Professor Michelle Hanlon, MIT Sloan School of Management
This paper investigates systematic changes in corporate effective tax rates over the past 25 years. We find that effective tax rates have decreased significantly. Contrary to conventional wisdom, we find that the decline in effective tax rates is not concentrated in multinational firms; effective tax rates have declined at approximately the same rate for both multinational and domestic firms. Moreover, we find that within multinational firms, both foreign and domestic effective rates have decreased. Finally, we find that changes in firm characteristics and declining foreign statutory tax rates explain little of the overall decrease in effective rates. The findings have broad implications for tax research, as well as for current policy debates about reforming the corporate income tax.
Michelle Hanlon is the Howard W. Johnson Professor at the MIT Sloan School of Management. She earned her doctorate degree at the University of Washington. Prior to joining MIT, she was a faculty member at the University of Michigan. Professor Hanlon has taught financial accounting to undergraduates, MBA students, Executive MBA students, and Masters of Finance students. Professor Hanlon also teaches taxes and business strategy to MBA students. She is the winner of the 2013 Jamieson Prize for Excellence in Teaching at MIT Sloan.
Professor Hanlon’s research focuses primarily on the intersection of taxation and financial accounting. Her recent work examines the capital market effects of the accounting for income tax, the reputational effects of corporate tax avoidance, and the economic consequences of US international tax policies for multinational corporations. She has published research studies in the Journal of Accounting and Economics, the Journal of Accounting Research, The Accounting Review, the Review of Accounting Studies, the Journal of Finance, the Journal of Financial Economics, the Journal of Public Economics, and others. She has won several awards for her research and has presented her work at numerous universities and conferences. Professor Hanlon has served on several editorial boards and currently serves as an editor at the Journal of Accounting and Economics.
Professor Hanlon is a co-author of two textbooks: Financial Accounting and Taxes & Business Strategy. She has testified in front of the US Senate Committee on Finance and the US House of Representatives Committee on Ways and Means about the interaction of financial accounting and tax policy. She served as a US delegate to the American-Swiss Young Leaders Conference in 2010 and worked as an Academic Fellow at the US House Ways and Means Committee in 2015.