scholarly journals The Impact of Effective Corporate Tax Rates on Investment

2020 ◽  
Author(s):  
Thomas Goda ◽  
Sebastián Ballesteros
Keyword(s):  
Tax Rates ◽  
Corporate Tax ◽  
Corporate Tax Rates ◽  
The Impact

scholarly journals The Non-Linear Effect of Corporate Taxes on Economic Growth

2015 ◽  
Vol 8 (s1) ◽  
pp. 14-31 ◽  
Author(s):  
Ján Huňady ◽  
Marta Orviská
Keyword(s):  
Economic Growth ◽  
Linear Relationship ◽  
Fixed Effects ◽  
Negative Impact ◽  
Strong Support ◽  
Tax Rates ◽  
Corporate Tax ◽  
Non Linear ◽  
Corporate Tax Rates ◽  
The Impact

Abstract The paper deals with the problem of taxation and its potential impact on economic growth and presents some new empirical insights into this topic. The main aim of the paper is to verify an assumed nonlinear impact of corporate tax rates on economic growth. Based on the theory of public finance and taxation, we hypothesize that at relatively low tax rates it is possible that the impact of taxation on economic growth become slightly positive. On the other hand when the tax rates are higher a negative impact of taxation on economic growth could be expected. Despite the fact that the most of the existing studies find a negative linear relationship between these variables, we can also find strong support for a non-linear relationship from several theoretical models as well as some empirical studies. Based on panel data fixed-effects econometric models, we, as well, find empirical evidence for a non-linear relationship between nominal and effective corporate tax rates and economic growth. Our data consists of annual observations for the period 1999 to 2011 for EU Member States. Based on the results, we also estimated the optimal level of the corporate tax rate in terms of maximizing economic growth in the average of the EU countries.

scholarly journals The determinants of Italy’s corporate tax rates: an empirical investigation

2016 ◽  
Vol 5 (4) ◽  
pp. 7-14
Author(s):  
Valentino Parisi
Keyword(s):  
Fixed Effects ◽  
Jel Classification ◽  
Interesting Case ◽  
Panel Regression ◽  
Tax Rates ◽  
Corporate Tax ◽  
Tax Rate ◽  
Independent Variables ◽  
Corporate Tax Rates ◽  
The Impact

This paper examines the determinants of the effective corporate tax rates in Italy in the years 1998-2006. While from its inception in the early 1970s, the Italian business income tax regime changed only marginally for over twenty years, in the period between 1998 and 2006, the corporate tax system underwent two major reforms with the declared objective of simplifying the system and reducing the tax burden on firms. Therefore, from a tax policy perspective, the author believes Italy is an interesting case study. The empirical analysis is based on a strongly balanced panel with 5,134 companies that combine company accounts and firm survey data. The author employs a fixed effects panel regression to study the role of size, the debt ratio, the rate of profitability, labor productivity, the assets composition, and internationalization in explaining heterogeneity among firms and, therefore, their effective corporate tax rate. Furthermore, the author employs a quantile regression to analyze the impact of the variation in the effect of independent variables on the effective corporate tax rate at different quantiles of the distribution, thus, providing information on the degree of heterogeneity in firm behavior with the final aim of capturing non-linear effects of the independent variables on the tax rate. Keywords: effective corporate tax rates, tax heterogeneity, panel regression, Italy. JEL Classification: H25, H32

scholarly journals An Empirical Analysis Of The Impact Of Tax Rates On Subchapter S Elections

2011 ◽  
Vol 11 (2) ◽  
pp. 84
Author(s):  
Linda Burilovich
Keyword(s):  
Small Businesses ◽  
Tax Rates ◽  
Corporate Tax ◽  
Double Taxation ◽  
Trade Off ◽  
Taxable Income ◽  
Corporate Form ◽  
Empirical Tests ◽  
The Impact ◽  
Loss Firms

Selecting the appropriate form of organization may be a difficult choice for a small business firm. The corporate form offers legal liability but imposes double taxation. The choice often becomes a trade-off between the nontax benefits of incorporating and the costs of double taxation. Certain small businesses qualify to make an election under Subchapter S of the tax code which allows them to operate as a corporation, but avoid the corporate tax by passing through taxable income or loss to shareholders. These firms are known as S corporations. This article examines the impact of personal and corporate tax rates on the propensity for small businesses to elect to operate as S corporations. The behavior of gain and loss firms is analyzed separately. Empirical tests suggest that tax rates do have a significant and sometimes surprising impact on this choice. These findings have significance for policymakers in attempting to reduce the costs of taxes to new firms which may be inhibited from entering the market due to the impact of double taxation.

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