ABSTRACT :: A leading law professor wrote a quarter-century ago that deferral of gain “is not as serious as outright exemption, but it is the next best thing.” Few tax law academics would disagree. But how important is tax deferral in the real world, particularly with respect to the Fortune 500 companies and other publicly held corporations, on which I focus and refer to as “Corporate America”? In this Article, I propose that tax exemption and tax deferral are worlds apart. Tax law views tax deferral as a significant benefit for a corporation. Even if tax rates remain constant over time, there is a time value of money benefit in deferring the payment of taxes. But in an accounting analysis, tax deferral appears, on many occasions, to confer only minor benefits. Exclusions (and deductions that are equivalent to exclusions, such as the manufacturing deduction) create the “permanent differences” that are a much greater benefit to Corporate America. Permanent differences can increase a corporation’s net income and therefore its earnings per share-factors that buoy a stock’s price-while at the same time reducing a corporation’s effective tax rate. In contrast, tax deferral items, which produce temporary differences for financial accounting purposes, do not immediately increase a corporation’s net income or its EPS, and also do not reduce a corporation’s effective tax rate. The primary benefit of temporary differences, which may not be applicable in all cases, is to temporarily increase a corporation’s cash flow-a feature that while certainly not unimportant, is not seen as significant a benefit to corporate management as increasing the corporation’s net income or EPS.