The Incidence of the Corporation Income Tax under Variable Returns to Scale

Vassillis Rapanos

Working Paper from Economics Department, Queen's University

Abstract: This paper investigates the incidence of the corporate income tax under variable returns to scale. The approach follows Harberger. If the elasticity of substitution between consumption commodities is different from one, the influence of variable returns to scale on tax incidence is important, and Harberger's quantitative results change considerably. Calculations for the U.S. economy show that under increasing returns to scale the tax burden of capital rises relative to the case of constant returns, while under decreasing returns the relative tax burden of capital falls.

Pages: 15
Date: 1981
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:449

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