Capital Taxation, Development, and Globalization: Evidence from a Macro-Historical Database

Pierre Bachas, Matthew H. Fisher-Post, Anders Jensen and Gabriel Zucman

No 29819, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper builds and analyzes a new global macro-historical database of effective tax rates on capital and labor in 154 countries. We establish a new stylized fact: while effective capital tax rates fell in developed countries between 1965 and 2018, they rose in developing countries since 1990. Multiple research designs at the country, sector and firm-level suggest that trade openness contributed to this rise, by increasing the share of output produced in corporations and larger firms, where effective capital taxation is higher. In contrast to a common view, globalization appears in many countries to have supported governments’ ability to tax capital.

JEL-codes: F14 F62 H20 O24 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-int, nep-pbe and nep-pub
Note: DEV ITI PE
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