The Influence of Tax Costs on Organizational Choice in the Natural Resource Industry

2000 ◽  
Vol 22 (1) ◽  
pp. 38-55 ◽  
Author(s):  
Thomas C. Omer ◽  
George A. Plesko ◽  
Marjorie K. Shelley
Keyword(s):  
Natural Resource ◽  
Organizational Form ◽  
Economic Conditions ◽  
Tax Rates ◽  
Firm Characteristics ◽  
Resource Industry ◽  
Organizational Choice ◽  
Marginal Tax Rates ◽  
Tax Costs

This study investigates the influence of TRA86, pre-TRA86 tax strategies, and firm characteristics on S conversions in the natural resource industry. TRA86 shifted substantial individual tax costs to corporations, inviting conversions, but also lowered corporate marginal tax rates and changed aspects of the built-in gain provision to reduce conversion benefits. Built-in gain changes affect industries differently because of differences in asset composition and economic conditions. The natural resource industry had substantial built-in gain potential and was consolidating and restructuring during the mid-80s, making built-in gain realization likely. Our results suggest that built-in gains negatively influenced conversions in the natural resource industry. This study enhances our understanding of the interaction between TRA86 rate changes and other provisions on incentives to convert from C to S corporate status. It also contributes to the organizational form literature by identifying factors related to TRA86, S corporation operating restrictions, firm characteristics, and tax strategies that influence conversion decisions.

The Effect of Taxes on Acquisition Price and Transaction Structure

2000 ◽  
Vol 22 (s-1) ◽  
pp. 1-17 ◽  
Author(s):  
Steven L. Henning ◽  
Wayne H. Shaw ◽  
Toby Stock
Keyword(s):  
Tax Rates ◽  
Corporate Acquisitions ◽  
Transaction Structure ◽  
Marginal Tax Rates ◽  
Tax Status ◽  
Acquisition Price ◽  
Tax Costs

The purpose of this paper is to investigate the effect of the target's tax status on the structure of taxable corporate acquisitions. Specifically, we examine how the taxes imposed on the parties to the transaction are shared. Our results suggest the acquirer bears target tax costs through higher acquisition prices. In addition, our results also suggest that the acquirer pays little, if anything, to the target for the use of target net operating losses. Finally, we find that the target's tax status affects the transaction structure since targets with higher marginal tax rates are more likely to desire contingent payments in the contract.

Legal Form of Joint-stock Companies and Corporate Performance in Russia

2007 ◽  
pp. 112-123
Author(s):  
I. Iwasaki
Keyword(s):  
Organizational Behavior ◽  
Organizational Form ◽  
Institutional Setting ◽  
Federal Law ◽  
Legal Form ◽  
Empirical Relations ◽  
Organizational Choice ◽  
Legal Forms ◽  
Joint Enterprise ◽  
Enterprise Survey

Basing on the results of a Russia-Japan joint enterprise survey conducted in 2005, the paper examines the legal-organizational form of joint-stock companies (JSCs) in Russia. The Federal Law on joint-stock companies stipulates that JSCs should be established in one of the two different legal forms, namely "open" or "closed" companies that provide a unique institutional setting for Russian firms from the viewpoint of their corporate governance. The paper deliberates the determinants of organizational choice between these two legal forms. Then it examines empirical relations between the legal forms of JSCs and their organizational behavior.

Estimates of Effective Marginal Tax Rates on Factor Incomes

1981 ◽  
Vol 54 (2) ◽  
pp. 191 ◽  
Author(s):  
Douglas H. Joines
Keyword(s):  
Tax Rates ◽  
Marginal Tax Rates

EFFECTIVE MARGINAL TAX RATES UNDER THE FEDERAL INDIVIDUAL INCOME TAX: DEATH BY ONE THOUSAND PIN PRICKS?

1998 ◽  
Vol 51 (3) ◽  
pp. 553-564
Author(s):  
THOMAS A. BARTHOLD ◽  
THOMAS KOERNER ◽  
JOHN F. NAVRATIL
Keyword(s):  
Income Tax ◽  
Tax Rates ◽  
Individual Income ◽  
Marginal Tax Rates ◽  
Individual Income Tax

The Incidence, Valuation and Management of Tax-related Reputational Costs: Evidence from a Period of Protest

2021 ◽  
Author(s):  
Dan S. Dhaliwal ◽  
Theodore H Goodman ◽  
P.J. Hoffman ◽  
Casey M Schwab
Keyword(s):  
Media Coverage ◽  
Abnormal Returns ◽  
Tax Avoidance ◽  
Social Protest ◽  
Tax Rates ◽  
Firm Characteristics ◽  
Political Costs ◽  
Time Invariant ◽  
Media Sentiment ◽  
Reputational Costs

We examine the incidence, valuation and management of tax-related reputational costs during 2011, a year of extensive social protest that temporarily increased scrutiny of corporate tax avoidance. We report three main results. First, tax avoidance is positively associated with negative media sentiment during the protest period (i.e., 2011). Second, a hedge portfolio long (short) in low (high) tax avoidance firms generates positive abnormal returns during the protest period. Third, firms experiencing the largest reputational costs during the protest period report higher tax rates in subsequent years. Supplemental analyses indicate tax-related media coverage increased during the protest period, and that the results are unlikely driven by political costs or other time-invariant firm characteristics. Our findings suggest that tax-related reputational costs are not pervasive. Instead, these costs only occur during periods of unusually high scrutiny, which helps explain prior studies' difficulties in providing large-sample evidence of tax-related reputational costs.

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