This study examines the effect on capital expenditures of "bonus depreciation," which was intended to stimulate such spending by allowing businesses to immediately expense a portion of the cost of qualified capital expenditures from late 2001 through 2004. After controlling for many previously...

When Congress retroactively extends a temporary tax rule, the effect on earnings is complex because financial reporting standards require firms to apply the integral method using enacted tax law to determine quarterly income tax expense. We model this effect and examine earnings announcements...