ABSTRACT: This study investigates the effect of KPMG's Deferred Prosecution Agreement (DPA) on the accounting firm's ability to sell auditor-provided tax services (APTS) and its clients' tax avoidance. We document that following the DPA, clients were more likely to discontinue or reduce purchasing APTS from KPMG relative to the other Big 4 accounting firms. However, we do not find any evidence of a change in tax avoidance among KPMG clients continuing to purchase APTS following the DPA relative to other Big 4 clients. Broadly, our findings highlight how elevated reporting standards and external monitoring impose significant negative economic consequences on the service providers subject to these sanctions. At the same time, it appears clients do not suffer any observable tax costs by continuing to engage a sanctioned tax service provider.
{"title":"The Economic Consequences of Tax Service Provider Sanctions: Evidence from KPMG's Deferred Prosecution Agreement","authors":"Andrew R. Finley, James Stekelberg","doi":"10.2308/ATAX-51272","DOIUrl":"https://doi.org/10.2308/ATAX-51272","url":null,"abstract":"ABSTRACT: This study investigates the effect of KPMG's Deferred Prosecution Agreement (DPA) on the accounting firm's ability to sell auditor-provided tax services (APTS) and its clients' tax avoidance. We document that following the DPA, clients were more likely to discontinue or reduce purchasing APTS from KPMG relative to the other Big 4 accounting firms. However, we do not find any evidence of a change in tax avoidance among KPMG clients continuing to purchase APTS following the DPA relative to other Big 4 clients. Broadly, our findings highlight how elevated reporting standards and external monitoring impose significant negative economic consequences on the service providers subject to these sanctions. At the same time, it appears clients do not suffer any observable tax costs by continuing to engage a sanctioned tax service provider.","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2016-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT 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 t...
{"title":"Retroactive Tax Legislation, Reported Earnings, and Investors' Responses to Earnings “Surprises”: Evidence from R&D Credit Extensions","authors":"B. Bratten, David S. Hulse","doi":"10.2308/ATAX-51395","DOIUrl":"https://doi.org/10.2308/ATAX-51395","url":null,"abstract":"ABSTRACT 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 t...","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957901","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
B rink and White (2015) examine individual tax compliance and whether (1) a shared interest in the consequences of evasion, and (2) regret salience of a potential adverse audit influence tax compliance decisions. Given the vast amount of potential revenue lost each year due to taxpayer noncompliance, understanding the root causes of tax compliance decisions has important practical implications. Extant research on individual tax compliance has examined both economic factors (Allingham and Sandmo 1972), as well as non-economic factors such as ethical decision-making (Alm and Torgler 2011). However, previous research has not examined the effects of a shared interest in the consequences of a tax compliance decision, nor the influence of a shared interest under differing degrees of regret salience. To investigate the influence of a shared interest and regret salience on tax compliance decisions, Brink and White (2015) conduct an experiment using 147 experienced taxpayers as participants. Participants are assigned to conditions with either the presence (partner in a partnership) or absence (sole proprietor) of a shared interest, and either the presence (regret frame) or absence (control frame) of heightened awareness of regret. Results indicate that tax compliance is more likely when a shared interest is presence, as well as when regret salience is primed; however, there is not a significant interaction between the presence/absence of a shared interest and regret salience. Supplemental analysis indicates that tax evasion is judged to be more unethical when a shared interest is present than when it is absent, and that the emotional costs of tax evasion are higher in the presence of a shared interest. Brink and White (2015) contribute to the tax compliance literature in several important ways. Specifically, given the prevalence of a shared interest in the consequences of tax evasion (such as through partnerships and S corporations), surprisingly little is known about how the presence of a shared interest may influence tax compliance decisions. This study provides an excellent first step in
