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Taxing Corporate or Shareholder Income

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  • Kristoffer Berg

Abstract

As corporate income tax rates have fallen across the world, other capital taxes become more important. This paper studies the choice between income taxation at the corporate and shareholder level. I develop a sufficient-statistics framework to determine optimal tax reforms. The main result is that when the incidence of the corporate income tax on workers is higher than that of shareholder income taxes, lowering the former and reducing the latter is typically optimal. In a policy application, I derive optimal reform directions for corporate and shareholder income taxes for a large and a small economy.

Suggested Citation

  • Kristoffer Berg, 2025. "Taxing Corporate or Shareholder Income," CESifo Working Paper Series 12149, CESifo.
    • Handle: RePEc:ces:ceswps:_12149
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence

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