We consider the short-run responses of businesses and their owners to the introduction of Section 199A, a deduction implemented in 2018 that reduced the effective tax rate on pass-through business income. We study the deduction using several datasets derived from de-identified tax records of...

Using a novel empirical approach and newly available administrative data on US tax filings, we estimate the corporate elasticity of taxable income and determine how such tax responsiveness varies depending on accounting method, firm size, and interest rate. In response to a 10 percent increase...