The Elasticity of Corporate Taxable Income in Cities and Remote Locations
Drawing on panel variation across Swiss municipalities and cantons, we show that the elasticity of corporate taxable income is large in remote, non-central locations and zero in cities. In the full panel, we find that an increase in a jurisdiction’s corporate net-of-tax rate by 1% results in an increase in aggregate corporate income by around 3.5%. This effect becomes small and insignificant if we weight by initial tax base, which is large in cities, indicating that the overall tax base is inelastic. We explore margins of firms’ responsiveness, revenue effects and implications for regional policy
Year of publication: |
2022
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Authors: | Krapf, Matthias ; Staubli, David |
Publisher: |
[S.l.] : SSRN |
Saved in:
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