Corporate Taxes and Entrepreneurs’ Income: A Credit Channel

Manthos D. Delis, Emilios C. Galariotis, Maria Iosifidi and Steven Ongena
Additional contact information
Manthos D. Delis: Audencia Business School
Emilios C. Galariotis: School of Production Engineering and Management
Maria Iosifidi: Montpellier Business School

No 24-81, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Corporate taxation can have redistributive effects on income and wealth. We hypothesize and empirically establish such an effect working via bank credit. We use a unique sample of small majority- owned firms that apply for credit, where only some firms (treated) experience a corporate tax cut. We show that after the decrease in corporate tax rates, the treated poorer business owners get easier access to credit. However, this policy also considerably increases loan amounts and decreases loan spreads for the treated richer. Ultimately, reducing the corporate tax rate predominantly increases the future income and wealth of richer business owners.

Keywords: Corporate taxes; Economic inequality; Bank credit; Credit score (search for similar items in EconPapers)
JEL-codes: D63 G20 G21 H25 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2024-09
New Economics Papers: this item is included in nep-acc, nep-cfn, nep-fdg, nep-pbe and nep-pub
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4963344 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2481

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().