Corporate income taxes around the world: a survey on forward-looking tax measures and two applications

Abstract

This study provides a survey on corporate taxes around the world. Our analysis has three main objectives. First, we collect tax data and calculate (forward-looking) effective tax measures for a large sample of countries and recent years. We particularly describe how these measures vary over time and across countries. Second, we augment the country-level information with firmand industry-level data (providing weights for financial structure and asset composition) to contrast statutory measures at the level of countries with measures accounting for firm-and industry-specific weights. Third, we utilize our new data to (i) estimate Laffer-Curves, i.e., the relationship between statutory tax rate and tax revenue, based on non-parametric as well as parametric specifications; (ii) examine how taxes affect investment in fixed assets at the level of firms. As for the latter, our preferred specification, in which we use a firm-specific effective marginal tax rate to capture tax incentives, suggests an elasticity of-0.33.

An Economic Assessment of the Evolution of the Corporate Tax System in Italy

“…The empirical literature supports the possible role of corporate taxation in shaping firms' choices over the recent period. Indeed, cross-country evidence confirms the relevance of corporate taxes for investment (Bond and Xing, 2015;Steinmüller et al 2019) and financial structures (de Mooij, 2011;De Socio and Nigro, 2012) 4 . Specific evidence is also * The views expressed in this paper are those of the author and shall not be attributed to the Banca d'Italia.…”

“…Federici and Parisi (2015) rely on this set-up to estimate the effects of the Italian corporate tax on investment. See Steinmüller et al (2019) for a more recent empirical application that exploits both firm-and industryspecific data in a panel of countries. 13 See ZEW-PWC (2020) and Hannapi (2018).…”

Taxes and the Location of U.S. Business Activity Abroad

“…Because R&D requires a competent pool of technically trained workers, physical infrastructure, and a supportive legal system, the viability of major research effort is limited in many low tax locations. Also, manufacturing affiliates account for over 70 percent of all affiliate R&D; therefore, a tax measure specifically focused on manufacturing likely would be more appropriate than the overall rate calculated here.11 When we instrument for tax rates, our investment tax elasticity is somewhat larger than the -1.6 to -1.4 semi-elasticity range with respect to EATRs presented inSteinmüller, Thunecke, and Wamser (2018), which is based on firm-specific data for affiliates of MNEs worldwide. 12 SOI tax rate data are not available in every year.…”

“…Several analyses have noted that the existence of a tax haven affiliate may promote the activity of a parent firm's affiliates in high-tax locations(Desai, Foley, and Hines, 2006;Overesch, 2009;Gumpert, Hines, and Schnitzer, 2016;Suárez Serrato, 2018). Due to the lack of information on control variables for Bermuda and the Cayman Islands, they are not part of this study.4 AlthoughDevereux, Griffith, and Klemm (2002) noted the stability of the EMTR in the 1980s and 1990s and the importance of the declining EATR in discrete location choices,Steinmüller, Thunecke, and Wamser (2018) cite a substantial decline of the EMTR over the 2004-2011 period. The latter authors report greater sensitivity of fixed capital investment to the EMTR than to the EATR.…”

Corporate Taxes and Multi-Product Exporters: Theory and Evidence From Trade Dynamics

“…Over the last decades many countries have conducted substantial reforms of corporate taxation. For a large sample of 178 countries, the average statutory tax rate on corporate income has fallen from 31% in 1996 to 22% in 2016 (Steinmüller et al, 2019). 1 The question how changes in corporate tax policy affect the competitiveness of firms is a central issue in recent policy debates.…”