The Tax Cuts & Jobs Act of 2017 (TCJA) placed limitations on the deductibility of interest for U.S. firms. Using a difference-in-differences design examining both affected and unaffected firms, we show that following the enactment of the new limitations, affected firms significantly decrease...

In this study, we examine managers' decision to report segment-level profit on a before-tax or after-tax basis. A consequence of defining segment-level profit on an after-tax basis internally is that segment-level tax expense must be disclosed in the financial statements. Consistent with the...

We examine the sensitivity of CEO compensation to pretax domestic and foreign incomes both before and after the Tax Cuts and Jobs Act of 2017 (TCJA). Our results show firms reward foreign over domestic earnings prior to the TCJA, when foreign income was tax advantaged relative to domestic...

I examine the association between CEOs’ after-tax incentives and their firms’ level of tax avoidance. Economic theory holds that firms should compensate CEOs on an after-tax basis when the expected tax savings generated from additional incentive alignment outweigh the incremental...

Recent accounting research provides evidence that similar profit-based compensation incentives are used in for-profit and nonprofit hospitals. Because charity care reduces profits, such incentives should lead for-profit hospital managers to reduce charity care levels. Nonprofit hospital...