Deferred tax positions and incentives for corporate behavior around corporate tax changes

James M. Poterba, Nirupama S. Rao, Jeri K. Seidman

Research output: Contribution to journalArticle


A firm's deferred tax position can influence how it is affected by a transition from one tax regime to another. We compile disaggregated deferred tax position data for a sample of large U.S. firms between 1993 and 2004 to explore how these positions might affect firm behavior before and after a pre-announced change in the statutory corporate tax rate. Our results suggest that the heterogeneous deferred tax positions of large U.S. corporations create substantial variation in the short-run effects of tax rate changes on reported earnings. Recognizing these divergent incentives is important for understanding the political economy of corporate tax reform.

Original languageEnglish (US)
Pages (from-to)27-58
Number of pages32
JournalNational Tax Journal
Issue number1
StatePublished - Mar 1 2011



  • Book-tax differences
  • Deferred tax
  • Revaluation
  • Tax policy

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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