The Corporate Elasticity of Taxable Income: Event Study Evidence from Switzerland
Matthias Krapf () and
No 8715, CESifo Working Paper Series from CESifo
We estimate the corporate elasticity of taxable income. Our analysis draws on panel variation in the decentralized system of corporate taxation in Switzerland. We find that an increase in a jurisdiction's corporate net-of-tax rate by 1% results in an increase in aggregate corporate income by about 3.5% over a time span of 4 years. The elasticity is larger in remote, non-central locations. Firm entry, exit, and mobility only account for a small share of the overall elasticity.
Keywords: corporate income tax; tax elasticity; fiscal federalism (search for similar items in EconPapers)
JEL-codes: H21 H25 H32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-cfn, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8715
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