The incidence of company tax in Australia

Xavier Rimmer, Jazmine Smith and Sebastian Wende
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Xavier Rimmer: Treasury, Government of Australia
Jazmine Smith: Treasury, Government of Australia

Economic Roundup, 2014, issue 1, 33-47

Abstract: This paper uses a computable general equilibrium framework to provide estimates of where the costs of company tax are borne and to test the importance of certain assumptions. The welfare benefits of a small fall in the company tax rate are shared between company owners and workers. The paper finds that in the long-run around one-third of the benefit accrues to the owners of capital in the main scenario, with the remaining two-thirds flowing to households, primarily through rises in real wages. Results with alternative assumptions are also presented.

Keywords: CGE; Computable General Equilibrium; company taxation; economic incidence; economic rents; capital mobility (search for similar items in EconPapers)
JEL-codes: C68 H22 H25 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:tsy:journl:journl_tsy_er_2014_1_3

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