Search results

1 – 10 of over 8000
To view the access options for this content please click here
Article
Publication date: 23 February 2021

Huabing Wang and Anne Macy

This paper analyzes the effect of corporate tax cuts on the competitiveness of the tax-cutting countries and neighbor countries.

Abstract

Purpose

This paper analyzes the effect of corporate tax cuts on the competitiveness of the tax-cutting countries and neighbor countries.

Design/methodology/approach

This study utilizes four significant corporate tax reforms among the OECD countries in Europe that offer a one-time tax cut of 6% or more. The short-term event study approach examines the stock index reactions for both the tax-cutting countries and the other countries. Multivariate fixed-effect regressions are employed to study the cross-sectional variations in the non-tax-cut countries.

Findings

This paper finds positive excess returns for Slovakia and Germany around the tax-cut passage. Multivariate analysis of stock market reactions of the non-tax-cutting countries reveals some evidence supporting both the positive spillover effect and the negative competitive loss effect. More advanced countries are more likely to experience higher abnormal returns, while higher tax countries are more likely to suffer lower abnormal returns. Other factors identified that might have influenced the effect of a foreign tax cut include the existing trade flows with the tax-cutting countries, whether the country has a common currency and the export orientation of the economy.

Research limitations/implications

The findings are subject to sample-size issues. The lack of results for the other two countries is due to complicating events, as suggested by the further investigation of concurrent news events around the event days.

Practical implications

The simultaneous analysis of the reform countries and the other countries in the region suggests that policymakers need to consider the relative positioning of their country vs the other countries in terms of economic development and current tax burdens when determining the optimal policy for their country or to respond to the tax policy changes in the other countries.

Originality/value

This study offers empirical evidence regarding the effect of corporate tax changes on competitiveness through the lens of stock markets' reactions, which depend on the net results of the spillover gain vs the competitive loss.

Details

EuroMed Journal of Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1450-2194

Keywords

To view the access options for this content please click here
Article
Publication date: 30 December 2020

Louis J. Pantuosco and Danko Tarabar

This paper aims to hypothesize on the relationship between the Millennial workforce and US firms’ response to the Tax Cuts and Jobs Act (TCJA) of 2017. The authors…

Abstract

Purpose

This paper aims to hypothesize on the relationship between the Millennial workforce and US firms’ response to the Tax Cuts and Jobs Act (TCJA) of 2017. The authors postulate that societal pressure from the younger generational cohorts will motivate socially cognizant corporations to share their newly acquired tax benefits with their workforce to attract, retain and inspire employee productivity and retention, as well as customer loyalty.

Design/methodology/approach

The authors empirically examine work-related cultural attitudes of the Millennial generational cohort in the USA, and by exploring related literature on organizational management and supply side economics, the authors aim to connect them to firms’ response to tax cut windfall in a simple theoretical model. The authors complement their methods by using descriptive statistics on firm tax responses that followed the 2017 TCJA.

Findings

The authors offer support for the notion that companies are behaving rationally by providing short-term benefits to employees when employees are, on average, younger. The competitive nature of the global market acts as an incentive to avoid permanent obligations such as wage and benefits increases. The data reveal that a significant number of companies had a transitory reaction to the latest tax cut.

Research limitations/implications

The authors encourage future research, once sufficient time elapses, to exploit the time periods before and after the tax cut to provide a better assessment of the empirical impact of the 2017 tax cut on firm responses, conditional on workforce makeup.

Originality/value

The authors examine whether and how the Millennial cohort might shape firm behavior following changes in tax policy.

Details

Journal of Global Responsibility, vol. 12 no. 1
Type: Research Article
ISSN: 2041-2568

Keywords

To view the access options for this content please click here
Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Downloads
53910

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

Keywords

To view the access options for this content please click here
Book part
Publication date: 15 November 2018

B. Anthony Billings, Cheol Lee and Jaegul Lee

The chapter examines whether the lowering of dividend taxes as part of the US Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) resulted in an increase in…

Abstract

The chapter examines whether the lowering of dividend taxes as part of the US Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) resulted in an increase in dividend payouts at the expense of research and development (R&D) spending. Using 1,206 US firm-years data, we find that R&D investments responded negatively to higher levels of dividend payout in the post-JGTRRA of 2003 tax regime compared with the pre-regime. We also find that R&D intensity and financial constraint moderate this negative relation. That is, this relation only holds for firms in low R&D-intensity industries and firms facing high levels of financial constraint. From a tax policy perspective, even though the tax cut on dividend receipts has the benefit of lowering the cost of equity capital, the benefit appears to have come at the expense of R&D investment.

To view the access options for this content please click here
Expert briefing
Publication date: 16 September 2021

With Congress in the legislative endgame over President Joe Biden's proposed USD4tn spending on infrastructure, education, research and clean energy, changes to the US tax

Details

DOI: 10.1108/OXAN-DB264111

ISSN: 2633-304X

Keywords

Geographic
Topical
To view the access options for this content please click here
Expert briefing
Publication date: 20 February 2018

Impact of US tax plans on Mexico.

