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Market-Based Solutions to Vital Economic Issues
Research
Aug 29, 2019

Is Tax Planning Best Done In Private?

Abstract

We investigate tax planning by privately-held corporations. Privately-held firms are commonly believed to face lower costs of tax planning relative to publicly-held firms, and thus are believed to engage in greater tax planning. We use data from the Internal Revenue Service, allowing us to examine many tax planning measures for public and private firms. Contrary to conventional wisdom, we find no evidence that private corporations tax plan more relative to similar-sized public corporations in the same industry. Moreover, some evidence suggests that private corporations engage in less tax planning.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals.


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