Habit Persistence in Effective Tax Rates: Evidence Using Australian Tax Entities
AbstractThis paper uses administrative data from the Australian Tax Office, to model the effective tax rates (ETRs) of large Australian corporates. The extent to which there is any habit persistence in ETRs is also examined. The results suggest that unobserved entity heterogeneity is important in explaining ETRs. In terms of observed heterogeneity, entity size, level of leverage, capital intensity, foreign income and R&D, are all important explanators of ETRs. There is also evidence of a significant amount of habit persistence, implying that ETRs converge monotonically towards the statutory rate of corporation tax.
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Bibliographic InfoPaper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2000n13.
Length: 23 pages
Date of creation: Sep 2000
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Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F18 - International Economics - - Trade - - - Trade and Environment
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-02-10 (All new papers)
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