Supporting Tax Policy Change Through Accounting Discretion: Evidence from the 2012 Elections
研究发现，支持降低法定税率的公司会在2012年大选前两个季度上调有效税率，这种调整与声誉成本、资本市场成本和长期税负等因素相关。
Some corporations attempt to lessen their tax burden through involvement in the legislative process. We identify firms that contributed to congressional candidates who favor reductions in the U.S. corporate statutory tax rate. This support created a temporary incentive to manage effective tax rates (ETRs) up. We document that these firms increased their reported effective tax rate in the two calendar quarters preceding the 2012 election relative to adjacent periods and other firms supporting candidates in the same election. We find that the variation in upward ETR management is correlated with firm-level proxies for potential reputational costs, capital markets costs, and long-run tax burdens. The variation in upward ETR management is also correlated with firm-candidate-level proxies for strength of relationships and competitiveness of election races. Our findings provide new evidence on accounting choices in support of corporate political activity and on the political cost hypothesis in the tax setting. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2842 . This paper was accepted by Shivaram Rajgopal, accounting.