Sharing the Burden? Empirical Evidence on Corporate Tax Incidence

Nadja Dwenger, Steiner Viktor and Rattenhuber Pia
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Steiner Viktor: Freie Universität Berlin,Berlin, Germany
Rattenhuber Pia: Organisation for Economic Co-operation and Development (OECD),Paris, France

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.

Keywords: Tax incidence; wage determination; corporate income taxation; tax return data (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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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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DOI: 10.1111/geer.12157

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