The U.S. Ramp;D credit has always been incremental in nature, providing a credit for qualified Ramp;D expenses exceeding some base amount. Originally, the base amount was the average of the previous three years' Ramp;D expenses (i.e., a moving average). After heavy criticism that the credit's...

This study examines whether firms' advantage from lower explicit taxes (tax management) is mitigated by lower pre-tax incomes (implicit taxes) and whether this advantage creates sustainable competitive advantage. We investigate a sample of firms with low explicit tax rates prior to the enactment...

This study examines the availability and incentive effects of the Research and Experimentation tax credit following structural changes in the computation of the credit enacted in the Omnibus Budget Reconciliation Act of 1989 (OBRA89). We find that overall firm eligibility declined after OBRA89,...

As a direct response to the recent trend in corporate expatriations, politicians have questioned the patriotism of firms that reorganize outside the U.S. and introduced numerous legislative proposals designed to prevent corporate expatriations. The implicit assumption made in proposing this...