Optimal corporation tax: an I.O. approach

Luca Colombo, Paola Labrecciosa and Patrick Walsh ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Theory predicts that optimal effective corporation tax rates will be negatively related to industry specific sunk costs, and hence industry concentration. Governments should tax industries with monopolistic power softly. Evidence suggests that this Schumpeterian (1942) principle of corporate taxation was used widely across industries in France, Italy and the UK 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)
Pages: 20 pages
Date: 2006-02
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http://eprints.lse.ac.uk/6719/ Open access version. (application/pdf)

Related works:
Working Paper: Optimal Corporation Tax: An I.O. Approach (2006)
Working Paper: Optimal Corporation Tax: An I.O. Approach (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:6719

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