Historically, the adoption of income taxes on businesses has led to companies favoring more aggressive financial reporting methods and reporting higher income.

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Historically, the adoption of income taxes on businesses has led to companies favoring more conservative financial reporting methods and reporting lower income. This is because higher reported income leads to higher tax liability, so companies may be incentivized to report lower income in order to reduce their tax burden.

Historically, the Adoption of Income Taxes on Businesses Has Led