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Does capital mobility reduce the corporate-labor tax ratio?

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  • Peter Schwarz

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Abstract

Previous empirical studies have shown that there is only a small negative (if any) effect of capital mobility on the corporate tax burden. Using data for up to 20 OECD countries in the period 1979–2000 this paper tries to investigate a less rigid hypothesis: Although capital taxes have not substantially declined in the last twenty years the relative burden of corporate to labor taxes may have fallen due to capital mobility. The results suggest that capital mobility has a weak negative impact on the corporate-labor tax ratio. Other factors however, i.e. the size of the country or the share of investment expenditures are more important in explaining the relative tax burden than capital mobility. Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • Peter Schwarz, 2007. "Does capital mobility reduce the corporate-labor tax ratio?," Public Choice, Springer, vol. 130(3), pages 363-380, March.
  • Handle: RePEc:kap:pubcho:v:130:y:2007:i:3:p:363-380
    DOI: 10.1007/s11127-006-9092-2
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    References listed on IDEAS

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    Cited by:

    1. Michaël Zemmour, 2012. "Tax competition and the move from insurance to assistance," Documents de travail du Centre d'Economie de la Sorbonne 12090r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Mar 2013.
    2. Ãzlem Onaran & Valerie Boesch, 2014. "The effect of globalization on the distribution of taxes and social expenditures in Europe: do welfare state regimes matter?," Environment and Planning A, Pion Ltd, London, vol. 46(2), pages 373-397, February.
    3. König, Tobias & Wagener, Andreas, 2008. "(Post-)Materialist Attitudes and the Mix of Capital and Labour Taxation," Hannover Economic Papers (HEP) dp-404, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. Michael P. Devereux & Simon Loretz, 2013. "What Do We Know About Corporate Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(3), pages 745-774, September.
    5. Mohammad Amin & Jamal Haidar, 2014. "Trade facilitation and country size," Empirical Economics, Springer, vol. 47(4), pages 1441-1466, December.
    6. Konstantinos J. Liapis & Christos L. Galanos & Evangelos D. Politis & Dimitrios D. Kantianis, 2014. "A Quantitative Approach to Measure Tax Competitiveness Between EU Countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 7(3), pages 7-23, December.
    7. Hansson, Åsa & Porter, Susan & Perry Williams, Susan, 2012. "The Effect of Political and Economic Factors on Corporate Tax Rates," Working Paper Series 942, Research Institute of Industrial Economics.
    8. Dennis P. Quinn & Hans-Joachim Voth, 2008. "A Century of Global Equity Market Correlations," American Economic Review, American Economic Association, vol. 98(2), pages 535-540, May.
    9. Mike P. Hanias & Lykourgos Magafas, 2013. "Predicting the Production of Total Industry in Greece with Chaos Theory and Neural Networks," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 59-67.
    10. Thushyanthan Baskaran & Zohal Hessami, 2012. "Public education spending in a globalized world:," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(5), pages 677-707, October.
    11. Baskaran, Thushyanthan & Hessami, Zohal, 2010. "Globalization and the Composition of Public Education Expenditures: A Dynamic Panel Analysis," MPRA Paper 25750, University Library of Munich, Germany.
    12. Osterloh, Steffen & Debus, Marc, 2009. "Partisan politics in corporate tax competition," ZEW Discussion Papers 09-078, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. Michael Overesch & Johannes Rincke, 2011. "What Drives Corporate Tax Rates Down? A Reassessment of Globalization, Tax Competition, and Dynamic Adjustment to Shocks," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 579-602, September.
    14. Konstantinos Liapis & Antonis Rovolis & Christos Galanos, 2012. "Toward a Common Tax Regime for the European Union Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 89-108.
    15. Konstantinos Liapis & Antonios Rovolis & Christos Galanos, 2013. "Toward a Common Tax Regime for the European Union Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 93-116.
    16. Michael Overesch & Johannes Rincke, 2009. "Competition from Low-wage Countries and the Decline of Corporate Tax Rates: Evidence from European Integration," The World Economy, Wiley Blackwell, vol. 32(9), pages 1348-1364, September.
    17. Andreas Haufler & Alexander Klemm & Guttorm Schjelderup, 2009. "Economic integration and the relationship between profit and wage taxes," Public Choice, Springer, vol. 138(3), pages 423-446, March.
    18. Thushyanthan Baskaran & Zohal Hessami, 2011. "Public Education Spending in a Globalized World: Is there a Shift in Priorities Across Educational Stages?," Working Paper Series of the Department of Economics, University of Konstanz 2011-42, Department of Economics, University of Konstanz.
    19. Quinn, Dennis & Voth, Hans-Joachim, 2008. "Free Flows, Limited Diversification: Explaining the Fall and Rise of Stock Market Correlations, 1890-2001," CEPR Discussion Papers 7013, C.E.P.R. Discussion Papers.
    20. Friedrich Heinemann & Michael Overesch & Johannes Rincke, 2010. "Rate-Cutting Tax Reforms And Corporate Tax Competition In Europe," Economics and Politics, Wiley Blackwell, vol. 22(3), pages 498-518, November.
    21. Dennis Quinn & Hans-Joachim Voth, 2010. "Free Flows, Limited Diversification: Openness and the Fall and Rise of Stock Market Correlations, 1890-2001," NBER Chapters,in: NBER International Seminar on Macroeconomics 2009, pages 7-39 National Bureau of Economic Research, Inc.
    22. Osterloh, Steffen & Debus, Marc, 2012. "Partisan politics in corporate taxation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 192-207.
    23. Åsa Hansson & Susan Porter & Susan Williams, 2015. "The importance of the political process on corporate tax policy," Constitutional Political Economy, Springer, vol. 26(3), pages 281-306, September.
    24. Nelly Exbrayat, 2008. "The Impact of Trade Integration and Agglomeration Economies on Tax Interactions : Evidence from OECD Countries," Post-Print hal-00270067, HAL.

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