This study examines stock returns around legislative events concerning the passage of, and subsequent increase in, the excise tax on overfunded pension plan reversions. Tests are conducted to determine (1) whether those events are associated with downward revaluations of firms sponsoring defined...

The 1986 Tax Reform Act (TRA-86) reduced regular tax rates effective for tax years beginning after 1986. Firms in the highest marginal tax bracket in 1986 had an increased incentive to defer taxable income from 1986 to later years. Scholes, Wilson and Wolfson (1992) found that firms shifted...