A Firm-Level Evaluation of the Tax Cuts and Jobs Act.

This article examines the impact of the Tax Cuts and Jobs Act (TCJA) of 2017 on firm-level investment and capital structure policies. The study analyzes data from 534 firms and finds that while there were notable differences in capital expenditures, stock buybacks, and debt ratios between high-tax and low-tax firms following the tax policy change, the difference-in-differences analysis did not show statistically significant changes in capital expenditures or the debt ratio. However, there was a positive and significant effect for net stock buybacks. The study suggests that increased stock repurchases rather than new capital investment may have been the main outcome of the TCJA. The article acknowledges that the two-year timeframe may not capture the full impact of the legislation and provides robustness checks to support the findings. Overall, the study contributes to the existing literature on the limited impacts of corporate tax cuts and may be of interest to policymakers as many provisions of the TCJA are set to expire in 2025. [Extracted from the article]