Measuring the Burden of Corporate Income Tax under Imperfect Competition

Liu, Li (2011) Measuring the Burden of Corporate Income Tax under Imperfect Competition. In: National Tax Association 104th Annual Conference on Taxation, 17/11/2011-19/11/2011, New Orleans, USA.

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Abstract

We model and estimate the incidence of the corporate income tax under imperfect competition. Identification comes from variation in effective marginal tax rates in the United States across industries and time. Our empirical results suggest that labor bears a significant portion of the burden of the corporate income tax. In addition, we find that the elasticity of wages with respect to the corporate marginal effective tax rate increases with industry concentration. Over all industries, our estimates suggest that a one dollar increase in corporate tax revenue decreases wages by around 60 cents.

Item Type: Conference or Workshop Item (Paper)
Keywords: Tax incidence, Wage determination, Corporate income tax, Market structure
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation
Date Deposited: 21 Aug 2012 14:06
Last Modified: 23 Oct 2015 14:07
URI: http://eureka.sbs.ox.ac.uk/id/eprint/4094

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