Intertemporal Income Shifting Around a Large Tax Cut: the Case of Depreciations

@article{Dobbins2018IntertemporalIS,
  title={Intertemporal Income Shifting Around a Large Tax Cut: the Case of Depreciations},
  author={Laura Dobbins and Sebastian Eichfelder and F. Hechtner and Jochen Hundsdoerfer},
  journal={Schmalenbach Business Review},
  year={2018},
  volume={70},
  pages={313-340}
}
A corporate tax rate cut provides an incentive for corporations to shift taxable income from years before the tax rate cut to post-reform years. Our study analyzes whether depreciations and write-offs are used to achieve intertemporal income shifting. Using a panel of German manufacturing firms, we test in a difference-in-differences setting whether firms reacted to the announced 2008 corporate tax rate cut of 10 percentage points by accumulating depreciation expenses in the pre-reform year… Expand

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