earticle

영어

Studies using the effective tax rates(ETR) to measure corporate tax (dis)advantage have played an important role in tax reform. However, recent studies have questioned the validity of the ETR for this purpose. In this study we extend the prior research in two ways. First, we assess the validity of the ETR as a measure of tax (dis)advantage. Second, we develop an alternative measure to the ETR. Empirical results indicate that the ETR is often unavailable, and when it is avaliable, it is not reliable as an indicator of differences in tax (dis)advantage. Further, the results show that a more direct measure of tax (dis)advantage, the tax subsidy on equity(TSE) measure, can be computed for almost all firm and is better able to identify firms that are more or less tax-advantaged.