Modelling Responses to Profit Taxation over the Economic Cycle: The Case of the UK Corporation Tax
This paper considers behavioural responses of companies´ declared profits to changes in profit tax rates. Using microsimulation modelling based on the UK corporate tax system, it argues that the cyclical volatility of firms´ gross profits and off-setting deductions are potentially important but distinct determinants of the size of these behavioural responses. This arises both because deductions claimed are typically a relatively large fraction of declared gross profits and because of the endogenous relationships between various deductions and those profits. The endogeneity arises mainly from asymmetries in the tax treatment of losses, which generates an asymmetric cycle in the claiming of losses and capital allowances as profit off-sets. Microsimulation modelling shows that these aspects can be sizeable compared with recent estimates of firms´ profit-shifting responses found in the empirical literature.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 66 (2010)
Issue (Month): 3 (September)
|Contact details of provider:|| Web page: https://www.mohr.de/fa|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:sici:0015-2218(201009)66:3_207:mrtpto_2.0.tx_2-4. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.