Corporate tax cuts and firm employment: A match made in haven?

Baptiste Souillard

Economics Letters, 2022, vol. 219, issue C

Abstract: Evidence on employment responses to corporate income taxes is mixed. This paper revisits the issue in the context of corporate tax avoidance. It is now well known that multinational companies artificially register some of their profits in tax havens to reduce their tax liability. The study reveals that all other things being equal, the establishment of tax haven subsidiaries is followed by a 4 percent rise in firm employment in the subsequent years. This finding offers greater insight into how corporate income taxes affect employment levels. It also has particular resonance at a time when international tax regulation is tightening to limit the aggressive tax planning activities of large multinational companies.

Keywords: Multinational enterprises; Tax avoidance; Profit shifting; Employment; Tax havens (search for similar items in EconPapers)
JEL-codes: F16 F23 H26 J21 M51 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:219:y:2022:i:c:s0165176522003135

DOI: 10.1016/j.econlet.2022.110835

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