Corporate Taxes, Productivity, and Business Dynamism

Changing Business Dynamism and Productivity: Shocks vs. Responsiveness

The pace of business dynamism as measured by indicators such as job reallocation has declined in recent decades in the U.S., and theory suggests that this may have implications for productivity. The declining dynamism in sectors like Retail Trade disproportionately accounted for these trends in the 1980s and 1990s, and was productivity enhancing. In contrast, the pace of reallocation in High-Te...

Corporate Taxes and Defined Benefit

The Tepper-Black arguments for tax-arbitrage opportunities from overfunding pension plans are critically examined and modifications proposed. Tax status, a function of current marginal tax rates and expected future taxable income, is predicted to determine funding policy. Tests of this modified tax benefits view suggest that 1) tax status declines are associated with pension contribution reduct...

Corporate taxes in Europe

Corporate Taxes, Growth and Welfare in a Schumpeterian Economy (Running Title: Corporate Taxes and Welfare)

I take a new look at the long-run implications of taxation through the lens of modern Schumpeterian growth theory. I focus on the latest vintage of models that sterilize the scale effect through a process of product proliferation that fragments the aggregate market into submarkets whose size does not increase with the size of the workforce. I show that the following interventions raise welfare:...

Corporate Income Taxes , Financial Constraints and Innovation ∗

We examine exogenous changes in state corporate income taxes over the 1988-2006 period and find that tax decreases significantly boost both the quantity, measured by the number of patents, and the quality, measured by citations per patent, of innovative output, while tax increases have little impact on innovation. Most of the impact of tax changes on innovation occurs two or more years after th...