Do the Performance and Value of the Companies Influence Corporate Taxation? Empirical Study on Standard & Poor’s 500 Companies

The effective corporate tax rate represents an important tool which could help the management take the best financial decisions within the company. The paper analyzes whether the company performance and the company value influence the effective corporate tax rate, used as a proxy for the corporate taxation. The firm performance is represented by Return on Assets and Return on Equity, while the firm value is expressed as Tobin’s Q and Price-to-Book ratio. The sample consists of the non-financial companies included in the Standard & Poor’s 500 index, over the period 2014-2023. Based on the literature review, there are selected the most relevant factors that could impact the tax burden of the US companies, and the empirical results suggest that, to reduce the corporate taxation, it is necessary to increase the performance and the value of the company, and, furthermore, bigger and older firms register lower effective tax rates.