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Corporate tax revenues in OECD countries

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  • Kimberly Clausing

Abstract

This paper studies variation among OECD countries in the size of corporate income tax revenues relative to GDP over the time period 1979–2002. A decomposition explains such variation as a function of the statutory tax rate, the breadth of the tax base, corporate profitability, and the share of the corporate sector in GDP. Empirical results indicate a parabolic relationship between tax rates and revenues, implying a revenue-maximizing corporate income tax rate of 33% for the whole sample. This revenue-maximizing rate is found to decrease as economies are smaller and more integrated with the world economy. Copyright Springer Science + Business Media, LLC 2007

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  • Kimberly Clausing, 2007. "Corporate tax revenues in OECD countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(2), pages 115-133, April.
    • Handle: RePEc:kap:itaxpf:v:14:y:2007:i:2:p:115-133
    DOI: 10.1007/s10797-006-7983-2
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    References listed on IDEAS

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