The corporate income tax is treated as an important aspect when a government designs social systems to pursue its own goal for the national economy. In line with this notion, the corporate income tax rates have been recently adjusted both in U.S. and Korea after the new government was launched. The U.S. government expects that relieving corporate income tax would increase corporate investments, leading to the positive consequence to the national economy. On the contrary, Korean government believes that the corporate income tax burden lightened over the past several decades has not stimulated the economy, rather it has deteriorated the status of public finance. Although the corporate tax savings have attracted such a great attention, there has been scarce evidence on how firms spend the saved tax. This dissertation aims to answer this important but unexplored question, using Korean sample as well as the U.S. sample. With the 48,971 firm-year observations from 1991 to 2015 in U.S., I find that firms, on average, are more likely to utilize the tax savings for investments rather than to stockpile them as cash. It is additionally found that firms with higher investment opportunities, financial constraints, cash flow volatility and industry competition are more likely to hold tax savings as cash than to invest them. I also discover that macroeconomic factors such as economic conditions and policy uncertainty influence how firms spend the tax savings. My findings are robust to the various sensitivity tests.