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Corporate Income Tax and Economic Distortions

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  • Gaëtan Nicodème

Abstract

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: https://dipot.ulb.ac.be/dspace/bitstream/2013/53961/1/RePEc_sol_wpaper_08-033.pdf
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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 08-033.RS.

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Length: 20 p.
Date of creation: 2008
Date of revision:
Publication status: Published by:
Handle: RePEc:sol:wpaper:08-033
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Keywords: Corporate taxation; distortions; tax efficiency.;

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Find related papers by JEL classification:
  • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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Cited by:

  1. European Commission, 2011. "Tax Reforms in EU Member States 2011: tax policy challenges for economic growth and fiscal sustainability," Taxation Papers 28, Directorate General Taxation and Customs Union, European Commission.
  2. Doris Prammer, 2011. "Quality of taxation and the crisis: Tax shifts from a growth perspective," Taxation Papers 29, Directorate General Taxation and Customs Union, European Commission.
  3. Zodrow, George R. & Diamond, John W., 2013. "Dynamic Overlapping Generations Computable General Equilibrium Models and the Analysis of Tax Policy: The Diamond–Zodrow Model," Handbook of Computable General Equilibrium Modeling, Elsevier.

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