Author(s)

Paulina Ruta

Document Type

Thesis or dissertation

Date of this Version

5-2021

Advisor

Jose Miguel Abito

Abstract

Using data from 720 publicly traded companies, this paper looks at the impact of the 2017 Tax Cut and Jobs Act through two different studies. Firstly, the paper finds that, on average, there was a reduction in the GAAP effective tax rate (ETR) of 8.88%. However, the first study identifies key firm characteristics that determine the actual observed change in ETR for any given firm. The biggest determinant of the change in ETR is a firm’s prior ETR, with percentage foreign income, R&D expense, and firm size as other significant predictors. The second study seeks to identify whether the tax change had any impact on firms’ investment behavior, one of the noted reasons for the policy change. The results did not show that the TCJA, reduction in ETR, had any impact on firm investment behavior as measured by capital expenditures and R&D spending.

Included in

Business Commons

Share

COinS
 

Date Posted: 26 September 2022

 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.