To view the access options for this content please click here
Article
Publication date: 14 February 2018

dt ogilvie

Two questions broadly drove this research: Donald Trump promised to fix the economy and create jobs, and he is ending or renegotiating trade treaties. Is he creating more…

Abstract

Purpose

Two questions broadly drove this research: Donald Trump promised to fix the economy and create jobs, and he is ending or renegotiating trade treaties. Is he creating more jobs? How can Trump create a more inclusive economy? The paper aims to discuss these issues.

Design/methodology/approach

This paper closely examines Trump’s economic policies and draws from past Democratic and Republication track records to explain how Trump’s policies will contribute to greater income inequality.

Findings

By all measures, President Trump fails on measures of equality, diversity, and inclusion.

Originality/value

This original paper examines the implications of the Trump administration’s policies in the areas of tax cuts (for small- and medium-sized enterprises rather than large corporations), incentives to support small business growth, entrepreneurship training, education and skills training (to retool Americans), and infrastructure spending.

Details

Equality, Diversity and Inclusion: An International Journal, vol. 37 no. 1
Type: Research Article
ISSN: 2040-7149

Keywords

To view the access options for this content please click here
Article
Publication date: 1 March 2004

Gabriela S. Wolfson and Merl M. Hackbart

Using data obtained from the National Conference of State Legislatures (NCSL), we investigate modifications in state tax codes to determine their characteristics, the…

Abstract

Using data obtained from the National Conference of State Legislatures (NCSL), we investigate modifications in state tax codes to determine their characteristics, the apparent trends of state tax reform, and whether changes constituted comprehensive reform or mere incremental adjustments to existing tax structures. Based on the data, we find that few states achieved comprehensive tax reform in the 1990s despite the fiscal surplus that provided an environment conducive to widespread change. Moreover, we find that a significant number of changes that were enacted in the 1990s involved increases or decreases in state tax revenue that were ultimately tied to economic cycles. We suggest that adequacy in state tax collections may be the most common tax principle adhered to with regard to changes in tax structure. We also conclude that reform efforts in the 1990s were most successful when approached in an incremental fashion in the absence of a significant precipitating reform driver.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 16 no. 1
Type: Research Article
ISSN: 1096-3367

To view the access options for this content please click here
Book part
Publication date: 24 June 2014

Richard Lachmann

I trace and explain how the ratcheting of corporate mergers and deregulation transformed the structure of elite relations in the United States from 1960 to 2010. Prior to…

Abstract

I trace and explain how the ratcheting of corporate mergers and deregulation transformed the structure of elite relations in the United States from 1960 to 2010. Prior to the 1970s there was a high degree of elite unity and consensus, enforced by Federal regulation and molded by structure of U.S. government, around a set of policies and practices: interventionism abroad, progressive tax rates, heavy state investment in infrastructure and education, and a rising level of social spending. I find that economic decline, the loss of geopolitical hegemony, and mobilization from the left and right are unable to account for the specific policies that both Democratic and Republican Administrations furthered since the 1970s or for the uneven decline in state capacity that were intended and unintended consequences of the post-1960s political realignment and policy changes. Instead, the realignment and restructuring of elites and classes that first transformed politics and degraded government in the 1970s in turn made possible further shifts in the capacities of American political actors in both the state and civil society. I explain how that process operated and how it produced specific policy outcomes and created new limits on mass political mobilization while creating opportunities for autarkic elites to appropriate state powers and resources for themselves.

Details

The United States in Decline
Type: Book
ISBN: 978-1-78350-829-7

Keywords

To view the access options for this content please click here
Article
Publication date: 11 September 2017

Dennis Sundvik

The purpose of this paper is to examine three different responses to the Finnish 2005 tax reform that, among other things, reduced the corporate tax rate and hiked…

Downloads
1184

Abstract

Purpose

The purpose of this paper is to examine three different responses to the Finnish 2005 tax reform that, among other things, reduced the corporate tax rate and hiked dividend taxation. Focus lies on the factors influencing the decision to change the fiscal year-end and whether earnings management is more prevalent when the decision is not taken.

Design/methodology/approach

This study uses the financial statement data of Finnish private firms and studies 350 fiscal year-end changing firms and 700 non-changing firms with logistic and linear regression analysis. Discretionary accruals are the proxy for earnings management.

Findings

The results suggest that firms seize the window of opportunity and extend fiscal years depending on the magnitude of the expected tax savings. Firms that do not change their fiscal year-end engage in more tax-induced earnings management. In terms of economic consequences, the earnings management approach is less economically significant.

Research limitations/implications

This study only examines a limited number of firms that change their fiscal year-end, hence, care has been exercised in generalising the findings.

Practical implications

The findings may be considered when structuring future tax reforms, particularly when considering transition rules relating to changes in fiscal year-ends. The study may also have implications beyond tax reforms since the evidence of opportunistic changes in the fiscal year-end can be informative for tax authorities, independent auditors and creditors.

Originality/value

This study contributes to the relatively scarce literature on private firm responses to tax policy changes by analysing both upward and downward earnings management, as well as changes in the fiscal year-end. This is in contrast to previous research that mainly focusses on listed firms and absolute earnings management or earnings management in one direction.

Details

Journal of Applied Accounting Research, vol. 18 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

1 – 10 of over 8000