Business Commons^™

2017 Tax Cuts And Corporate Investment And Financing Decisions: An Empirical Investigation, Rakesh Duggal

Southern University College of Business E-Journal

The Tax Cuts and Jobs Act of 1917 (TCJA) amended the Internal Revenue Code of 1986 and significantly lowered the corporate tax rate, in addition to providing other tax incentives to spur corporate investments. The TCJA has the potential to impact corporate cash flows and corporate investment and financing decisions. In response to the TCJA, firms could enhance their capital expenditure budgets, return excess capital to shareholders, and/or hold excess capital for better opportunities in the future. Using S&P 500 firms as a sample, this study finds no statistical difference in the actual corporate taxes paid in the post-and pre-TCJA …