In 2025, at least 88 corporations paid zero income tax, according to the Institute on Taxation and Economic Policy. Why do some companies pay higher rates than others, and what drives some to pay less in taxes? Using data on more than 8,000 annual observations of publicly traded U.S. companies across two decades, they measured how much each factor explained differences in companies’ effective tax rates. “Policymakers who think there is too much tax avoidance need to understand the big drivers, then adjust the incentives being given.” “Explaining Corporate Tax Avoidance” is published in Management Science.