TitleThe economic effects of corporate income taxation
NameLiu, Li (author), Altshuler, Rosanne (chair), sigman, hilary (co-chair), Klein, Roger (internal member), Soled, Jay (outside member), Rutgers University, Graduate School - New Brunswick,
Taxation--Rates and tables,
DescriptionThis dissertation consists of three essays studying the economic impact of corporate income taxation. Chapter 1 models and estimates the incidence of the corporate income tax under imperfect competition. Identi
fication comes from variation in the effective marginal tax rates across industry and time. The empirical results suggest that labor shares the burden of corporate taxes. A ten percentage increase in the tax rates decreases the average wage rate by 0.45-0.56 percent. Consistent with the theoretical prediction, the elasticity of wage with respect to the tax rates increases with the industry concentration. Labor bears at least 87 percent of the burden of corporate income taxes. The U.S. corporate income tax system provides investment incentives that vary across asset types. In Chapter 2, I study the effect of corporate income taxes on the allocation of new capital investment by constructing an industry-level panel data from 1962 to 1997. My preferred-IV estimates of the asset substitution elasticities suggest a sizable interasset distortion e¤ect of corporate income taxes. Substitutability is the strongest between machinery equipment and computing and electronic equipment. Compared to a revenue-neutral uniform tax scheme, differential corporate income taxes cause under-investment in computing and electronic equipment and over-investment in machinery and transportation equipment. Corporations were taxed at a lower rate than non-corporate fi
rms in the early twentieth century. Chapter 3 examines the effect of relative taxation of corporate to non-corporate income using state-level panel data during 1909-1919. I
find that the tax cost to incorporate had a signifi
cant impact on the corporate share of establishments and related economic activities including employment and production. The regression results suggest a large response of income shifting -- about 1.5 to 2 more times than the largest estimates in studies using more recent data. Income shifting was more responsive to the tax policies during the early days of income taxes. The implicit tax subsidy encourage about 8,300 business to be organized under the corporate form during this period.
NoteIncludes bibliographical references
Noteby Li Liu
CollectionGraduate School - New Brunswick Electronic Theses and Dissertations
Organization NameRutgers, The State University of New Jersey
RightsThe author owns the copyright to this work.