This article examines the extent to which costs imposed on customers and other factors influence tax-motivated income shifting when corporate taxpayers expect tax rates to decline. I find that sellers of durable goods shift defer less income to lower tax rate periods than sellers of nondurable goods. This is consistent with shifting firms considering the effect of their income shifts on their customers. There is also limited evidence that firms with greater market power shift more income than other firms. In addition, I find evidence that, controlling for political costs and scale effects, smaller firms shifted more income than larger firms. This result is inconsistent with a “tax sophistication” hypothesis that larger firms are better able to engage in tax planning activities than smaller firms.
Stock, T. (2004), "AN EMPIRICAL INVESTIGATION OF FACTORS INFLUENCING TAX-MOTIVATED INCOME SHIFTING", Advances in Taxation (Advances in Taxation, Vol. 16), Emerald Group Publishing Limited, Bingley, pp. 147-177. https://doi.org/10.1016/S1058-7497(04)16007-9
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