Conflicting Theories of Corporate Income Taxation

Corporate Income Taxation

We have stressed that tax incidence must be traced to people, since corporations cannot bear the burden of a tax. Why then tax corporations at all? There are several possible justi…cations. First, there are valuable bene…ts, such as limited liability, to incorporation. The corporate tax could be seen as simply a tax on that value. However, the current corporate tax system does not re‡ect a sens...

Corporate Income Taxation and U.s. Economic Growth

In June 2001 President George W. Bush signed the Economic Growth and Tax Relief and Reconciliation Act into law, initiating a ten-year program of tax reductions in personal taxes. In January 2003 the President authorized the Jobs and Growth Tax Relief Reconciliation Act of 2003, substantially reducing taxes on business income. The tax legislation of 2001 and 2003 led to major reductions in fede...

Corporate Income Taxation of Multinationals in a General Equilibrium Model

Using a general multi-country equilibrium model with a multinational enterprise, this paper investigates the efficiency properties of separate accounting and formula apportionment. If governments are large, i.e. take into account the effect of their statutory tax rate on the interest rate, and maximize tax revenues, tax rates under separate accounting may be inefficiently high while tax rates u...

The Rationale for Exempting Nonprofit Organizations from Corporate Income Taxation*

Dual Income Taxation as a Stepping Stone Towards a European Corporate Income Tax

Although globalization in trade and in particular in financial markets forced national governments to adjust their capital income tax regimes to capital mobility and to strategic tax competition since the mid 1980s, there is evidence that national governments facing this increased pressure have an interest in taxing corporate income at the national level. This interest is also true for EU membe...