Arulampalam, Wiji, Devereux, Michael and Maffini, Giorgia (2007) The direct incidence of corporate income tax on wages. Centre for Business Taxation WP 07/07.
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We examine how far taxes on corporate income are directly shifted onto the workforce. We use data on 55,082 companies located in nine European countries over the period 1996-2003. We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model. We find only weak evidence of a difference in the effective incidence of taxes paid by multinational companies.
|Item Type:||Other Working Paper|
|Centre:||Oxford University Centre for Business Taxation > CBT Working Papers|
|Date Deposited:||12 Dec 2012 14:11|
|Last Modified:||15 Oct 2015 02:18|
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