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Corporate Income Tax and Economic Distortions

  • Gaëtan J.A. Nicodème

As any non-lump-sum tax, corporate income taxation creates distortions in economic choices, reducing its efficiency. This paper reviews some of these domestic and international distortions and their most recent estimates from the economic literature. Distortions originating from income shifting between capital and labour sources, profit shifting across jurisdictions, the effects of taxation on business location and foreign direct investment are the major sources of distortions.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2008/wp-cesifo-2008-11/cesifo1_wp2477.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2477.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2477
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