Using Tax Return Data to Simulate Corporate Marginal Tax Rates

Simulating Corporate Marginal Income Tax Rates and Implications for Corporate Debt Policy

We study several important tax-related issues related to the measurement and use of corporate marginal tax rates. First, we develop an AR(1) method to simulate corporate marginal income tax rates and demonstrate that the AR(1) model improves upon the extant random walk and bin approaches. The new AR(1) approach captures firm-specific features, including mean-reversion in taxable income. Second,...

Optimal Marginal Tax Rates for Low Incomes:

Previous studies have shown that the optimal marginal tax rate at the bottom of the income distribution may be positive, negative, or even zero. This paper reexamines this problem in a unified framework and tries to evaluate the arguments. It turns out that the case for positive marginal tax rates is quite strong, whereas negative marginal tax rates seem to be based on a misconception.

Effective profit taxation and the elasticity of the corporate income tax base : evidence from German corporate tax return data

We estimate the elasticity of corporate taxable income with respect to the effective corporate tax rate on the basis of a pseudo-panel constructed from corporate tax return micro data for the period 1998-2001, a period which saw the introduction of a major corporate tax reform in Germany. Endogeneity of the effective tax rate is controlled for by an instrumental variable approach. Our instrumen...

Are Corporate Tax Rates , or Countries , Converging ?

Corporate effective tax rates in Asian countries

This paper aims to (a) calculate Devereux and Griffith’s (2003) forward-looking effective tax rates for 12 Asian countries over a span of 30 years, (b) show the impact of tax holidays on the effective tax rate in Asian countries, and (c) empirically explore the possibility of tax competition among Asian countries. Through relevant analyses, I arrive at three key conclusions. First, while small ...