Profit Shifting and Equilibrium Principles of International Taxation

Do Corporate Tax Cuts Reduce International Profit Shifting ?

This paper analyzes whether a corporate tax cut reduces profit shifting to low-tax countries. I use firm-level data of 2,812 German corporations around the Business Tax Reform in 2008. Applying a difference-in-differences framework with a one-onone matching strategy, which compares earnings of multinational and domestic corporations, I do not find empirical evidence that even a 10 percentage po...

International Taxation

The integration of world capital markets carries important implications for the design and impact of tax policies. This paper evaluates research findings on international taxation, drawing attention to connections and inconsistencies between theoretical and empirical observations. Diamond and Mirrlees (1971) note that small open economies incur very high costs in attempting to tax the returns t...

Principles for Cigarette Taxation

Cigarette taxes are often the highest excise taxes in terms of their percentage share of the product price. The extent of the excess burden imposed by the tax will increase with the elasticity of demand, which is usually estimated to be between –0.4 and –1.0. Potential rationales for raising the cigarette tax other than as a revenue device include compensation for financial externalities to soc...

The Corporate Governance of Profit Shifting

Corporate Taxation and International Competition

Countries around the world continue to tax corporate income at significant rates despite downward pressures from international competition. Average statutory corporate income tax rates fell from 46% in 1982 to 33% in 1999, though tax bases simultaneously broadened, as a result of which average corporate tax collections actually rose from 2.1% of GDP in 1982 to 2.4% of GDP in 1999. Two pieces of...