Corporation Tax Buoyancy and Revenue Elasticity in the UK

John Creedy and Norman Gemmell

No 985, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: Observed changes in corporation tax revenues from year to year, which include the effects of changes in tax rates, deductions and compliance, appear to be highly volatile relative to profits, the tax base. This paper examines whether the ‘built-in’ fiscal drag properties of corporation tax can be expected to display similar properties. Simple, conceptual modelling demonstrates that the corporate tax revenue elasticity does indeed display this property in the presence of regular cyclical fluctuation in profit growth, suggesting that much of the observed volatility is inherent to the corporation tax system.

Pages: 29 pages
Date: 2007
New Economics Papers: this item is included in nep-pbe
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Related works:
Journal Article: Corporation tax buoyancy and revenue elasticity in the UK (2008)
Working Paper: Corporation Tax Buoyancy and Revenue Elasticity in the UK (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:985

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