Simulating the Elimination of the U.S. Corporate Income Tax
AbstractWe simulate corporate tax reform in a single good, five-region (U.S., Europe, Japan, China, India) model, featuring skilled and unskilled labor, detailed region-specific demographics and fiscal policies. Eliminating the model’s U.S. corporate income tax produces rapid and dramatic increases in the model’s level of U.S. investment, output, and real wages, making the tax cut self-financing to a significant extent. Somewhat smaller gains arise from revenue-neutral base broadening, specifically cutting the corporate tax rate to 9 percent and eliminating tax loop-holes.
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Date of creation: Dec 2013
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Find related papers by JEL classification:
- F0 - International Economics - - General
- F20 - International Economics - - International Factor Movements and International Business - - - General
- H0 - Public Economics - - General
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
This paper has been announced in the following NEP Reports:
- NEP-ACC-2013-12-29 (Accounting & Auditing)
- NEP-ALL-2013-12-29 (All new papers)
- NEP-PBE-2013-12-29 (Public Economics)
- NEP-PUB-2013-12-29 (Public Finance)
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