We exploit a recent law change to examine the relation between corporate taxes and executive compensation. The “Tax Cuts and Jobs Act” (TCJA) lowered the corporate tax rate from 35 to 21 percent and repealed a long-standing exception that allowed companies to deduct executives' qualified...

As part of the Tax Cuts and Jobs Act (TCJA), the US Congress repealed a long-standing exception that allowed companies to deduct executives’ qualified performance-based compensation in excess of $1 million. The purpose of this study is to examine whether Congress achieved its stated objective...