B rink和White(2015)研究了个人税务合规性，以及(1)对逃税后果的共同利益，以及(2)对潜在不利审计影响税务合规决策的遗憾突出性。鉴于每年由于纳税人不合规而造成的巨额潜在收入损失，了解税务合规决策的根本原因具有重要的实际意义。现有的关于个人纳税合规性的研究既考察了经济因素(Allingham and Sandmo 1972)，也考察了非经济因素，如道德决策(Alm and Torgler 2011)。然而，之前的研究并没有考察共同利益对税务合规决策后果的影响，也没有考察共同利益在不同程度的遗憾突出下的影响。为了调查共同利益和遗憾突出对税务合规决策的影响，Brink和White(2015)进行了一项实验，使用147名经验丰富的纳税人作为参与者。参与者被分配到两种情况，一种是存在(合伙企业的合伙人)，另一种是不存在(独资经营者)共同利益，另一种是存在(后悔框架)或不存在(控制框架)对后悔的高度意识。结果表明，当共同利益存在时，以及当后悔显著性启动时，纳税遵从的可能性更大;然而，在共同兴趣的存在/缺失与遗憾显著性之间没有显著的相互作用。补充分析表明，当存在共同利益时，逃税被认为比没有共同利益时更不道德，并且在存在共同利益时，逃税的情感成本更高。Brink和White(2015)在几个重要方面为税收合规文献做出了贡献。具体来说，鉴于共同利益普遍存在于逃税的后果中(例如通过合伙企业和S公司)，令人惊讶的是，人们对共同利益的存在如何影响税务合规决策知之甚少。这项研究提供了一个很好的第一步
{"title":"The Effects of a Shared Interest and Regret Salience on Tax Evasion","authors":"Amy M. Hageman","doi":"10.2308/ATAX-10478","DOIUrl":"https://doi.org/10.2308/ATAX-10478","url":null,"abstract":"B rink and White (2015) examine individual tax compliance and whether (1) a shared interest in the consequences of evasion, and (2) regret salience of a potential adverse audit influence tax compliance decisions. Given the vast amount of potential revenue lost each year due to taxpayer noncompliance, understanding the root causes of tax compliance decisions has important practical implications. Extant research on individual tax compliance has examined both economic factors (Allingham and Sandmo 1972), as well as non-economic factors such as ethical decision-making (Alm and Torgler 2011). However, previous research has not examined the effects of a shared interest in the consequences of a tax compliance decision, nor the influence of a shared interest under differing degrees of regret salience. To investigate the influence of a shared interest and regret salience on tax compliance decisions, Brink and White (2015) conduct an experiment using 147 experienced taxpayers as participants. Participants are assigned to conditions with either the presence (partner in a partnership) or absence (sole proprietor) of a shared interest, and either the presence (regret frame) or absence (control frame) of heightened awareness of regret. Results indicate that tax compliance is more likely when a shared interest is presence, as well as when regret salience is primed; however, there is not a significant interaction between the presence/absence of a shared interest and regret salience. Supplemental analysis indicates that tax evasion is judged to be more unethical when a shared interest is present than when it is absent, and that the emotional costs of tax evasion are higher in the presence of a shared interest. Brink and White (2015) contribute to the tax compliance literature in several important ways. Specifically, given the prevalence of a shared interest in the consequences of tax evasion (such as through partnerships and S corporations), surprisingly little is known about how the presence of a shared interest may influence tax compliance decisions. This study provides an excellent first step in","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68956001","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT: This study investigates whether the smoothness of estimated taxable income influences its value relevance. Contrary to research that finds that smoothness enhances the value relevance of book income, we find that smoothness reduces the value relevance of taxable income. We decompose the smoothness of taxable income into its innate and discretionary components and find that innate smoothness is not associated with the value relevance of taxable income. However, we find that discretionary smoothness is associated with a reduction in taxable income's value relevance, suggesting that discretionary smoothness either eliminates or reduces the information contained in taxable income. In additional analysis, we find that discretionary smoothness is also associated with higher levels of future tax avoidance, consistent with managers smoothing taxable income as part of their tax avoidance strategy. In combination, our results suggest that the reduced value relevance of estimated taxable income is a byprod...
