group (CALL), which given a CALL application, based on the game ‘Kahoot.’ Two types of tests were conducted, a pre-test and a post-test, at each of two periods for each group. The pre-test administered before instruction, and the post-test taken after the instructional period. Findings indicate that both groups increased their proficiencies with English object pronouns. However, performance on the post-test by the experimental (CALL) group significantly exceeded that of the control (TCI) group.

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