Higher corporate taxes are often argued to depress wages (a tax incidence effect), while higher wages may require compensation via lower corporate tax rates (a fiscal compensation effect). Yet, existing empirical evidence ignores that i) both effects are likely to occur simultaneously...

While consumption taxes are a primary source of tax revenue and constitute a substantial cash outflow for firms, evidence on their effect on corporate tax planning is very limited. This study examines multinational service firms' consumption tax planning behavior and its inter-play with...

Using a novel empirical approach and newly available administrative data on US tax filings, we estimate the corporate elasticity of taxable income and determine how such tax responsiveness varies depending on accounting method, firm size, and interest rate. In response to a 10 percent increase...

We use administrative data on the population of corporations to investigate the distortion of corporate taxes on private firms, which account for 99% of all corporations. In response to a 9% increase in corporate tax rates, firms decrease income by 8.9%--5.5% due to reporting differences (e.g.,...

We contribute to the empirical literature on the relationship between corporate taxes and investment. We exploit the introduction of the so-called ACE corporate tax reform in Belgium that came into effect in January 2006 to evaluate this relationship in a quasi-experimental setting based on...

We contribute to the empirical literature on the debt bias of corporate income taxation through a micro-econometric evaluation of the so-called ACE corporate tax reform in Belgium based on firm-level accounting data. We interpret the tax reform that came into effect in January 2006 as an...

Suárez Serrato and Zidar (2016) identify state corporate tax incidence in a spatial equilibrium model with imperfectly mobile firms. Their identification argument rests on comparative-statics omitting a channel implied by their model: the link between common determinants of a location’s...

Recent years have seen a sustained decline in the labor share around the world. This paper studies this trend by focusing on the effect of corporate income taxes on firm-level labor shares. From 2010 to 2013, the Chinese central government cut the corporate income tax rate in 21 cities for...

This paper examines the intertemporal effect of corporate income taxation on the investment behavior of a firm that faces imperfect capital markets. It shows that when capital markets are imperfect, the optimizing firm goes through different phases of growth. In this dynamic setting, the effect...

Excess taxation of capital gains is a by-product of inflation in a tax system that uses nominal values as its basis. Studies by Feldstein, Green and Sheshinsky [JPE 1978] and Feldstein and Slemrod [NBER WP 234, 1978] analyze related macroeconomic distortions associated with corporate stock...