Sharing the Burden? Empirical Evidence on Corporate Tax Incidence

Nadja Dwenger, Pia Rattenhuber and Viktor Steiner

German Economic Review, 2019, vol. 20, issue 4, e107-e140

Abstract: This study investigates the direct incidence of the corporate income tax (CIT) through wage bargaining, using an industry‐region level panel dataset on all corporations in Germany over the period 1998–2006. For the first time we account for employment effects which result from tax‐induced wage changes. Workers share in reductions of the CIT burden; yet, the net effect of wage bargaining on the corporate wage bill, after an exogenous €1 decrease in the CIT burden, is as little as 19–28 cents. This is about half of the effect obtained in prior literature focussing on wages alone.

Date: 2019
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https://doi.org/10.1111/geer.12157

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Journal Article: Sharing the Burden? Empirical Evidence on Corporate Tax Incidence (2019)
Working Paper: Sharing the burden: Empirical evidence on corporate tax incidence (2011)
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