{"title":"Smoothness and the Value Relevance of Taxable Income","authors":"Michael A. Mayberry, Sean McGuire, Thomas C. Omer","doi":"10.2308/ATAX-51252","DOIUrl":"https://doi.org/10.2308/ATAX-51252","url":null,"abstract":"ABSTRACT: This study investigates whether the smoothness of estimated taxable income influences its value relevance. Contrary to research that finds that smoothness enhances the value relevance of book income, we find that smoothness reduces the value relevance of taxable income. We decompose the smoothness of taxable income into its innate and discretionary components and find that innate smoothness is not associated with the value relevance of taxable income. However, we find that discretionary smoothness is associated with a reduction in taxable income's value relevance, suggesting that discretionary smoothness either eliminates or reduces the information contained in taxable income. In additional analysis, we find that discretionary smoothness is also associated with higher levels of future tax avoidance, consistent with managers smoothing taxable income as part of their tax avoidance strategy. In combination, our results suggest that the reduced value relevance of estimated taxable income is a byprod...","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT: This study examines the impact that switching to a single sales factor (SSF) formula for state corporate income tax apportionment has on local employment. Resolving previous conflicting work, I find that SSF increased employment only for locally based firms, resulting in economically insignificant aggregate employment gains. Beyond contributing to the policy debate, the study also introduces a new database that provides location-specific, establishment-level information for both public and privately owned firms.
{"title":"The Cash Flow and Behavioral Effects of Switching to a Single Sales Factor on State Taxation","authors":"Charles W. Swenson","doi":"10.2308/ATAX-51203","DOIUrl":"https://doi.org/10.2308/ATAX-51203","url":null,"abstract":"ABSTRACT: This study examines the impact that switching to a single sales factor (SSF) formula for state corporate income tax apportionment has on local employment. Resolving previous conflicting work, I find that SSF increased employment only for locally based firms, resulting in economically insignificant aggregate employment gains. Beyond contributing to the policy debate, the study also introduces a new database that provides location-specific, establishment-level information for both public and privately owned firms.","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957367","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT: This study examines whether sharing the potential tax savings and the risk of penalties associated with tax evasion with another individual affects a decision maker's willingness to evade taxes. This study also explores whether increasing the salience of potential regret from an adverse audit decreases tax evasion behavior. Using a 2 × 2 experimental design with experienced taxpayers as participants, this study finds that participants are less willing to evade taxes when they share the potential tax savings and risk of penalties with another taxpayer compared to when the reporting decision affects solely the decision maker. Supplemental analysis shows that participants feel that tax evasion is more unethical when a shared interest is present. In addition, this study demonstrates that increasing regret salience from an adverse audit decreases participants' willingness to evade taxes. This study contributes to multiple literature streams, including taxpayer compliance, ethical decision making, and...
{"title":"The Effects of a Shared Interest and Regret Salience on Tax Evasion","authors":"William D. Brink, R. White","doi":"10.2308/ATAX-51196","DOIUrl":"https://doi.org/10.2308/ATAX-51196","url":null,"abstract":"ABSTRACT: This study examines whether sharing the potential tax savings and the risk of penalties associated with tax evasion with another individual affects a decision maker's willingness to evade taxes. This study also explores whether increasing the salience of potential regret from an adverse audit decreases tax evasion behavior. Using a 2 × 2 experimental design with experienced taxpayers as participants, this study finds that participants are less willing to evade taxes when they share the potential tax savings and risk of penalties with another taxpayer compared to when the reporting decision affects solely the decision maker. Supplemental analysis shows that participants feel that tax evasion is more unethical when a shared interest is present. In addition, this study demonstrates that increasing regret salience from an adverse audit decreases participants' willingness to evade taxes. This study contributes to multiple literature streams, including taxpayer compliance, ethical decision making, and...","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT: This study examines the relation between commercial and industrial property values and local property taxes using 1999 to 2009 data for the state of Georgia. Results show a negative relation between commercial values and property taxes, consistent with the new view of capital tax prediction that these taxes are borne, at least in part, by property owners. Incidence estimates show very high to full capitalization. There is little evidence of a relation between industrial property values and property taxes, contrary to prior research. This study is the first to provide empirical evidence of differences in commercial and industrial property tax incidence. The study contributes to the understanding of the capitalization of business taxes, which has been the subject of very little prior research. The results can inform policymakers who consider trade-offs in tax revenue needs, economic development, and issues of fairness in their localities.
