Abstract
To what extent do reductions in corporate income tax (CIT) rates attract foreign tax bases? What are the revenue implications of a unilateral tax reduction when tax bases are internationally mobile? These questions are explored using annual data from 17 OECD countries spanning the period 1982 to 2005. Controlling for fixed country effects, year effects, country time trends, and subjecting our results to an extensive robustness analysis, we find that (i) a country's aggregate reported corporate profits are negatively and significantly affected by CIT rate reductions in neighboring countries, (ii) a unilateral reduction in the domestic CIT rate results in lower domestic CIT revenues.
Originalsprache | Englisch |
---|---|
Fachzeitschrift | Canadian Journal of Economics |
Publikationsstatus | Veröffentlicht - 1 Sept. 2012 |