The corporate tax, apportionment rules and employment: Evidence using policy discontinuity at U.S. state borders
Eliakim Kakpo
MPRA Paper from University Library of Munich, Germany
Abstract:
A recent set of empirical works highlights a puzzling asymmetric response of labor market outcomes to the corporate tax. This paper explores a potential source of this disparity, using differentials in profit accounting rules across U.S. states. I exploit policy discontinuities at state borders by pairing counties in states featuring a tax change with their contiguous counterparts in control states. I notice that corporate tax cuts do not boost employment while tax hikes reduce job creation. The incidence of tax increases on employment seems limited in states with a single sales factor apportionment formula and pronounced in states that use a triple factor apportionment rule. I present a basic conceptual framework that explains this pattern.
Keywords: Keywords: Tax incidence; Profit-shifting; Corporate tax; Profit apportionment; Employment. (search for similar items in EconPapers)
JEL-codes: H22 H25 H71 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-acc and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/94875/1/MPRA_paper_94875.pdf original version (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:94875
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().