International effects of corporate tax cuts on income distribution

Siraj Bawa () and Nam Vu

Review of International Economics, 2020, vol. 28, issue 5, 1164-1190

Abstract: This paper evaluates the domestic and cross‐country effects of corporate income tax (CIT) cuts on income inequality using a tractable multi‐country DSGE model calibrated to U.S. and Canadian data. We illustrate that the cross‐border propagation of differentiated equity holdings can help explain the increase in income inequality, both within‐ and cross‐country, in response to a CIT cut. A lower barrier to capital mobility alleviates this divergence in income, while lower trade costs exert little effects on income distribution. The model is also consistent with recent evidence that middle‐income workers experience lower income growth than their counterparts in either extreme of the skill spectrum.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/roie.12485

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:bla:reviec:v:28:y:2020:i:5:p:1164-1190

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().