{"title":"The Relation between Business Property Values and Local Property Taxes","authors":"K. Key, Teresa A. Lightner","doi":"10.2308/ATAX-50951","DOIUrl":"https://doi.org/10.2308/ATAX-50951","url":null,"abstract":"ABSTRACT: This study examines the relation between commercial and industrial property values and local property taxes using 1999 to 2009 data for the state of Georgia. Results show a negative relation between commercial values and property taxes, consistent with the new view of capital tax prediction that these taxes are borne, at least in part, by property owners. Incidence estimates show very high to full capitalization. There is little evidence of a relation between industrial property values and property taxes, contrary to prior research. This study is the first to provide empirical evidence of differences in commercial and industrial property tax incidence. The study contributes to the understanding of the capitalization of business taxes, which has been the subject of very little prior research. The results can inform policymakers who consider trade-offs in tax revenue needs, economic development, and issues of fairness in their localities.","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957109","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT: This study examines how protest format and use of an agent affect the magnitude of the adjustments obtained in property tax appeals. The sample includes all single-family residential properties in Harris County, Texas for which a property tax protest was filed in 2010 or 2011 (n = 290,022). A protest can be settled in one of three formats: electronically (only when an agent is not used), an informal hearing, or a formal hearing. Because an owner's decision to use an agent is voluntary, I use a two-stage estimation process to help control for potential selection bias. The first-stage probit model is used to generate the predicted probability that an owner will use an agent, while the second-stage Tobit regression models the appeals adjustment as a function of protest format, agent use, control variables, and the selection-bias variable. Empirical results show that when an owner does not use an agent, appeals adjustments for electronic settlements are smaller than for informal settlements, and ap...
{"title":"The Effects of Protest Format and Agent Use on Residential Appeals Adjustments","authors":"Elizabeth Plummer","doi":"10.2308/ATAX-50990","DOIUrl":"https://doi.org/10.2308/ATAX-50990","url":null,"abstract":"ABSTRACT: This study examines how protest format and use of an agent affect the magnitude of the adjustments obtained in property tax appeals. The sample includes all single-family residential properties in Harris County, Texas for which a property tax protest was filed in 2010 or 2011 (n = 290,022). A protest can be settled in one of three formats: electronically (only when an agent is not used), an informal hearing, or a formal hearing. Because an owner's decision to use an agent is voluntary, I use a two-stage estimation process to help control for potential selection bias. The first-stage probit model is used to generate the predicted probability that an owner will use an agent, while the second-stage Tobit regression models the appeals adjustment as a function of protest format, agent use, control variables, and the selection-bias variable. Empirical results show that when an owner does not use an agent, appeals adjustments for electronic settlements are smaller than for informal settlements, and ap...","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957694","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Andrew R. Finley, Stephen J. Lusch, Kirsten A. Cook
ABSTRACT: We examine the influence of the Alternative Simplified Credit (ASC) on firms' research and development (R&D) spending. The ASC remedies a perceived flaw with the previous R&D tax credit regime that excluded firms with high R&D intensities during their fixed-base periods and/or high sales in the previous four years from claiming a credit. We document a large increase in R&D tax credit eligibility following the enactment of the ASC, and find that its effect on R&D spending was positive relative to firms not utilizing this new credit-calculation option. Specifically, we estimate that the ASC induced an additional $2.26 of R&D spending for every dollar of forgone tax revenue. These results provide evidence that the ASC has spurred R&D investment in a setting where firms have a choice between two credit-calculation methods. JEL Classifications: H25, H32, O31
