Does capital mobility reduce the corporate-labor tax ratio?

Peter Schwarz

Public Choice, 2007, vol. 130, issue 3, 363-380

Abstract: Previous empirical studies have shown that there is only a small negative (if any) effect of capital mobility on the corporate tax burden. Using data for up to 20 OECD countries in the period 1979–2000 this paper tries to investigate a less rigid hypothesis: Although capital taxes have not substantially declined in the last twenty years the relative burden of corporate to labor taxes may have fallen due to capital mobility. The results suggest that capital mobility has a weak negative impact on the corporate-labor tax ratio. Other factors however, i.e. the size of the country or the share of investment expenditures are more important in explaining the relative tax burden than capital mobility. Copyright Springer Science+Business Media, LLC 2007

Keywords: Capital mobility; Corporate taxation; Relative tax burden (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (28)

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DOI: 10.1007/s11127-006-9092-2

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