Capitalists, Workers and Landlords: A Comprehensive Analysis of Corporate Tax Incidence

David Gstrein, Florian Neumeier, Andreas Peichl and Pascal Zamorski

No 25143, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: This paper presents novel estimates of the incidence of corporate taxes that, for the first time, account for commercial real estate. We combine unique real estate data with administrative data on wages and profits in Germany. We leverage over 17,000 local business tax changes for our empirical analysis. Our estimates indicate that a one percentage point increase in local business taxes reduces commercial real estate prices by 2%, while residential real estate prices decline by 1%. Wages decline by approximately 1%, and profits decline by about 2%. Using the reduced-form estimates, we update current incidence measures within a spatial-equilibrium framework.

Keywords: Corporate taxation; tax incidence; real estate markets (search for similar items in EconPapers)
JEL-codes: H22 H25 H71 (search for similar items in EconPapers)
Date: 2025-12
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