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Firm-specific forward-looking effective tax rates

  • Peter Egger

    ()

  • Simon Loretz

    ()

  • Michael Pfaffermayr

    ()

  • Hannes Winner

    ()

This paper computes (marginal and average) forward-looking effective tax rates for a sample of more than 550,000 firms in and outside of Europe using Bureau van Dijk's ORBIS data-base. Comparing the firm-level effective tax rates with their country-level counterparts we arrive at two important findings for empirical research on the behavioral response to taxation. First, the firm-level component of the effective tax burden is generally much more important than the one at the country level. Second, tentative empirical results on the nexus between firm sales and corporate taxation illustrate that the conclusions obtained with forward looking firm- level effective tax rates differ starkly from those based on country-level forward-looking rates or backward-looking effective tax rates at the firm level.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10797-009-9124-1
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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 16 (2009)
Issue (Month): 6 (December)
Pages: 850-870

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Handle: RePEc:kap:itaxpf:v:16:y:2009:i:6:p:850-870
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102915

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  1. Hines, James R. Jr., 1999. "Lessons from Behavioral Responses to International Taxation," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 305-22, June.
  2. Michael P Devereux, 2007. "The Impact of Taxation on the Location of Capital, Firms and Profit: a Survey of Empirical Evidence," Working Papers 0702, Oxford University Centre for Business Taxation.
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  8. Alan J. Auerbach, 1980. "Wealth Maximization and the Cost of Capital," NBER Working Papers 0254, National Bureau of Economic Research, Inc.
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  11. P. Hart, 2000. "Theories of Firms' Growth and the Generation of Jobs," Review of Industrial Organization, Springer, vol. 17(3), pages 229-248, November.
  12. Devereux, Michael P & Griffith, Rachel, 2003. "Evaluating Tax Policy for Location Decisions," International Tax and Public Finance, Springer, vol. 10(2), pages 107-26, March.
  13. Simon Loretz, 2008. "Corporate taxation in the OECD in a wider context," Working Papers 0821, Oxford University Centre for Business Taxation.
  14. Hassett, Kevin A. & Hubbard, R. Glenn, 2002. "Tax policy and business investment," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 20, pages 1293-1343 Elsevier.
  15. Mutti, John & Grubert, Harry, 2004. "Empirical asymmetries in foreign direct investment and taxation," Journal of International Economics, Elsevier, vol. 62(2), pages 337-358, March.
  16. Michael P. Devereux & Rachel Griffith, 1998. "The Taxation of Discrete Investment Choices," Keele Department of Economics Discussion Papers (1995-2001) 98/08, Department of Economics, Keele University.
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