Abstract
This article attempts to explain the different levels of effective tax rates across firms and by means of quantile regression method, this article detect the variation in the sensitivity of firms’ effective tax rates (ETRs) to return on assets, capital intensity, inventory intensity, leverage and firm size across the major quantiles of the ETR distribution. The key empirical results show that not all large firms enjoy the political power even though the result of OLS satisfies the political power hypothesis. This paper also indicates who can get the maximum benefits from tax preferences. Key words: Effective tax rate (ETR), tax preference, political power hypothesis, political cost hypothesis.
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