Journal of Accounting Research Vol. 41 No. 1 2003
The Impact of the 1986 Tax Reform Act on Income Shifting from Corporate to Shareholder Tax Bases: Evidence from the Motor Carrier Industry
Abstract
Using a sample of privately held C corporations and S corporations from the motor carrier industry during 1984–92, we assess the effect of the 1986 Tax Reform Act on the amount of corporate income shareholders of privately held C corporations shifted to their personal tax bases. We estimate that the C corporations shifted a mean of $130,587 taxable income each year to shareholders (representing 29% of their mean accounting earnings before income shifting) after the 1986 tax law change. The C corporations used deductible managerial compensation and rent expense, but not interest expense, to shift income to shareholders.
- DOI
- 10.1111/1475-679x.00096
- Volume
- 41
- Issue
- 1
- Pages
- 65-88
- Language
- en
- Sources
- crossref openalex bibtex:phds-export.bib