The Impact and Inefficiency of the Corporate Income Tax: Evidence from State Organizational Form Data / Austan Goolsbee.

Format:

Book

Author/Creator:

Goolsbee, Austan.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w9141.

NBER working paper series no. w9141

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Impact and Inefficiency of the Corporate Income Tax

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

By double taxing the income of corporate firms but not unincorporated firms, taxes can play an important role in a firm's choice of organizational form. The sensitivity of the organizational form decision to tax rates can also be used to approximate the efficiency cost of the corporate income tax. This paper uses new cross-sectional data on organizational form across states compiled in the Census of Retail Trade to estimate this sensitivity. The results document a significant impact of the relative taxation of corporate to personal income on the share of economic activity that is done by corporations including sales, employment, and the number of firms. The impacts are substantially larger than those found in the previous empirical literature based on time-series data.

Notes:

Print version record

September 2002.