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The Elasticity of Corporate Income: Panel Data Evidence from Switzerland

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  • David Staubli

Abstract

I estimate the tax elasticity of corporate income. The analysis is based on panel variation o ered by decentralized corporate taxation in Switzerland. According to the baseline estimate, an increase in a municipality's corporate tax rate by 1% results in a decrease of aggregate corporate income (defined as the sum of corporate taxable incomes in that municipality) by about 0.43%. The elasticity is fairly stable across municipality types regarding population size, centrality of location, and average income. Furthermore, I find evidence that a significant part of the aggregate-level elasticity is attributable to firm mobility across jurisdictions.

Suggested Citation

  • David Staubli, 2018. "The Elasticity of Corporate Income: Panel Data Evidence from Switzerland," Cahiers de Recherches Economiques du Département d'économie 18.01, Université de Lausanne, Faculté des HEC, Département d’économie.
    • Handle: RePEc:lau:crdeep:18.01
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    Cited by:

    1. Matthias Krapf & David Staubli, 2020. "The Corporate Elasticity of Taxable Income: Event Study Evidence from Switzerland," CESifo Working Paper Series 8715, CESifo.

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    More about this item

    Keywords

    Corporate Income Tax; Tax Elasticity; Fiscal Federalism;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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