| Description |
In December 2017 United States Congress signed into law the Tax Cuts and Jobs Act of 2017 (TCJA). The major elements of the federal income tax reform for corporations include (1) reducing the statutory tax rate to 21% from 35%; (2) changing to a territorial tax system from a global tax system; (3) implementing a one-time mandatory repatriation tax of 8% and 15.5% on foreign illiquid assets and cash and cash equivalents, respectively; and (4) eliminating the alternative minimum tax. This study analyzes the effects of the Tax Cuts and Jobs Act of 2017 on United States corporations by focusing on how the reform has impacted these firms directly through effective tax rates, a one-time tax on foreign earnings, and DTA revaluation; and indirectly through hiring practices, dividend disbursements, share buybacks, employee bonuses, and repatriation of foreign earnings. This analysis will assess the results of the reform during its first six months in effect by performing a year-over-year comparison of each company's 10-K from fiscal years 2016 and 2017, as well as cross comparing first and second quarter financial releases for the years 2016, 2017, and 2018. |
