Multinational Tax Incentives and Offshored U.S. Jobs

Williams, Braden

doi:10.2308/accr-52008

Cited by 47 publications

(11 citation statements)

References 69 publications

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“…Political and legal characteristics capture the strength of a country's government. We focus on general governance as measured by the six governance proxies from the World Bank's Worldwide Governance Indicators project (Akins et al, 2017;Andries et al, 2017;Beck et al, 2014;Langenmayr & Lester, 2018;Williams, 2018). 58 These proxies cover the following: voice and accountability (i.e., the ability of citizens to participate in choosing the government), political 57 For example, in Germany, the average duration of appeal proceedings at the level of the Federal Fiscal Court in 2018 was 20 months.…”

Section: Comparison With Other Country Characteristicsmentioning

confidence: 99%

The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity

Hoppe

Schanz²,

Sturm³

et al. 2021

European Accounting Review

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This paper introduces the Tax Complexity Index (TCI). The TCI comprehensively measures the complexity of countries' corporate income tax systems faced by multinational corporations. It builds on surveys of highly experienced tax consultants of the largest international tax services networks. The TCI is composed of a tax code subindex covering tax regulations and a tax framework subindex covering tax processes and features. For a sample of 100 countries, we find that tax complexity varies considerably across countries, and tax code and framework complexity also vary within countries. Among others, tax complexity is strongly driven by the complexity of transfer pricing regulations in the tax code and tax audits in the tax framework. When analyzing the associations with other country characteristics, we identify different patterns. For example, we find a positive association of GDP with tax code complexity and a negative association with tax framework complexity, suggesting that highly economically developed countries tend to have more complex tax codes and less complex frameworks. Overall, the tax complexity measures can serve as valuable proxies in future research and supportive tools for a variety of firm decisions and national and international tax policy discussions.

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Section: Comparison With Other Country Characteristicsmentioning

confidence: 99%

The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity

Hoppe

Schanz²,

Sturm³

et al. 2021

European Accounting Review

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“…Graham et al (2014) make a similar argument about this selection issue.13 Williams (2018) finds evidence that tax incentives leads to job offshoring. Thus, employees may respond negatively to tax news because tax news imply job offshoring and domestic job loss.…”

mentioning

confidence: 89%

The Effects of Tax Avoidance News on Employee Perceptions of Managers and Firms: Evidence from Glassdoor.com Ratings

Lee

Shevlin

et al. 2020

SSRN Journal

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We examine whether employee perceptions of managers and firms fall following tax avoidance news. Using S&P 500 firms and generalized difference-indifferences specifications, we find that tax avoidance news negatively affects employee perceptions of managers and firms. In cross-sectional tests, we find that (1) firms and managers in consumerfacing industries suffer larger employee-related perception changes from tax avoidance news compared to other firms, and (2) well-performing firms and their managers face smaller perception changes than other firms and managers. Overall, our results are consistent with tax avoidance news negatively affecting employee perceptions of managers and firms.

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“…less tax aggressiveness). For example, Williams (2018) shows that tax savings are a significant consideration in firms' job offshoring decisions. Because employees are less likely to support offshoring, it could be this preference that leads us to observe lower tax aggressiveness.…”

Section: Consistent With Arguments Articulated Inmentioning

confidence: 99%

“…As with the definition of tax aggressiveness, earnings management also covers a continuum ranging from decisions that comply with generally accepted accounting principles to financial statement fraud (Frank et al, 2009). addition, Williams (2018) suggests that job offshoring decisions are driven in part by incentives to reduce corporate income taxes. Finally, earnings management and tax aggressiveness can increase information asymmetry and negatively impact employees' ability to monitor the firm (Jensen, 2005;Desai & Dharmapala, 2006, 2009bETUI, 2018).…”

Section: Introductionmentioning

confidence: 99%

Codetermination and Aggressive Reporting: Audit Committee Employee Representation, Tax Aggressiveness, and Earnings Management.

Romney¹

2020

Preprint

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This study uses a unique dataset from listed German companies that helps identify a granular measure of board-level codetermination to examine whether board-level codetermination (inclusion of employee representatives on the board) reduces aggressive financial and tax reporting, i.e. tax aggressiveness and earnings management. To the extent codetermination allows for effective employee monitoring of management, then it should be negatively associated with tax and financial reporting aggressiveness because prior research hypothesizes that employees prefer lower tax aggressiveness and less earnings management. Our analysis also highlights the mechanisms through which employees can monitor and influence firms' decisions and outcomes. We find that employee representation on audit committees is the most consistently influential codetermination mechanism associated with reduced tax aggressiveness and earnings management. We contribute to prior and current discussions of stronger employee rights and influences on management decisions from a board-level perspective.

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Multinational Tax Incentives and Offshored U.S. Jobs

Cited by 47 publications

References 69 publications

The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity

The Tax Complexity Index – A Survey-Based Country Measure of Tax Code and Framework Complexity

The Effects of Tax Avoidance News on Employee Perceptions of Managers and Firms: Evidence from Glassdoor.com Ratings

Codetermination and Aggressive Reporting: Audit Committee Employee Representation, Tax Aggressiveness, and Earnings Management.

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