Data and Code for: The Costs of Corporate Tax Complexity

Principal Investigator(s): View help for Principal Investigator(s) Eric Zwick, University of Chicago Booth School of Business

Version: View help for Version V1

Name	File Type	Size	Last Modified
20180406_code			01/04/2021 04:53:PM

Project Citation:

Zwick, Eric. Data and Code for: The Costs of Corporate Tax Complexity. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-04-08. https://doi.org/10.3886/E119153V1

Project Description

Summary: Does tax code complexity alter corporate behavior? We investigate this question by studying the decision to claim refunds for tax losses. In a sample of 1.2M observations from the population of corporate tax returns, only 37 percent of eligible firms claim their refund. A simple cost-benefit analysis of the tax loss choice cannot explain low take-up, motivating an exploration of how complexity alters this calculation. Research designs exploiting tax preparer switches, deaths, and relocations show that sophisticated preparers increase claim rates for small firms. Imperfect take-up has implications for measuring marginal tax rates and for the design of fiscal policy.

Scope of Project

Subject Terms: tax complexity; corporate taxation; managerial decision-making; fiscal policy; stimulus; liquidity

JEL Classification:
      D22 Firm Behavior: Empirical Analysis
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H32 Fiscal Policies and Behavior of Economic Agents: Firm

Geographic Coverage: United States

Time Period(s): 1998 – 2011

Collection Date(s): 2012 – 2015

Data Type(s): program source code

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V1 [2021-04-08]

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