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Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany

Clemens Fuest (), Andreas Peichl () and Sebastian Siegloch ()

American Economic Review, 2018, vol. 108, issue 2, 393-418

Abstract: This paper estimates the incidence of corporate taxes on wages using a 20-year panel of German municipalities exploiting 6,800 tax changes for identification. Using event study designs and difference-in-differences models, we find that workers bear about one-half of the total tax burden. Administrative linked employer-employee data allow us to estimate heterogeneous firm and worker effects. Our findings highlight the importance of labor market institutions and profit-shifting opportunities for the incidence of corporate taxes on wages. Moreover, we show that low-skilled, young, and female employees bear a larger share of the tax burden. This has important distributive implications.

JEL-codes: H25 H31 H71 J16 J24 J31 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/aer.20130570
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Related works:
Working Paper: Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany (2017) Downloads
Working Paper: Do higher corporate taxes reduce wages? Micro evidence from Germany (2016) Downloads
Working Paper: Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany (2013) Downloads
Working Paper: Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany (2013) Downloads
Working Paper: Do higher corporate taxes reduce wages? Micro evidence from Germany (2013) Downloads
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