Corporate Tax Incidence and Inefficiency When Corporate and Noncorporate Goods Are Close Substitutes

Jane Gravelle and Laurence Kotlikoff

Economic Inquiry, 1993, vol. 31, issue 4, 501-16

Abstract: An important deficiency in Harberger's (1962) model of corporate income taxation is its inability to consider both corporate and noncorporate production of the same good. Within-industry substitution has potentially major implications for both the excess burden and incidence of the corporate tax. The authors analyze this within-industry substitution using a model in which each industry/sector contains corporate and noncorporate firms (with identical production functions) that produce goods that are close substitutes. The scope for considerable within-industry substitution of noncorporate for corporate capital leads to a very much larger excess burden than that in the Harberger model. Copyright 1993 by Oxford University Press.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (19)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:oup:ecinqu:v:31:y:1993:i:4:p:501-16

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Economic Inquiry is currently edited by Preston McAfee

More articles in Economic Inquiry from Western Economic Association International Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().