The direct incidence of corporate income tax on wages.
A stylised model is provided to show how the direct effect of corporate income tax on wages can be identified in a bargaining framework using cross-company variation in tax liabilities, conditional on value added per employee. Using data on 55,082 companies located in nine European countries over th...
| Huvudupphovsmän: | , , |
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| Materialtyp: | Journal article |
| Språk: | English |
| Publicerad: |
Elsevier
2012
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| Sammanfattning: | A stylised model is provided to show how the direct effect of corporate income tax on wages can be identified in a bargaining framework using cross-company variation in tax liabilities, conditional on value added per employee. Using data on 55,082 companies located in nine European countries over the period 1996-2003, we estimate the long run elasticity of the wage bill with respect to taxation to be -0.093. Evaluated at the mean, this implies that an exogenous rise of $1 in tax would reduce the wage bill by 49 cents. Only a weak evidence of a difference for multinational companies is found. |
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