Measuring the burden of the corporate income tax under imperfect competition

Li Liu and Rosanne Altshuler ()

No 1105, Working Papers from Oxford University Centre for Business Taxation

Abstract: We model and estimate the incidence of the corporate income tax under imperfect competition. Identification comes from variation in effective marginal tax rates in the United States across industries and time. Our empirical results suggest that labor bears a significant portion of the burden of the corporate income tax. In addition, we find that the elasticity of wages with respect to the corporate marginal effective tax rate increases with industry concentration. Over all industries, our estimates suggest that a one dollar increase in corporate tax revenue decreases wages by around 60 cents.

Keywords: Tax incidence; Wage determination; Corporate income tax; Market structure (search for similar items in EconPapers)
JEL-codes: H22 H25 H31 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Citations: View citations in EconPapers (7)

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Journal Article: Measuring the Burden of the Corporate Income Tax Under Imperfect Competition (2013)
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