Globalisation and the mix of wage and profit taxes
Working paper
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http://hdl.handle.net/11250/162688Utgivelsesdato
2006-02Metadata
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Sammendrag
This paper analyses the development of the ratio of corporate taxes to wage
taxes using a simple political economy model with internationally mobile and
immobile firms. Among other results, our model predicts that countries reduce
their corporate tax rate, relative to the wage tax, either when preferences for
public goods increase or when a rising share of capital is employed in multinational
firms. The predicted relationships are tested using panel data for 23 OECD
countries for the period 1980 through 2001. The results of the empirical analysis support our central hypotheses.
Utgiver
Norwegian School of Economics and Business Administration. Department of EconomicsSerie
Discussion paper2006:18