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on Public Finance |
| By: | Anmol Bhandari; Ellen McGrattan |
| Abstract: | We construct a firm-year panel of income-tax rate reconciliations from annual 10-K filings of public companies to study the effects of the Tax Cuts and Jobs Act (TCJA) on U.S. multinational profit shifting. These reconciliations decompose the gap between company-level effective tax rates and the federal statutory corporate tax rate, allowing us to isolate the contribution of foreign tax advantages before and after the reform. We find that TCJA significantly reduced the tax rate gap and increased effective tax rates for companies most exposed to pre-TCJA international tax benefits. This resulted in an onshoring of profits with foreign profit shares falling 1.3 percentage points per percentage point of tax increase. Among more exposed companies, we find no differential change in investment, employment, or the geographic distribution of sales and installed capital. A neoclassical model of a multinational that chooses where to book its income rationalizes this pattern: the reform raised the average tax on income booked abroad relative to income booked at home, which governs where profits are reported, while the marginal tax on capital, which governs investment, changed by an amount common to all firms. Controlling for deferred-tax windfall gains leaves our main results unchanged. |
| JEL: | F23 H26 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35805 |
| By: | Nilsson, Pia (Department of Economics and Management, University of Helsinki); Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN)); Roedriguez del Valle, Adrian (Department of Economics and Management, University of Helsinki) |
| Abstract: | We examine how taxation of intergenerational transfers affects the allocation of productive assets within family firms. Using administrative registry data on family-farm successions in Sweden around the 2005 abolition of inheritance and gift taxes, we investigate how the successor’s share of land holdings in the parental and sibling generations responds to the removal of taxes. We use a quasi-experimental event-study design and find that the increase in the successor’s ownership share is about 10–11 percentage points larger among families with greater predetermined exposure to the pre-reform inheritance tax. Results also indicate that the reform led parents to transfer assets earlier and concentrate a larger share of productive assets in the successor through inter vivos gifts. Post-reform successions are associated with higher capital intensity, suggesting that inheritance and gift taxation extends beyond the direct tax burden, affecting property-right allocation and capital intensity in family-operated enterprises. |
| Keywords: | Inheritance taxation; Family firms; Ownership allocation; Capital intensity; Intergenerational transfers |
| JEL: | D13 D20 H20 |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1567 |
| By: | Shi, Yingxin; Shi, Xinyu |
| Abstract: | We exploit the staggered, province-level rollout of China's Fully Digitalized Electronic Invoice (the Shu-Dian- Piao, or FDEI) between late 2021 and 2023 to identify how invoice digitalization affects firms' formal compliance costs and tax compliance, and-most importantly-how these effects are distributed across parties with different bargaining power. Using firms in regions that never opened an FDEI issuance pilot within the window as controls and the Callaway and Sant'Anna (2021) estimator, which is robust to heterogeneous treatment timing, we document three findings. First, on average, firms' administrative- expense ratio rises by about 0.26 percentage points after treatment, with no detectable pre-trend; audit fees, financial-expense ratios, and top-five supplier/customer shares do not change significantly. Second, the increase is highly concentrated: it is about 0.33 percentage points for non-state-owned firms and 0.40 percentage points for small firms, while it is insignificant for state-owned and large firms. Third, tax compliance, measured by book-tax differences, the Desai-Dharmapala residual, and effective tax rates, does not improve on average or in any ownership/size subgroup. The claim robustly supported by the data is therefore the asymmetric incidence of formal compliance costs toward weaker market participants-not the stronger claim that compliance improvement is "decoupled" from compliance costs. The evidence should be read as short-run and conservative, given the concentration of treatment in 2023, the short post-period, and nationwide spillovers from the separately rolled-out receipt side. |
| Keywords: | electronic invoice, tax administration, compliance cost, incidence, staggered difference-in differences, China |
| JEL: | H26 H32 K34 O17 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:344060 |