Measuring the burden of the corporate income tax under imperfect competition

Liu, Li and Altshuler, Rosanne (2011) Measuring the burden of the corporate income tax under imperfect competition. National Tax Journal, 66 (1). pp. 215-238.

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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: Article
Keywords: tax incidence, wage determination, corporate income tax, market structure
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation
Date Deposited: 24 Apr 2013 11:52
Last Modified: 23 Oct 2015 14:08
URI: http://eureka.sbs.ox.ac.uk/id/eprint/4574

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