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Optimal Corporation Tax: An I.O. Approach

Luca Colombo, Paola Labrecciosa and Patrick Walsh ()

STICERD - Economics of Industry Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: Theory predicts that optimal effective corporation tax rates will benegatively related to industry specific sunk costs, and hence industryconcentration. Governments should tax industries with monopolistic powersoftly. Evidence suggests that this Schumpeterian (1942) principle ofcorporate taxation was used widely across industries in France, Italy and theUK in the 1990s.

Keywords: Effective Corporation Tax Rate; Industry Sunk Costs; Industry Concentration. (search for similar items in EconPapers)
JEL-codes: H25 L52 (search for similar items in EconPapers)
Date: 2006-02
New Economics Papers: this item is included in nep-bec, nep-pbe and nep-pub
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https://sticerd.lse.ac.uk/dps/ei/EI42.pdf (application/pdf)

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Working Paper: Optimal corporation tax: an I.O. approach (2006) Downloads
Working Paper: Optimal Corporation Tax: An I.O. Approach (2005) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cep:stieip:42

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