This paper examines if, when, and to what extent multinational tax incentives incrementally explain where firms move offshored U.S. jobs. Using jobs data from a Department of Labor program called Trade Adjustment Assistance, I find a significant association between tax incentives and both the likelihood that a foreign country hosts offshored U.S. jobs and the number of U.S. jobs it hosts. This association is stronger when managers have discretion to coordinate cross-border transactions internally and when they do not face political costs imposed by labor unions. Following instances of offshoring, I find some evidence that offshoring firms have lower effective tax rates, but these reductions are concentrated within larger layoffs in which jobs are sent to low-tax countries. These findings are relevant to understanding the real effects and welfare consequences of incentives created by current U.S. tax policy.

This study examines whether financial accounting standards moderate the effectiveness of tax policy. Specifically, we examine whether myopic managers' focus on short-term financial reporting reduces the effectiveness of tax subsidies that incentivize innovation. We employ a novel setting, the issuance of Financial Interpretation No. 48 (FIN 48), which changed the financial reporting for some important, yet uncertain, tax incentives to innovate. For firms most affected by the standard change, we find evidence of reduced investment in innovation, reduced sensitivity of investment to tax incentives, and reduced future innovative output. Consistent with earnings myopia, we find the effect is more pronounced in firms with higher levels of transient institutional ownership and newly vesting equity compensation. These results indicate financial reporting myopia has real effects on innovation and can reduce tax policy effectiveness. The results further suggest that tax policymakers should consider both financial reporting and cash flow incentives in designing policy.

Tax enforcement and compliance are critical features of any tax system. One way that prior studies examine these topics is by measuring taxpayer responses to different types of letters from a tax authority. We extend this research by focusing on ‘remote firms’ – firms with no physical presence in the tax authority's jurisdiction – and examining sales tax compliance. Specifically, we partner with the Texas Comptroller's office to conduct a randomized field experiment that examines whether and why firms comply with remote tax authority. Using a sample of remote firms with a recent history of late filing, we find that tax authority correspondence increases the average reported sales tax base by 105 percent and tax payments by $3,711, although the effects are short-lived. Our evidence suggests that the effect is driven by increased salience of firms' tax obligations. Our study offers key insights given the growth in cross-border transactions and remote taxation.

The effects of tax rate changes on corporate profitability are not fully understood. Implicit tax theory predicts a positive relation between country-level tax rates and firm-level pretax returns. Conversely, income shifting should make reported pretax returns inversely related to tax rates. Among single-country European firms, we find robust evidence of corporate implicit taxes following tax rate changes, concentrated in firms that rely less on intangible assets and firms in closed economies (non-EU countries). Among multinational firm affiliates, we find the effects of income shifting outweigh the effects of implicit taxes for firms with high intangibles and in countries with open borders. Our results imply income shifting estimated using only reported profits is less biased by implicit taxes in settings with open economies and firms with unique inputs or products. Our evidence also helps explain prior evidence of decreasing corporate implicit tax effects over time, particularly for multinationals.

We study how public and private disclosure requirements interact to influence both tax regulator enforcement and firm disclosure. To capture IRS enforcement activities, we introduce a novel data set of IRS acquisition of firms’ public financial disclosures, which we label IRS attention. We examine the implementation of two new disclosure requirements that potentially alter IRS attention: FIN 48, which increased public tax disclosure requirements, and Schedule UTP, which increased private tax disclosure. We find that IRS attention increased following FIN 48 but subsequently decreased following Schedule UTP, consistent with public and private disclosure interacting to influence tax enforcement. We next examine how private tax disclosure requirements under Schedule UTP affected firms’ public disclosure responses. We find that, following Schedule UTP, firms significantly increased the quantity and altered the content of their tax-related disclosures, consistent with lower tax-related proprietary costs of disclosure. Our results suggest that changes in SEC disclosure requirements altered the IRS's behavior with regard to public information acquisition, and, relatedly, changes in IRS private disclosure requirements appear to change firms’ public disclosure behavior.

Governments regularly offer non‐income tax relief to attract business investment. However, it is unclear whether or how markets impound information about the relief into security prices. We use novel data from retrospective public records to examine the information content of non‐income tax relief. We predict and find that the receipt and magnitude of this relief are both strongly associated with recipients' future accounting performance and future abnormal returns. We further find that abnormal returns associated with the relief cluster around future earnings information events. In combination, this evidence suggests that non‐income tax relief is value‐relevant but is incorporated into prices over time.

This study examines the relation between exposure to social tax discontent—public expressions of frustration about others’ tax avoidance on social media—and individual tax avoidance. Economic and psychological theories predict bidirectional effects: discontent may reduce avoidance by inducing internal sanctions (e.g., shame and guilt) or increase avoidance by normalizing noncompliance through perceived prevalence. Using a novel, large-scale measure of tax discontent derived from geolocated Twitter data and a language classification model, we find that increases in social tax discontent are associated with reductions in estimated tax avoidance. The effect is stronger among high-income groups, in response to tweets targeting wealthy individuals, and in areas with higher political engagement and social media activity. Our results reinforce the importance of taxpayers’ social and behavioral motivations and suggest that jurisdictions’ efforts to manage taxpayer beliefs and leverage social norms can act as a complementary tool to traditional enforcement. Data Availability: The data used in this study are derived from public and third-party sources described in the text: the IRS Statistics of Income, the U.S. Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages, the Bureau of Economic Analysis, Google Trends, and the National Neighborhood Data Archive. Twitter/X data were collected via the Twitter Application Programming Interface (API) under its academic-access terms and are subject to Twitter’s/X’s terms of use; they cannot be redistributed by the authors, but the collection and classification procedures are described in Section IV.