TY - JOUR AU - Hanlon, Michelle AU - Hoopes, Jeffrey L AU - Slemrod, Joel TI - Tax Reform Made Me Do It! JF - National Bureau of Economic Research Working Paper Series VL - No. 25283 PY - 2018 Y2 - November 2018 DO - 10.3386/w25283 UR - http://www.nber.org/papers/w25283 L1 - http://www.nber.org/papers/w25283.pdf N1 - Author contact info: Michelle Hanlon Sloan School of Management Massachusetts Institute of Technology E62-668, 100 Main Street Cambridge, MA 02142 E-Mail: mhanlon@mit.edu Jeffrey L. Hoopes Kenan-Flagler Business School University of North Carolina 300 Kenan Center Drive Chapel Hill, NC 27599 E-Mail: hoopes@unc.edu Joel Slemrod University of Michigan 701 Tappan Street Room R5396 Ann Arbor, MI 48109-1234 Tel: 734/936-3914 Fax: 734-615-4323 E-Mail: jslemrod@umich.edu M1 - published as Michelle Hanlon, Jeffrey L. Hoopes, Joel Slemrod. "Tax Reform Made Me Do It!," in Robert A. Moffitt, editor, "Tax Policy and the Economy, Volume 33" University of Chicago Press (2019) M3 - presented at "Tax Policy and the Economy", September 27, 2018 AB - This paper examines corporations’ actions, and statements about actions, following the tax law change known as the Tax Cuts and Jobs Act (TCJA). Specifically, we examine four different outcomes—bonuses (or other actions that benefit workers), announcements of new investments, share repurchases, and dividend announcements. We find that 4% of public firms in our sample announced in Q1 2018 they would pay some portion of their tax savings toward workers. In terms of investment, we find that 22% of the S&P 500 firms in our sample mentioned in earnings conference calls that they would increase investment because of the TCJA. We find a general increase in share repurchases following the passage of the TCJA, but the increase is extremely concentrated in a small number of firms. We find only nine firms that announced a new share repurchase plan explicitly attributed the new plan to the TCJA. In regression analysis, we find that both political and economic variables explain TCJA-linked announcements. The analysis suggests that firms with greater expected tax savings from the TCJA are those most likely to announce payments to workers and plans to increase investment. Firms with a Political Action Committee that donates more to Republican candidates are also more likely to announce benefits to employees. ER -