Historical cost, inflation, and the U.S. corporate tax burden
We study whether the interaction between U.S. tax rules and inflation increases the real U.S. corporate tax burden because tax deductions based on historical cost are not inflation-indexed. We extend prior literature by using new models to examine this prediction. We find a significantly positive as...
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| Veröffentlicht in: | Journal of accounting and public policy 2015-09, Vol.34 (5), p.467-489 |
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| container_end_page | 489 |
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| container_issue | 5 |
| container_start_page | 467 |
| container_title | Journal of accounting and public policy |
| container_volume | 34 |
| creator | Dhaliwal, Dan S. Gaertner, Fabio B. Lee, Hye Seung “Grace” Trezevant, Robert |
| description | We study whether the interaction between U.S. tax rules and inflation increases the real U.S. corporate tax burden because tax deductions based on historical cost are not inflation-indexed. We extend prior literature by using new models to examine this prediction. We find a significantly positive association between tax burden and inflation for capital- and inventory-intensive firms, even after they utilize inflation-mitigating tax law provisions. We also find that the LIFO inventory method mitigates inflation-induced tax distortions. These results provide evidence that capital- and inventory-intensive firms face a higher real tax burden in the presence of inflation. |
| doi_str_mv | 10.1016/j.jaccpubpol.2015.05.004 |
| format | Article |
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| identifier | ISSN: 0278-4254 |
| ispartof | Journal of accounting and public policy, 2015-09, Vol.34 (5), p.467-489 |
| issn | 0278-4254 1873-2070 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_1758940649 |
| source | PAIS Index; Elsevier ScienceDirect Journals |
| subjects | Corporate taxes Inflation Interaction Inventory Law LIFO Prediction Predictions Studies Tax deductions Tax legislation Taxation United States |
| title | Historical cost, inflation, and the U.S. corporate tax burden |
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