{"title":"The Effectiveness of the R&D Tax Credit: Evidence from the Alternative Simplified Credit","authors":"Andrew R. Finley, Stephen J. Lusch, Kirsten A. Cook","doi":"10.2308/ATAX-50964","DOIUrl":"https://doi.org/10.2308/ATAX-50964","url":null,"abstract":"ABSTRACT: We examine the influence of the Alternative Simplified Credit (ASC) on firms' research and development (R&D) spending. The ASC remedies a perceived flaw with the previous R&D tax credit regime that excluded firms with high R&D intensities during their fixed-base periods and/or high sales in the previous four years from claiming a credit. We document a large increase in R&D tax credit eligibility following the enactment of the ASC, and find that its effect on R&D spending was positive relative to firms not utilizing this new credit-calculation option. Specifically, we estimate that the ASC induced an additional $2.26 of R&D spending for every dollar of forgone tax revenue. These results provide evidence that the ASC has spurred R&D investment in a setting where firms have a choice between two credit-calculation methods. JEL Classifications: H25, H32, O31","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT: How do taxpayers respond cognitively to add-on sales taxes versus all-inclusive excise taxes? If structural variations produce cognitive differences, then do the differences affect buying behavior? These are important questions because consumer spending drives the U.S. economy and directly determines the amount of tax revenues collected from consumption taxes. If the negative opinion that people have about taxes (Tax Foundation 2009) increases the saliency of the tax, then an add-on sales tax might decrease consumer spending more than an all-inclusive excise tax pricing structure. Instead, results suggest that demand is higher when the add-on component is a sales tax as compared to an excise tax that is embedded into the total price. The effects on demand are even more pronounced and people recall lower prices when the add-on sales tax is presented as a percentage of the base price—as is generally the case in the U.S.—rather than as an additional currency component. Data Availability: Contact th...
摘要:纳税人对附加销售税和全包消费税的认知反应如何?如果结构差异产生认知差异，那么这种差异会影响购买行为吗?这些都是重要的问题，因为消费者支出推动着美国经济，并直接决定着从消费税中征收的税收数额。如果人们对税收的负面看法(Tax Foundation 2009)增加了税收的显著性，那么附加销售税可能比全包消费税定价结构更能减少消费者支出。相反，结果表明，当附加部分是销售税时，与嵌入总价格的消费税相比，需求更高。对需求的影响更加明显，当附加销售税以基本价格的百分比呈现时(通常是美国的情况)，而不是作为额外的货币组成部分，人们会想起更低的价格。数据可用性:联系…
{"title":"Cognitive Responses to Partitioned Pricing of Consumption Taxes: Consequences for State and Local Tax Revenues","authors":"Cynthia Blanthorne, Michael L. Roberts","doi":"10.2308/ATAX-50953","DOIUrl":"https://doi.org/10.2308/ATAX-50953","url":null,"abstract":"ABSTRACT: How do taxpayers respond cognitively to add-on sales taxes versus all-inclusive excise taxes? If structural variations produce cognitive differences, then do the differences affect buying behavior? These are important questions because consumer spending drives the U.S. economy and directly determines the amount of tax revenues collected from consumption taxes. If the negative opinion that people have about taxes (Tax Foundation 2009) increases the saliency of the tax, then an add-on sales tax might decrease consumer spending more than an all-inclusive excise tax pricing structure. Instead, results suggest that demand is higher when the add-on component is a sales tax as compared to an excise tax that is embedded into the total price. The effects on demand are even more pronounced and people recall lower prices when the add-on sales tax is presented as a percentage of the base price—as is generally the case in the U.S.—rather than as an additional currency component. Data Availability: Contact th...","PeriodicalId":45477,"journal":{"name":"Journal of the American Taxation Association","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2015-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68957667","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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