Simulating the Elimination of the U.S. Corporate Income Tax

Hans Fehr (), Sabine Jokisch, Ashwin Kambhampati and Laurence Kotlikoff

No 19757, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We simulate corporate tax reform in a single good, five-region (U.S., Europe, Japan, China, India) model, featuring skilled and unskilled labor, detailed region-specific demographics and fiscal policies. Eliminating the model's U.S. corporate income tax produces rapid and dramatic increases in the model's level of U.S. investment, output, and real wages, making the tax cut self-financing to a significant extent. Somewhat smaller gains arise from revenue-neutral base broadening, specifically cutting the corporate tax rate to 9 percent and eliminating tax loop-holes.

JEL-codes: F0 F20 H0 H2 H3 J20 (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
Note: CF
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Citations: View citations in EconPapers (11)

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